Vard Holdings Limited (VARD) announced that it has won a contract for the design and construction of one arctic Anchor Handling Tug Supply (AHTS) vessel for BOURBON. BOURBON is a leading OSV operator which operates a fleet of 485 vessels and posted revenues of EUR1.3b (+10.5%) in FY13. In the past, VARD had delivered seven sophisticated vessels to BOURBON. This latest arctic AHTS order is of VARD’s internal design, has a bollard pull of ~270 tons, is arranged for Remote Operating Vehicle (ROV) and has an accommodation capacity for 60 persons. Delivery of this vessel is slated in 1Q16 from one of VARD’s Norway yards. Although the value of the contract was not disclosed, we believe a ballpark range could be NOK650-700m. YTD, VARD has secured ~NOK2.1b of orders, based on our estimates. We maintain our HOLD rating and S$0.84 fair value estimate on the stock (pegged to 8x FY14F EPS).

Source: OCBC Research - 10 Feb 2014