Havyard Sinks into Red

Havyard Group has slipped into loss in the fourth quarter 2014, despite significant growth in operating revenues, due to cost overruns in construction.

The Norwegian vessel designer and builder reported loss of NOK 13.3 million for the quarter, compared to NOK 12 million profit in the corresponding period of 2013. Earnings per share were negative NOK 0.52, versus NOK 0.45 in Q3 2014

According to the company, it was primarily the Havyard 535 fishing vessel and the first Havyard 832 SOV vessel that contributed to the negative result in the fourth quarter of 2014.

The Group’s operating revenue in the fourth quarter of 2014 was NOK 737.4 million, compared to NOK 479.7 million in the corresponding period of 2013. The increase is mainly due to increased activity at the yard in Leirvik.

There have been up to four vessels for outfitting at the same time in the fourth quarter 2014.

The operating revenue of 2014 was NOK 2 410.8 million, compared to NOK 1,986.9 million in the corresponding period in 2013.

Profit for the period ended December 31, 2014 was NOK 33 million, down from NOK 140.4 million at the end of 2013.

Earnings per share, for the full year also fell from NOK 6.13 to NOK 1.38.

The company informed, dividend of NOK 0.45 per share has been approved by the Board of Directors, and it’s payable in March.

“The margins for 2014 and for fourth quarter especially, were negatively affected by a higher than normal portion of the activity being related to construction of vessels with new designs. These designs typically have higher production costs than repeat construction of existing and well-known designs,” the company said in a statement.

Two vessels were finalized during the fourth quarter of 2014 including the newbuild no. 115, a Havyard 857 Subsea vessel to the Nigerian customer Marine Platforms Limited.

The Oslo-listed company, with its head office located in Fosnavåg, Herøy, employs 800 people as of 31 December 2014, of whom approximately 700 are employed in Norway.