Offshore shipbuilder and designer Vard has slipped further into a third quarter loss. The company on Wednesday posted a net loss of NOK 845 million, compared to a loss of NOK 160 million. Revenue was NOK 2.27 billion, down 19 percent from NOK 2.8 billion a year ago.
In its quarterly presentation, Vard said that its core market for offshore support vessels continued to be weak, especially for platform supply vessels and anchor handlers in the North Sea. This in turn affected Vard’s European shipyards. The company’s yards in Europe delivered one vessel in 3Q 2015 and seven vessels so far this year.
In Brazil, the company downsizing at Niterói continued in line with the decreasing workload following recent vessel deliveries. The workforce will be further reduced in coming months on the back of the progress of the construction. Vard also owns a yard in Vietnam, where the company says, the situation is stable and yard utilization is still good.
On the back of depressing oil and gas prices, the company said it would be looking to diversify production and the regions it operates in, hoping to reduce dependency on the cyclical oil and gas business.
“Vard is increasingly active in regions outside its traditional North Sea home market, as evidenced by two contracts secured during the quarter from Dubai-based Topaz Energy and Marine, and in non-offshore related specialized vessels segments, as demonstrated by two orders for advanced fishing vessels for Canadian and Norwegian clients. Vard has also launched a new vessel design series targeted at the fisheries and aquaculture market,” the company said in a statement.
In line with the declining activity levels in its yards, the Norway-based company is continuing its cost reduction and efficiency improvement program continues in all entities, targeting direct and indirect cost savings. Vard is also working on a new business plan, which is expected to be announced together with the full year 2015 results.
Roy Reite, Chief Executive Officer and Executive Director of Vard, said, “We will continue to pursue cost improvement initiatives and organizational changes to streamline our business, and
make the Company competitive to seize new business opportunities. Our recent efforts to broaden our vessel offerings have been encouraging, and we will accelerate these efforts in the coming months, also looking at completely new business areas. Vard has a strong set of core competencies, technologies, and relationships that allow us to look beyond the current industry downturn.”