Keppel Corporation's unit Keppel Offshore & Marine (Keppel O&M) posted net profit of $229.5 million (SGD 287 million) for the fourth quarter of 2014 (4Q 2014), up by a marginal one percent from $227.9 million (SGD 285 million) last year, according to the company financial results released Friday.
The company's 4Q 2014 turnover reached $1.9 billion (SGD 2.376 billion), 15 percent more than $1.656 billion (SGD 2.071 billion) recorded in the previous year amid higher revenue recognition from on-going projects.
These projects included three jackups, two floating production, storage and offloading (FPSO) conversions, one floating liquefied natural gas (FLNG) conversion, one subsea construction vessel and one semisubmersible.
Keppel Offshore & Marine's has a net orderbook of $10 billion (SGD 12.5 billion) as at end 2014 and one that stretches out to 2019. Of these, semisubs accounted for 44 percent of the total orderbook, while jackups were next at 31 percent, followed by FPSOs/FLNG and others which made up 21 percent and 4 percent, respectively.
In 4Q 2014, Keppel O&M clinched $1.44 billion (SGD 1.8 billion) worth of new orders, consisting of one jackup, one land rig, one jackup repair and one FLNG conversion.
Looking ahead, Keppel CEO Loh Chin Hua believed that "the low oil prices we see today are not sustainable in the long run. The oil and gas sector will inevitably move towards a new equilibrium ... as seen in previous cycles. As such, oil price is widely expected to recover to healthier levels and quite a number think this is likely to happen as early as in the latter half of this year. Until then, the concerns will continue to be a drag on sentiments in 2015."
Still, the Singapore-listed firm noted that oil companies' profitability has been eroded by rising costs and the recent sharp decline in oil price, which have raised hurdle rates for new project sanctions.
"But even at current price levels, all is not lost as offshore prospects are still viable in certain geographies such as Southeast Asia and the Middle East," Loh said in the press release.
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