VARD

VARD: Entered a Letter of Intent with Simon Møkster Shipping for the design and construction of one Platform Supply Vessel (PSV), scheduled for delivery in 1Q2015. Based on historical contract prices, a base-model PSV costs NOK250m (~S$52m). The PSV 06 LNG is an dual-fuel LNG / diesel-electric ship built with a focus on lower consumption emissions of greenhouse gases. Year-to-date VARD has reported total orders of NOK2.4b, excluding the Letter of Intent above. Share price has been lacklustre recently after the close of offer by Fincantieri, as investors focus on the company's longer-term margins, and also perhaps Fincantieri's silence to minority shareholders. Management is optimistic on subsea construction orders going forward; Petrobras also recently announced its intention on ordering 24 Offshore Support Vessels by Jul 2013, part of its Fleet Renewal Plan. VARD currently trades at 7x trailing P/E;