Keppel O&M's 3Q 2015 Net Profit Falls 34% YOY to $119.7M

Keppel Corp. Ltd.'s subsidiary Keppel Offshore & Marine Ltd. (Keppel O&M) posted a 34 percent decline in net profit for third quarter 2015 (3Q 2015) to $119.7 million (SGD 166 million) from $181.7 million (SGD 252 million) last year, amid a slowdown in orders for new drilling rigs in the current low oil price environment, the company said in its release of financial results Thursday.

Keppel O&M's revenue slipped 36 percent during the quarter to $1.02 billion (SGD 1.411 billion), compared to $1.59 billion (SGD 2.199 billion) a year ago, with the reduced earnings lowering the segment's contrinbution to the conglomerate to 58 percent from 69 percent in the corresponding period.

Ongoing projects completed by the firm during the first nine months of this year included six jackups, 2 jackup repairs, a jackup integration, 2 semisub repairs and an accommodation semisub. Other completed assignments relate to offshore production, comprising an floating liquefied natural gas (FLNG) conversion, an integration of a floating production, storage and offloading (FPSO) topside modules, an FPSO update, a Depletion Compression Platform, a floating crane and three turret fabrications. Meanwhile, Keppel O&M also completed work on two ice-class supply vessels, an ice-class multi-purpose duty rescue vessel, a submersible barge and a tug.

The company is scheduled to deliver six jackups in 4Q 2015 to Grupo R, Falcon Energy, Energy Arabian Drilling Co. and Perforadora Central, excluding three which have been deferred to early 2016.

"In the current challenging environment, we have acceded prudently to requests for slightly later delivery of three jackups, two for Grupo R and the other for Parden Holdings, from 2015 to early next year," Keppel Corp. CEO Loh Chin Hua said in the press release.

Keppel O&M's net orderbook year-to-date stood at $7.2 billion (SGD 10 billion), including $1.22 billion (SGD 1.7 billion) secured in the first nine months of this year, which would keep the yard busy till 2020.

"While there was a fall in demand for drilling rigs, our projects such as conversions and specialized shipbuilding are bolstering Keppel O&M’s performance ... We are also winning customers for more diversified and specialized solutions such as FLNG conversions, liftboats as well as ice-class vessels which will position us to capture more value," Loh added.