Vard Closes Two Shipyards

On Thursday, shipbuilders Vard Holdings announced new developments in the second quarter – including temporary layoffs for all staff at its yard in Brevik, Norway and the liquidation of one of its Brazilian facilities, Vard Niteroi. 

Vard Niteroi has closed out all of its projects, most of the workforce has been dismissed, and the land underneath the facility has been returned to its owners. Some of the management personnel from Niteroi were transferred to Vard Promar, where the firm is building three LPG carriers and two pipe laying support vessels. 

The firm continues to look for new work for Vard Brevik.

Yard utilization is doing better at Aukra, Norway, where the firm is building fish farming barges, and at its Romanian facilities at Braila and Tulcea, which will build nine of 15 specialized module carriers recently ordered by Topaz Energy and Marine. These yards are also seeing additional work for segments of cruise vessel hulls for Fincantieri, Vard's majority shareholder, plus hulls for four new cruise ships for Ponant. 

In Vietnam, Vard Vung Tao is outfitting a subsea construction vessel for Farstad, and is already working on the remaining six module carriers for Topaz. 

Vard noted that the continuing poor market conditions in offshore – historically the source of most of its orders –  means counterparty risk, and it is "working with clients to ensure the delivery of its current order book." The firm has already made a provision for expected losses from exposure to Rem Offshore, which is in negotiations with its creditors. Vard has an agreement in principle for the cancelation of one vessel for Rem, subject to approval in Rem’s talks with stakeholders. 

For the bottom line, Vard Group posted a net loss of roughly $3 million in the first half of the year, driven in part by one-time costs related to layoffs and closures. Overall, the group has an orderbook of 39 vessels worth a total of $1.4 billion – half of it from contracts awarded last quarter (the four cruise ships for Ponant, plus the 15 module carriers for Topaz). In addition, it expects contracts for an additional two expedition cruise ships in the third quarter.