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Loss-making Vard trims workforce, shuts Niteroi facility

Loss-making Vard trims workforce, shuts Niteroi facility
Troubled OSV builder Vard Holdings has temporarily laid off workers at its Norwegian Vard Brevik yard and operations have ceased at its Brazilian Vard Niteroi facility, the company said as it announced a first half loss.

Vard said “the entire workforce at Vard Brevik has been laid off temporarily, while the group seeks new opportunities to utilise the idle capacity.”

Elsewhere at Brazil’s Vard Niteroi following the delivery of an AHTS vessel in April and completion of outfitting works to a LPG carrier, the facility has since been shut down, and the leased land has been returned to the owners in mid-July.

“Most of the workforce has been terminated following the yard’s closure, with some key personnel transferred to Vard Promar to further strengthen the management team there,” Vard stated.

Projects at Vard Promar included construction of three LPG carriers and two offshore vessels.

Amidst the depressing offshore oil and gas market, Vard expects limited new contract opportunities in the near term, and it is exploring non-traditional markets as part of its diversification strategy.

“While the offshore market goes through an unprecedented phase of consolidation and restructuring, Vard remains committed to expanding its client base in new market segments, tapping opportunities for growth,” said Roy Reite, ceo and executive director of Vard.

In the second half of 2016, Vard posted a net loss of NOK16m ($1.9m), narrowing from the larger loss of NOK34m in the same period of last year. During the second quarter of this year, the company recorded a loss of NOK53m as against the profit of NOK34m in the year-ago period.

Vard said its weak results were impacted by its exposure to Rem Offshore, which is currently negotiating a restructuring plan with its main stakeholders.

Revenue for the first half stood at NOK4.24bn, down 23.6% year-on-year due mainly to lower activity levels at its European yards and at Brazil’s Vard Niteroi.