2 big reasons behind VARD's 30% profit crash

But it is positive about its order book.

According to OCBC, VARD Holdings’ 1Q revenue and net profit declined by 2% and 30% YoY to NOK2.7b and NOK188m respectively, largely due to (i) the completion of several high-margin jobs last year, and (ii) operational challenges in the Niteroi yard in Brazil. 

Although 1Q results were lower than ours and consensus estimates, we now see positive developments that we believe would herald an earnings recovery in FY14F.

Here's more from OCBC:

Firstly, management is now more positive on Brazil and expects operations to stabilize by year-end as improvement measures take effect. The new Promar yard is on schedule for commencing operations in June 2013.

Management is also confident of keeping to the original delivery schedule for LPG tankers 3 to 8.

Secondly, management is optimistic about its order outlook. Incorporating the delivery of 5 vessels in 1Q and the 6 new contracts secured since the beginning of 2013, we estimate the current order-book to be ~NOK16.5b (or 1.3x book-to-bill).

This is a very healthy level, which should provide a base for a better FY14F performance.