Vard

Vard: Clinched new contracts worth over US$100m (NOK852.4m) from a new customer, Dubai-based Topaz Energy and Marine, for two offshore subsea construction vessels.

The two vessels will be designed by Vard Design in Ålesund, Norway, while the hulls will be constructed at Vard Tulcea in Romania, with delivery by Vard Brattvaag in Norway in 3Q17 and 4Q17, respectively.

This is the second contract that the embattled shipbuilder has secured since the release of its disappointing 2Q results in Jul, which was plagued by operational issues amid the waning oil price.

Although its share price seems to have found a bottom at $0.28, which translates to 0.46x P/B), investors are still awaiting the outcome of Vard's appeal to the Brazilian tax authority, on its outstanding tax liability of NOK200m.

Vard has not made any provision for this huge tax liability, and rejection of its appeal could tip the yard into an untenable financial position, given its current net gearing of 222%.

Previously, management guided the utilisation rates at its yards to deteriorate further in 2H15 and into 2016. Hence, investors could take any bounce in share price as an opportunity to exit.

At the current price, Vard is trading at a 27% discount to its book value of $0.61.