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Vard Holdings 2015 group revenue $1.3 billion, down 14%

Staff writer ▼ | February 29, 2016
Vard Holdings Limited, a designer and shipbuilders of offshore and specialised vessels, announced its financial results for the fourth quarter and full year ended December 31, 2015.
Vard Holdings
Vard Holdings   EBITDA before restructuring cost was NOK 35 million
group revenue for FY2015 came in at NOK 11.14 billion ($1.3 billion), down 14% compared to FY2014, with the decrease due mainly to reduced activity at some of the group’s European shipyards, as a result of the shortfall in new orders.

EBITDA before restructuring cost was NOK 35 million for 4Q 2015 (4Q 2014: NOK 120 million), and NOK 321 million negative for FY2015 (FY2014: NOK 429 million positive).

While the rest of the group delivered a positive EBITDA, margins were impacted by the performance of its Brazilian yards. In Europe, the increasing cost of underutilized capacity contributed to lower margins compared to FY 2014.

The slowdown in activity also resulted in a restructuring cost of NOK 21 million in 4Q 2015 and NOK 77 million for FY2015, including severance payments for lay-offs as part of ongoing cost reduction efforts.

During 2015, the group’s total headcount in Norway and Romania declined by 8% and 27% respectively.

Operating profit decreased from NOK 85 million in 4Q 2014 to an operating loss of NOK 67 million in 4Q 2015, whilst it decreased from a profit of NOK 240 million for FY2014 to an operating loss of NOK 633 million for FY2015. The group recorded a net loss of NOK 1.29 billion for FY2015, compared to a profit of NOK 50 million for FY2014.

The net result for FY2015 was weighed down by NOK 474 million net foreign exchange losses (NOK 734 million FX losses and NOK 260 million FX gain), of which NOK 380 million net unrealized.

Of the FY2015 loss, NOK 603 million was attributable to equity holders of the Company, translating to a loss per share of 8.22 SGD cents for the period (FY2014: 5.25 SGD cents earnings per share).

Cash and cash equivalents were reduced by NOK 1.08 billion during FY2015. This is largely due to large projects requiring high working capital investments that exceeded available construction loan financing, and the materialization of the cash impact of the group’s losses in Brazil.

Due to the extraordinary market situation and increased risk, cash preservation and financing of the operations were accorded a high priority. The group has taken actions during the first months of 2016 to strengthen the balance sheet and liquidity.

In 4Q 2015, the group secured one new vessel contract for an OSCV, bringing the total order book for FY2015 to 29 vessels, of which 18, or 62%, will be of VARD’s own design.

The total value of VARD’s order book at the end of FY2015 was NOK 10.23 billion, compared to NOK 17.74 billion at the end of FY2014.

VARD is 55.63% controlled by Fincantieri which fully consolidates its financial results.