VARD Holdings reported a 34% YoY drop in revenue to NOK1.5b and a smaller net loss of NOK80m in 3Q16 vs. net loss of NOK486m in 3Q15.This brought 9M16 net loss to NOK96m, in line with our expectations; we were forecasting NOK170m net loss for FY16.

At the end of 3Q16, the order book amounted to NOK14.08b, higher compared to NOK11.93b at the end of 2Q16, boosted by new orders under its diversification strategy.

In Brazil, the Niteroi yard was closed down in 3Q16, and key resources were relocated to the Promar yard. Restructuring cost of NOK27m was related to termination benefits and statutory payments for temporary redundancies.

Pending more details from management, we maintain our HOLD rating but put our fair value estimate of S$0.166 under review.

Source: OCBC Research - 11 Nov 2016