A year ago, the giant European shipbuilder Kvaerner ASA and its expansion-minded chief executive Erik Tonseth staked a claim in a brave new world -- the United States.

Buoyed by a government subsidy of nearly a half-billion dollars, the shipbuilding and construction conglomerate, then quite profitable, announced it would return world-class commercial ship construction to America -- specifically, at the old Philadelphia Naval Shipyard.

What a difference a year makes.

The Philadelphia shipyard project is still here, and chugging along on schedule, but Tonseth is gone, and Kvaerner's profits have plummeted. And soon to go are significant chunks of the multinational company's "non-core" assets.

And if you invested in Kvaerner last year, you took a bath in water about as cold as the ocean off Tonseth's native Norway.

On Oct. 21, 1997, Kvaerner traded at $29.25. Yesterday, it closed at $7.00, for a 76 percent loss. Kvaerner stock trades as American depositary receipts on the over-the-counter exchange. Its primary exchange is in Oslo, Norway.

A Kvaerner spokesman at the firm's London offices was quick to say that Tonseth's departure last week will have no effect on the Philadelphia project, which is scheduled to start building its first ship next summer.

"We have a very firm agreement with U.S. authorities and we are committed to that," said Paul Emberley, vice president for corporate communications. "It's central to our strategy of developing our shipbuilding in the Americas."

Tonseth played a key role in the Philadelphia deal, including final face-to-face negotiations with Gov. Ridge and other state officials.

What pushed Kvaerner's shares into the hole -- and Tonseth over the side -- were a variety of factors. First, the massive debt Kvaerner acquired during an expansion binge that peaked in 1996, when the Norwegian firm purchased the English construction and shipping firm Trafalgar House PLC.

Last year the company miscalculated its bid for a series of cruise ships, winning the contract for its Finnish yard but taking a $26 million loss. And the Asian economic crisis has depressed the shipbuilding business worldwide.

On top of that, its subsidiary that builds oil- and gas-production equipment for the offshore petroleum business suffered large losses.

Kvaerner is paying interest on about $1.6 billion in debt. To reduce it, Kvaerner has been selling off assets, such as the Cunard Line acquired in the Trafalgar House purchase.

Tonseth announced a major restructuring last month, but this month the board of directors decided someone else would better put that plan into place.

"The board didn't disagree with his strategy for refocusing the business. . . . It simply said the implementation of it was not good enough . . . hence it asked Erik Tonseth to step down," Emberley said. Tonseth's replacement, from outside the company, likely will be named in "days or weeks," Emberley said.