Outlook for Vard Holdings remains dim

Singapore - Vard has been diversifying away from the oil and gas sector to boost orderbook but OCBC Investment Research warns client restructuring remains a hassle. VARD Holdings has been hit hard by the downturn in oil prices

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Singapore - Vard has been diversifying away from the oil and gas sector to boost orderbook but OCBC Investment Research warns client restructuring remains a hassle. VARD Holdings has been hit hard by the downturn in oil prices, considering that a key market, the North Sea, was one of the most impacted geographical segments in the offshore support vessel sector.

The downturn shows few signs of easing there; some owners and operators are looking at employing their vessels for work outside the traditional supply vessel sector, some are merging and others are going through major debt restructuring.

VARD has therefore been diversifying away from the oil and gas sector, and has successfully secured vessels relating to aquaculture, module carrier vessels (20 vessels since May; ~US$20m per vessel) and luxury expedition cruise vessels – the latter likely with the help of its parent company, Fincantieri, which is a large shipbuilding company with a long track record in naval, cruise ships and large ferries, amongst others.

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