VARD built vessels mainly for the offshore industry, and had a reputation for constructing specialized vessels, many of them based on their in-house design. Their shipyards are in Norway, Romania, Brazil and Vietnam.
Vard was hard hit by the prolonged slump in the price of oil: new orders dried up, customers went bankrupt, and confirmed orders were either cancelled or deferred. To make matters worse, Vard’s loss-making shipyards in Brazil were dragging the company down.
Vard responded to the downturn by diversifying into building vessels for the cruise and fishing industry. Their current order book, with a majority of new orders coming from outside O&G, reflects the success of their diversification strategy. Meanwhile they have restructured their operations and, after several wrenching quarters, expect to be profitable in 2017.
Their current order book, with a majority of new orders coming from outside O&G, reflects the success of their diversification strategy.
Vard is not out of the woods yet, but nevertheless offers an interesting opportunity to invest in a prospective turn-around. Majority shareholder Fincantieri’s unconditional offer is proof of the company’s improved prospects, as is the fact that only about one-third of the share capital not previously controlled by Fincantieri chose to accept the offer.