Vard Holdings

Vard Holdings: Has secured a contract with repeat customer BOURBON, for the design and construction of one arctic AHTS vessel. The vessel will be operated by Bourbon Offshore Norway and is scheduled for delivery from Vard Brattvaag in Norway in 1Q16. While no contact value was disclosed, we estimate similar higher-specs AHTS to be valued in the range of ~NOK500-700m. The latest contract effectively lifts Vard’s order book to ~NOK20b, providing revenue visibility over the next 2-3 years. Maybank-KE remains sanguine on the counter, having commented in a recent note that `the worst is over’. The house reiterated its Buy rating with TP $1.04, pegged at 8x average FY13-15 P/E. Nevertheless, execution remains key, and the market will likely watch for turnaround in the group’s ailing Brazil operations before becoming more optimistic on the stock’s outlook. At the current price, Vard trades at 12.1x forward P/E and 1.3x P/B versus its local peers average of 9.5x and 1.2x respectively.