Vard Holdings Limited (VARD), one of the major global designers and shipbuilders of offshore and specialized vessels, today announced its fourth quarter and full financial year 2013 (4Q2013 and FY2013) results ended 31 December 2013.
Record order intake translates into improved visibility as order book extends into 2017
During 2013, VARD garnered its strongest full year order intake of aprox. $2.53 billion since the last peak order period in 2007, and concluded the year with its highest year-end order book value since 2008 of $3.2 billion, equivalent to about 21 months’ worth of revenues for the group.
The year also saw VARD achieve its largest-ever order win in the form of four Pipe Lay Support Vessels (PLSV) for DOF Subsea and Technip, contracted in August 2013.
In 4Q2013, three newbuildings were contracted and total new order intake amounted to approx. $364.6 million. Following 22 deliveries during the year, the group’s order book stood at 41 vessels as at 31 December 2013, of which 26 are of VARD’s own design.
Since then, three more vessels were contracted in the first six weeks of 2014 for a combined order value exceeding $331 million, further increasing VARD’s order book visibility.
Top line resilient amidst challenging operating environment
For 4Q2013, VARD recorded a 22.5% on-year increase in revenue to $513.8 million, up from $414.3 million in the fourth quarter of the preceding year (4Q2012), on the back of high yard utilization and good project progress.
While showing an improvement from the previous two quarters, 4Q2013 EBITDA decreased 45% to approx. $26.2 million compared to $47.5 million in 4Q2012, as further delays and cost overruns at the Niterói yard in Brazil continue to weigh on overall margins. EBITDA margin (representing EBITDA to total operating revenues) was 5.1% for 4Q2013.
On a full-year basis, revenues remained virtually unchanged at $1.85 billion, and the group registered $49.7 million in profit for the period, which represented a 62% decrease from FY2012. EBITDA for FY2013 stood at $113.7 million, and the EBITDA margin for the year was 6.1%.
Cash and cash equivalents stood at a healthy $281.7 million. Net asset value rose 17% as at 31 December 2013 compared to the end of the previous financial year.
Demand for larger and more complex vessels to remain strong the group has a positive outlook for new order wins in 2014. Exploration and production (E&P) spending growth is expected to continue, and demand for larger and more complex offshore support vessels is driven by an expanding rig fleet, in addition to wells growing deeper and fields moving farther from shore.
Of VARD’s core products, in particular the outlook for subsea support and construction vessels remains robust. The company believes there are also opportunities in the high-end AHTS segment, benefiting from higher rig count, demand from Arctic exploration and limited fleet growth in recent years.
Roy Reite, Executive Director and Chief Executive Officer of VARD, commented, “Overall, we have done well despite a very challenging operating environment in parts of the Group, and have laid the foundations for future growth and profitability. We have significantly strengthened our market position, reinforced relationships with key industry players, and secured a quality order book based on our solid track record of project execution. We look forward to working with our clients – both new and longstanding – in implementing these exciting projects.”
Press Release, February 25, 2014