Underpinned by higher oil prices, Singapore’s Keppel Corporation is seeing increasing confidence in offshore and marine business despite its own Offshore & Marine (O&M) division recording a loss and lower revenues in 1Q 2018.
According to financial statements for 1Q 2018 by Keppel Corporation on Thursday, the Offshore & Marine (O&M) division incurred a net loss of S$23 million for 1Q 2018, compared to breakeven for 1Q 2017, due mainly to share of associated companies’ losses in the current period.
The O&M division achieved an operating profit of S$8 million for 1Q 2018, which is an improvement over S$4 million recorded in 1Q 2017.
The company’s revenues in the first quarter of 2018 totaled S$332 million, a decrease of 31% compared to S$483 million in 1Q 2017.
Meanwhile, Keppel said that the O&M division continues to pursue projects and opportunities in new markets and niche segments. In the year to date, the O&M Division has won new contracts of about S$580 million, or close to half of the S$1.2 billion secured for the whole of 2017.
The latest orders comprise a newbuild harsh environment semi-submersible with Awilco, Keppel’s first newbuild drilling rig order in three years, and a contract to build Singapore’s first dual-fuel bunker tanker. The contract with Awilco includes options to build three similar units, to be exercised progressively over 36 months.
Keppel Corporation CEO, Loh Chin Hua, commented: “We are seeing increasing confidence in the offshore and marine business, underpinned by rising oil prices.
“While there are pockets of opportunities in niche markets, it may take some time before we can see sustained recovery across the board. The jack-up market continues to be plagued by a supply overhang, with both utilization and day rates remaining soft.”
Keppel O&M’s net orderbook at the end of March 2018 stood at S$4.3 billion compared to S$3.9 billion at the end of 2017.
When it comes to group performance, Keppel Corporation recorded a net profit of $337 million, which was 34% higher than the same quarter last year. Correspondingly, earnings per share increased by the same extent to 18.6 cents.
The group’s revenue at $1.5 billion was 18% higher than the same quarter last year.
Offshore Energy Today Staff