VARD: Strong Order Intake, Investments in Future Growth

Vard Holdings Limited (VARD), together with its subsidiaries, one of the major global designers and shipbuilders of offshore and specialized vessels generated revenue of NOK 2.75 billion for 1Q 2013, representing a 2% dip from the same period in 2012 (1Q 2012), reflecting overall stable operations in spite of challenging circumstances in some markets.

Order intake for 1Q 2013 more than double

On the back of continued strong demand for high-end subsea construction vessels, VARD secured contracts for three large and highly complex offshore subsea construction vessels (OSCV) from key clients Solstad Offshore, Farstad Shipping and DOF Subsea in 1Q 2013. Order intake for the quarter was NOK 2.8 billion in total.

The Group’s solid new order intake more than replenished the order book for the quarter. This also represents a more than doubling of the NOK 1.3 billion order intake for 4Q 2012, and a close to 20% increase from 1Q 2012. Taking into account the five vessels delivered during the quarter, VARD’s order book comprised 46 vessels as of 31 March 2013. More than half, or 26 of these vessels in the order book, will be of VARD’s own design. Total order book value stood at NOK 15.5 billion, slightly up from year-end 2012.

Major investments in Romania and Vietnam

VARD’s yards in Romania and Norway are operating at full gear. The Norwegian yards have surpassed the brief period of temporarily lower utilization recorded during the previous quarter. Four vessels were successfully delivered from Norway during 1Q 2013.

Investments in new facilities and advanced technology are currently being implemented in Romania, aimed at securing VARD’s long-term competitiveness in Europe. Enhanced automation, new blasting and painting facilities, and a state-of-the art piping prefabrication facility are projected to increase productivity, quality and throughput. While the yard in Vietnam is currently seeing lower utilization, it is implementing investments such as an extension of the floating dock, aimed at improving its long-term capabilities to take on larger and more complex vessels.

Vard Promar on schedule

The Group’s new shipyard in Brazil, Vard Promar, is more than 85% completed. Dredging of the harbor basin was completed in April. With virtually all vital functions for commencing operations in place, Vard Promar is well on its way to commence shipbuilding operations at the end of June this year, in line with previous estimates. Recruitment and training are ongoing, with approximately 190 staff employed so far.

(1 Norwegian Krone = 0.17 US Dollar)

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Shipbuilding Tribune Staff, May 17, 2013