The negative performance of its Brazilian operations is likely to affect the company until delivery of the last vessel in the current book of its Niteroi shipyard.
“While the company remains confident in the long term potential of the Brazilian market, the overall industrial context in Brazil is still challenging, being characterised by high personnel turnover and very high pressure in the subcontracting market,” Vard said.
Singapore-listed Vard warned investors that its results for the quarter ended 30 June 2013 will be lower than the current consensus market estimates. Vard did not give a forecast figure for its second quarter profit.
“Margins are impacted by further delays and cost overruns at the Niteroi yard due to lower productivity than expected, additional costs for outsourcing of hull construction activities to subcontractors, and revisions to the estimates of start-up costs at the new shipyard, Vard Promar,” it said.
The company said that stabilising the Niteroi operations and ramping up the new yard are a top priority, adding that its presence in Brazil, despite the challenges, offers opportunities for growth and improving cost position.
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