Singapore-listed Keppel Corporation's unit Keppel Offshore & Marine (Keppel O&M) posted a net profit of $150.4 million (SGD 203 million) in the first quarter of 2015 (1Q 2015), down 12 percent from $171.2 million (SGD 231 million) from a year ago, with the decline attributed to lower operating results and net interest income, the company said in an announcement Thursday.
Keppel O&M's revenue however rose $5.9 million (SGD 8 million) in 1Q 2015 to $1.428 billion (SGD 1.927 billion), compared to $1.422 billion (SGD 1.919 billion) last year due to higher revenue recognition from on-going projects. Major jobs completed and delivered during the quarter included five jackups and an floating production, storage and offloading (FPSO) upgrade.
New orders secured by the firm in the first three months of this year amounted to $370.6 million (SGD 500 million), bringing the net order book to $8.3 billion (SGD 11.3 billion), with deliveries extending into 2019.
"The healthy net order book will keep the yards busy up to 2016," Keppel's Chief Financil Officer Chan Hon Chew said in the press release.
Still, the company commented that "the present low oil prices, if sustained, will negatively impact our offshore and marine business. It will be our strategy to tide through such periods of downturn by managing our costs, while preparing the Group to seize opportunities as they arise."
Keppel O&M highlighted the gloomy market environment, revealing that "not a single drilling rig order has been placed since the start of this year, and rig enquiries have also not been converted into any new contracts."
Meanwhile, Keppel revealed that the first three of six DSS38E semisubmersibles that it is constructing for Sete Brasil were about 89 percent, 58 percent and 32 percent completed and that payment has been received from the Brazilian firm for these rigs up to November 2014, including the 10 percent down payment for the remaining three units.
"We do not expect Sete Brasil to cancel their projects with Keppel. We are engaging our customer to see how we can best work together in the interim, and will explore all our options including the possibility of slowing down construction until Sete Brasil has sewn up long term financing for our projects," CEO Loh Chin Hua said.
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