Vard axes Brevik staff, closes Brazilian yard as loss deepens

Vard Holdings, a designer and shipbuilder of offshore and specialized vessels, has temporarily laid off its entire workforce at Vard Brevik in Norway and shut down Vard Niterói in Brazil, axing most of its workforce there. 

During the second quarter of 2016, Vard ceased all shipbuilding activities at Vard Niterói thus reducing its exposure in Brazil.

According to the company’s statement, yard operations have since been shut down, and the leased land area has been returned to the owners in mid-July. Most of the workforce has been terminated following the yard’s closure, with some key personnel transferred to Vard Promar, Vard stated on Thursday.

The company added that the shipyards in Norway are experiencing varying degrees of utilization. With several offshore projects in advanced stages of construction, and one cancellation pending, the challenge is to bridge a period of low workload while awaiting the arrival of hulls for new projects from Romania, Vard explained.

To this end, the entire workforce at Vard Brevik has been laid off temporarily, while the group seeks new opportunities to utilize the idle capacity.

Furthermore, Vard posted on Thursday a deeper net loss that amounted to NOK 67 million in 2Q 2016, compared to a loss of NOK 51 million in 2Q 2015.

The company reported lower revenue of NOK 2.2 billion in 2Q 2016 representing a 10.9% decline from 2Q 2015 revenues that amounted to NOK 2.5 billion. The reduced turnover was mainly due to lower activity levels at the European yards and at Vard Niterói in Brazil.

The shipbuilder recognized restructuring costs of NOK 38 million during the quarter in relation to statutory payments pertaining to temporary lay-offs and termination benefits, mainly at Vard Niterói.

Vard noted that the offshore oil and gas market remains challenging, and that the company expects limited new contract opportunities from the sector in the near-term.

Offshore Energy Today Staff