Vard (formerly: STX OSV)

[l0nEr]

Hi Loner, care to post where you got those figures on point 2? I'll try to make some sense out of them.
To further address your post, book value multiples can imply future earnings expectations. In theory, if roe exceeds required returns on equity, price is expected to exceed book value. Ev multiples can also be similarly justified comparing fcff to wacc. Margins are not exactly locked in when contracts are signed. Only price is locked in unless it's a cost plus contract. In this case, the entire Brazilian shipbuilding industry is suffering from delays and cost overruns due to demand/supply of subcontractors and other personnel.
My gut feel guess is that Stx probably signed many orders at low margins to dress up the order book for the sale. This might also explain the low transaction price relative to market price at that time. Now, the accounting standards for long lived contracts requires management to recognize all foreseeable losses on the contracts. Based on the language of the profit warning, I am suspecting that this is the case.

Ive attached the slide from the Q1 presentation.
The figures are based on calculated based on the assumptions that the norway/romania/vietnam ships can maintain their EBITDA margins, while adjusting the Brazilian ships lower.

yes, they have already said the newer contracts are of lower expected margins due to competition and different boat types. Cant remember if the PSV or AHTS are the lower margin types, which is why they will never be able to generate the peak 17% margin achieved in 2011.
Agreed, I meant some ppl tend to look at PB individually, without considering the ROE factor. What i meant was margins would have been expected before they enter into a contract (there is a IRR before they enter), and except for cost overrun, they should achieve that margin. So in the sense you probably can estimate roughly where the margin would be, but with a greater downside risk.