Vard slashes Q3 loss to 8m kroner from 80m year ago on higher revenue

NORWEGIAN shipbuilder Vard Holdings on Friday reported a loss of 8 million Norwegian kroner (S$1.34 million) for the third quarter, a big improvement of 90 per cent from a loss of 80 million kroner in the year-ago period.

Revenue for the three months to Sept 30, 2017, rose 33 per cent to 2.01 billion kroner from 1.50 billion in the corresponding period last year from more work at its yards in Romania and Vietnam. This it said was due to rapid progress on the Module Carrier Vessels projects for Topaz Energy and Marine and Kazmortransflot, as well as ongoing construction on all six expedition cruise vessels contracted in 2016.

After factoring in reduced restructuring cost of 11 million kroner and stable depreciation, impairment and amortization costs of 53 million in the quarter, Vard recorded an operating loss of 9 million kroner in the quarter, down from 45 million in the year-ago period.

Vard's bottomline was also helped by a reversal in net financial items, due mainly to foreign exchange gains, which swung to a gain of 16 million kroner in the third quarter from a loss of 29 million in the year ago quarter.

However, Vard's loss from its share of results of associates widened by 78 per cent to 16 million kroner in the quarter from 9 million a year ago, which it blaimed on the present downturn in the offshore market.

For the first nine months of the year, Vard's net loss was down 6 per cent year on year to 102 million kroner from a loss of 96 million kroner.

Revenue for the year to end-September came in 3 per cent higher at 5.91 billion korner.

Operating losses for the nine months was 21 million kroner from 128 million a year ago. These were for termination benefits and statutory payments for temporary redundancies, mainly in Europe and Brazil.

Vard said its order book remained resilient with an intake of 1.01 billion kroner in the third quarter, including one expedition cruise vessel to be built in Vietnam for Coral Expeditions of Australia.

As at Sept 30, 2017, the group had 41 vessels in its order book, of which 34 are Vard designs, with total value of 12.0 billion kroner.

Said Vard CEO Roy Reite: "As our diversification strategies are beginning to bear fruit, Vard continues to strengthen its business operations through the efficient management of workload across the different shipyards, and leverages on its track record in design and innovation.

"Besides looking at new, sustainable opportunities to expand our project portfolio in other vessel segments, we are continuously exploring ways to diversify our service offering and tap on other business leads in the offshore and marine industries such as repair and maintenance."