Vard to streamline activityYard News // May 13, 2015
Vard Holdings Limited has announced financial results for the first quarter ended 31 March 2015.
The company said it continued to see a high level of activity at its yards and delivered five vessels during the first quarter. However, the group has been preparing for challenging times as its customers, which operate mainly in the oil and gas sector, are grappling with the effects of the industry down cycle.
No new vessel orders were secured by the group in the first quarter. At the end of the quarter, its orderbook was valued at NKr 15.6 billion, representing a 28 per cent decrease from the same quarter in the preceding year. The orderbook comprises 32 vessels, of which 18 will be of Vards own design.
The company said its earnings were hit by unrealized foreign exchange losses primarily stemming from a 15-year yard construction loan in Brazil denominated in US$. The unrealized losses have been partially reversed since the end of the quarter due to opposite exchange rate developments.
Measures are being put in place to reduce costs related to lower capacity utilization, and increase flexibility as activity declines. A strict cost-cutting programme is being implemented, including reduction of overheads, reduced use of outsourced and subcontracted labour, and temporary and permanent reductions in the workforce.
Roy Reite, Chief Executive Officer and Executive Director at Vrad, said: "We expect weak order flows to be a prevalent theme in 2015. To mitigate the effects of lower yard activity, we aim to streamline the cost structure of our business over the next few months, and foster stronger ties with new and repeat customers to better position ourselves for new orders once the industry makes a turnaround."