Bookmark & Share
KEPPEL Corp posted solid earnings numbers for its second quarter, but its order book was a different story.
Net profit for the three months ended June 30 surged 147 per cent to $739.5 million after including $422.2 million in one-off gains.
Excluding these gains, profit rose 6 per cent to $317.3 million, but the figure is still the 'highest-ever recorded by the group in a quarter', said group finance director Teo Soon Hoe. Revenue rose 21.2 per cent to $3.2 billion.
However, Keppel's offshore and marine business has not won a major rig order since the start of the year.
It did not receive any orders for new building projects during the quarter, and its order book had dropped to $7.7 billion as at the end of last month, down from $9.5 billion as of March 31 and $10.8 billion as at the end of last year, with deliveries extending up to 2012.
'Of course, we are concerned (about the decline in the order book); we are in a cyclical downturn of the offshore and marine industry,' Keppel chief executive Choo Chiau Beng, who is also chairman of its offshore marine division, said at a results briefing.
He added that Keppel's long-term fundamentals remain intact and that the group 'will be able to ride out the cycle well'.
'We are cautiously confident that we will get some (new orders),' he said. 'We are in a good position to win some more Brazilian contracts - exactly how much would be speculation.'
Brazilian state oil company Petrobras said in January this year that it had earmarked about US$174.4 billion (S$252.1 billion) for capital outlay over the next four years, including spending on new exploration and production projects.
Mr Choo also said that the group was not expecting any further order-book cancellations right now, and that its focus was on ensuring that its existing orders would be executed well, on time and within budget.
Keppel is proposing an interim dividend of 15 cents a share, up from 14 cents in the previous year.
The $1.47 billion sale of SPC to PetroChina and Keppel Land's rights issue raised a total of $1.8 billion for the group. The funds will 'give us good room to seize value-creation opportunities', said Mr Choo.
For the first half, profit rose 7.4 per cent to a record $603 million, excluding $422.2 million in exceptional gains, up from $561 million in the previous corresponding period. Revenue rose 27.3 per cent to $6.2 billion.
The revenue growth was driven mainly by the offshore and marine division, which enjoyed stronger earnings and improved margins on its order book.
For the second quarter, earnings per share rose to 46.4 cents, up from 18.8 cents a year earlier.
Net asset value per ordinary share had risen to $3.45 as of June 30 from $2.89 as of Dec 31 last year.
'Recovery looks to be in sight, although many believe things may get worse before getting better,' Mr Choo noted.
'What is clear is that the path to a full and sustained recovery will be challenging,' he said.
Key figures at a glance
Search Property News
