Vard shares up on news of US$100m order

Singapore

SHARES in Vard Holdings surged as much as 3.4 per cent in Monday trading on news of a more than US$100 million newbuild order. On a day when the broad market beat a retreat, Vard shares rose 1.5 cents to an intra-day high of S$0.455 before closing at S$0.445, up half a cent or 1.14 per cent. The counter has rebounded from a low of S$0.29 in August this year following a tumble from a historic high of S$0.88 in October 2014.

Reflecting on this contract and another recent newbuild order - despite a dismal offshore marine sector - RHB Bank analyst Lee Yue Jer noted the potential upside from an eventual recovery in demand for subsea and diving support vessels, given that field maintenance regimes cannot be postponed indefinitely. But the analyst also advised caution, citing Vard's depleting order book despite the new orders and the downside risk of Vard's exposure to a weakening Brazilian real.