Vard widens Q1 loss

SHIPBUILDER Vard Holdings on Monday posted its 2018 fiscal first-quarter net loss that widened from the previous year-ago quarter.

Net loss for the three months ended March 31, 2018 stood at 109 million Norwegian krone (S$17.8 million), compared to 25 million krone the same period a year ago. This translated to a loss per share of 0.09 krone, compared to a loss per share of 0.02 krone.

Revenue for the fiscal first quarter 2018 was 2.27 billion krone, up 28 per cent from a year ago, due to increased activity, especially at the Romanian yards that reflect the progress of the six expedition cruise vessels under construction. But Vard widened its operating loss as its Ebitda (earnings before interest, taxes, depreciation and amortisation) margin before restructuring cost decreased from 2.3 per cent in the year-ago quarter, to "nil" in the fiscal first quarter 2018. It also recorded a restructuring cost of 11 million krone during the period.

Its cash flow from its operating activities swung into negative territory for the quarter, at negative 266 million krone at the end of March 31, 2018, compared to a positive cash flow of 243 million krone as at March 31, 2017.

"Risks are still inherent in the group's existing offshore project portfolio. The group has postponed delivery of some projects amid ongoing financial restructurings of clients in the offshore segment," it said in its financial statement. "Vard would reiterate the difficult political and economic context and complex regulatory environment in Brazil, which still represents a challenge to the Brazilian operation."

Italy's Fincantieri, which already has more than 80 per cent stake in Vard, has made an exit offer to buy the remaining shares that it does not already own at 25 Singapore cents apiece. Following unhappiness from its minority shareholders over, among other things, the errors in the circular to shareholders, the exit offer has been extended to late July. The Singapore Exchange Regulation, or RegCo, has ordered Vard to hold a new extraordinary general meeting.