Shipbuilder Vard posts $4.2m loss for second quarter

Shipbuilder Vard posts $4.2m loss for second quarter

NORWAY - Global shipbuilder Vard Holdings has reported a second-quarter net loss of 20 million Norwegian kroner (NOK) or S$4.2 million.

This reverses a net profit of NOK279 million for the same period ended June 30 last year. Revenue for the quarter fell by 11.7 per cent to NOK2.95 billion.

Last month, Vard issued a profit guidance statement noting that operations in Brazil continue to hurt the firm's performance. Its NiterĂ³i yard suffers from an overload situation as the Brazilian business landscape faces high personnel turnover and pressures in the subcontracting market.

"One of the major drivers of deteriorating performance in the second quarter was Vard's dependency on the outsourcing for the construction of vessel hulls," it stated in a filing with the Singapore Exchange on Thursday.

The firm also announced that its second shipyard in Brazil, Vard Promar, had started operations last month as scheduled. But its pre-operational expenses were higher than expected, which called for revisions to its estimated start-up cost.

Nonetheless, its operations in Norway, Romania and Vietnam were not affected by the challenges in Brazil.

In the three months ending June 30, Vard secured three new vessel contracts which accounted for NOK1.2 billion. Taking into account the eight vessels delivered during the quarter, Vard's order book comprised 41 vessels as of June 30, with a total book value of NOK14 billion.

Despite its disappointing performance in the second quarter, Vard said it is confident about the prospects for new orders for the rest of the year.

This is due to an increasing volume of subsea work, and more exploration and rig activities which will drive new demand for support vessels.

It reported a loss per share of 0.34 cent for the quarter, reversing earnings per share of 5.02 cents a year earlier, and net asset value per share of 62 cents, up from 59 cents as of Dec 31 last year.

Vard's shares closed up 3.5 cents or 4.2 per cent to 86.5 cents on Thursday.

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