Singapore-listed marine, property, and infrastructure company Keppel Corporation is confident it can “tide through the downturn” by cost management and seizing market opportunities as they come along.
According to its filing at the Singapore stock exchange (SGX), the company’s offshore and marine division was hit by highly volatile oil prices, the expected reduction in global exploration, and the potential oversupply of oil rigs. There had been no drilling rig orders since the start of the year and the many rig enquiries had failed to materialise as new contracts.
However, Keppel chief executive officer Loh Chin Hua said he did not believe the low oil prices would last indefinitely and stressed that the company would continue to leverage on its propriety know-how and strong relationship with customers to develop innovative offshore solutions for areas beyond drilling, where demand was expected to remain resilient.
“We have done it before and we will do it again,” said Loh, highlighting the company’s history of resiliency against market downturn.
Keppel recorded a net profit of SGD360 million in 1Q15, up 6% compared with SGD339 million in 1Q14. The company’s earnings per share were SGD0.19 in 1Q15, an increase of 6% from SGD0.18 in 1Q14.
The offshore and marine division, which builds offshore drilling rigs and support vessels, has clinched new orders amounting to SGD500 million (USD367 million) in non-drilling-related business in 1Q15, mostly though a multi-purpose newbuild vessel based on Keppel’s own design as well as fabrication work for floating production, storage, and offloading-related equipment.
To date, the division has a net order book of SGD11.3 billion, with deliveries extending into 2019. In the meantime, it will continue with its ‘Near Market, Near Customer’ strategy to improve its productivity and efficiency.
Loh said he did not expect Sete Brasil, which is building up Brazil’s deep-water rig fleet, to cancel its projects with Keppel. Keppel would explore all options with the possibility of slowing down on rig construction until Sete Brasil had sewn up long-term financing for its Keppel projects.