SINGAPORE (Nov 10): Vard Holdings saw 3Q17 losses narrowed to NOK9 million ($1.5 million) from losses of NOK104 million a year ago on higher sales.
The shipbuilder’s bottomline was further boosted by reduced structuring costs and stable depreciation compared to a quarter ago.
Revenue for the quarter grew 33% to NOK2 billion compared to NOK1.5 billion in 3Q16, backed by high activity levels at the yards in Romania and Vietnam which the group says was due to rapid progress made on the Module Carrier Vessels projects for Topaz Energy and Marine, and Kazmortransflot, as well as the ongoing construction on all six expedition cruise vessels contracted in 2016.
Notably, net financial items turned positive to NOK16 million in 3Q17 from negative NOK29 million in 3Q16, due to foreign exchange gains compared to losses in the previous year.
The group recognised restructuring cost of NOK11 million during the quarter related to termination benefits and statutory payments for temporary redundancies, mainly in Europe and Brazil.
Vard says its shipyards in Norway are still seeing low utilisation rates while preparing for the arrival of new hulls currently under construction in Romania. In Vietnam, it notes that operations remain stable and rapid progress is being made on its MCV projects.
In Vietnam, it notes that operations remain stable and rapid progress is being made on its MCV projects.
While the group acknowledges continued challenges in the offshore market, it also highlights signs of recovery in the long term in the broader oil & gas industry.
Vard remains cognisant of the risks pertaining to its offshore project portfolio, as well as the postponed deliveries of some of its projects resulting from certain clients within the offshore segment undergoing financial restructurings.
Shares in Vard closed 1 cent lower at 25 cents on Thursday.
