Norwegian offshore shipbuilder Vard is facing major challenges amid the doldrums in the offshore sector resulting in layoffs, temporary layoffs and yard closures.
Temporary layoffs have been used across the company’s Norwegian yard to manage to impact of low workloads, however at Vard Brevik the entire workforce has been laid off while new business opportunities are being explored to utilize the idle capacity.
While Vard said operations in Romania and Vietnam are stable, in Brazil the Vard Niteroi yard has been shut down and the lease land area returned to owners in mid-July. The workforce has been terminated and some key resouces have been transferred to Vard Promar, which is still experiencing high activity levels.
Vard reported revenues of NOK4.2bn for the first half of 2016, down from NOK5.6bn in 2015. The company attributes the revenue reduction to reduced activity at the European yards and in Brazil at Niteroi.
“The offshore oil and gas market continues to be challenging, with limited opportunities for new contracts in the new term. As several offshore players are undergoing financial restructuring, the group will continue to focus on counterparty risk by working with clients to ensure the delivery of its current order book,” Vard said in its results release.
