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Oil rig builder Keppel Corp Q3 net profit down 15 pct
Oct 18 (Reuters) - Singapore's Keppel Corp Ltd , the world's largest oil rig builder, reported third-quarter net profit of S$346 million ($284.5 million) - down 15 percent from a year earlier - as a result of lower-margin projects.
The third-quarter figure was above the S$324 million average forecast of five analysts polled by Reuters.
Keppel made net profit of S$520.9 million in the April-June quarter of this year when it booked gains from property units it sold earlier via a deferred payment plan. ($1 = 1.2163 Singapore dollars) (Reporting by Eveline Danubrata Editing by Daniel Magnowski)
Keppel profit falls 15% as Chinese shipbuilders target oil-rigs
Keppel Corp., the world’s largest oil-rig maker, reported a 15% decline in third-quarter profit amid rising competition from Chinese shipbuilders.
Net income fell to $346.4 million in the three months ended Sept. 30 from $406.1 million a year earlier, the company said in a statement to the Singapore stock exchange today. That was lower than the $388.7 million average of three analysts’ estimates compiled by Bloomberg. Sales climbed 19% to $3.2 billion.
Prices for oil rigs and other offshore units have come under pressure, Keppel said, as Chinese shipbuilders including Cosco Corp. Singapore and China Rongsheng Heavy Industries Group Holdings expand into the market. The Chinese yards are targeting the sector because of a collapse in demand for dry-bulk vessels, their traditional focus.
“Chinese yards and even Korean yards are hungry for jobs,” Tong Chong Heong, head of Keppel’s offshore unit, said on a webcast. “As long as they are hungry, there will be severe competition.”
Operating Profit at Keppel’s offshore and marine unit fell 33% to $287 million. Operating margins to sales narrowed to 13%, from 26% a year earlier. The company also has a property unit.
Order Book
Keppel has won $8.8 billion of new orders this year. Its order book stands at $13.1 billion, with deliveries stretching into 2019, the company said. Oil companies are boosting spending on new equipment because of higher crude prices and declining reserves.
The rig-maker closed little changed at $11.39 in Singapore trading before the earnings announcement. The stock has advanced 22% this year, compared an 16% gain for the 30- stock Straits Times Index.
The company signed a US$4.1 billion ($5 billion) order in August to build five semi-submersible rigs for Sete Brasil Participacoes SA, an affiliate of Brazil’s state-backed oil company Petroleo Brasileiro SA. It received a US$950 million contract to build a floating oil production unit for Petrobras.
Sete Brasil said in February it will spend US$27 billion by 2020 on drilling units. The company ordered an US$809 million semi-submersible rig from Keppel in December.
High Overhead and Material Costs Cut Deep into Profits at Keppel Corp
Keppel Shipyard – Tuas, image: Keppel O& M
SINGAPORE–Keppel Corp. (BN4.SG) Thursday said third-quarter net profit fell 14.7% from a year earlier as a rise in costs outpaced revenue growth.
Net profit for the three months ended Sept. 30 fell to S$346.4 million from S$406.1 million a year earlier.
Revenue rose 19% to S$3.22 billion due to higher revenue from its offshore and marine and property divisions, the company said in a statement.
Material and subcontracting costs soared 32.8% to S$2.3 billion while staff costs rose 9.8% to S$395 million, it said.
Keppel’s Chief Executive Choo Chiau Beng projected a positive outlook, saying that offshore exploration and production spending remains buoyant, supported by Brent oil prices of above US$100 per barrel.
“Oil companies have strong impetus to continue sanctioning projects. Recent discoveries in the North Sea, as well as deepwater Mexico and both coasts of Africa, have also fueled optimism for further exploration work,” Mr. Choo said in the statement.
Keppel, the world’s biggest rig builder by volume, secured S$8.8 billion of new orders in the nine months ended Sept. 30, taking total orders at its marine and offshore division to S$13.1 billion, with deliveries extending into 2019.
- Gaurav Raghuvanshi, (c) 2012 Dow Jones & Company
Keppel unit wins $394m contract to build semisub from Floatel
Tags: Keppel Corp. | Keppel Corporation
Tags: Keppel Corp. | Keppel Corporation
| Written by The Edge | |||||
| Tuesday, 21 August 2012 19:38 | |||||
Keppel FELS, a unit of Keppel Corp, has won a contract to build a new generation harsh environment accommodation semisubmersible worth US$315 million ($394 million) for Floatel. This follows the signing of a Letter of Intent announced by Keppel and Floatel earlier in March this year. With delivery in early 2015, the new semi will be built to the Floatel Superior design, a DSSTM 20NS design developed by GustoMSC and Keppel FELS’ Deepwater Technology Group. Equipped with Dynamic Positioning (DP) 3 capability, it will meet the most stringent rules and regulations for worldwide operations including the Norwegian sector. Equipped with a host of modern facilities, the semi will have a large payload and deck area in combination with dual cranes, making it ideal for construction support during new construction, maintenance activities or for decommissioning projects of offshore oil and gas installations. It will be able to accommodate 440 persons in single bed cabins with ample recreation areas as well as office amenities. This will be Floatel’s fourth accommodation semi with Keppel FELS after the delivery of Floatel Superior and Floatel Reliance in 2010 and the order of Floatel Victory in 2011, which is scheduled for delivery in 4Q 2013. Floating accommodation platforms are needed to provide additional living quarters for support personnel in exploration and production activities. Such support personnel are required during hook-up and commissioning in the development phase, for maintenance and upgrading during the production phase, as well as for decommissioning. |
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