Vard

Vard: Released 3Q13 results which were below consensus estimates. Net profit at Nok76m (-67% y/y), despite revenue at Nok2.37b (-3.5%). Ebitada margins slumped to 4.3% vs 13.5%. The weaker performance was mainly attributable to the grp’s operations in Brazil, which is still suffering from an overload situation, leading to further delays and cost overruns. However, the Group’s margins represent a slight improvement over the previous quarter and the Group returned to a net profit for the period. Operations in the European shipyards and in Vietnam were stable, with workload in Romania gradually reverting back to normal, while the yard utilization level in Vietnam has improved on the back of winning a new contract. Going forward, VARD holds a positive outlook for new order wins for the remainder of 2013 and going into 2014, and the grp currently has an order book of ~NOK19.6b, which is the highest since 2009, although we opine that execution continues to remain the key for the group. Latest broker ratings as follows: OCBC places Sell rating and $0.80 TP under review