Keppel Q1 Profit Jumps Despite Slip in Offshore and Marine Division

SINGAPORE, April 19 (Reuters) – Singapore’s Keppel Corp first quarter profit rose to its highest level in nine quarters, helped by a divestment gain and contributions from property trading in Singapore and China.

Keppel, whose businesses range from rig-building to property development, said on Thursday net profit was S$337 million ($257 million) for the quarter ended March, versus S$252 million a year ago.

It was Keppel’s best profit since the quarter ended December 2015 and came after it posted a net loss in the last quarter of the 2017 fiscal year, its first such loss in 14 years.

Earnings included a divestment gain of S$289 million from the sale of its stake in a Chinese marina development.

Total revenue for the company, in which Singapore state investor Temasek is the biggest shareholder, rose 18 percent to S$1.47 billion.

Revenue at the company’s property division doubled to S$543 million. The company, however, said property transaction volumes in China were expected to be subdued this year on the back of government-imposed cooling measures.

Revenue from its offshore and marine division, which builds offshore drilling rigs and support vessels, fell 31 percent to S$332 million. Still, orders have been slowly picking up after slumping for two years on lower oil prices and an oversupply of rigs.

Keppel said its order book stood at S$4.3 billion at end-March versus S$3.9 billion at end-2017, excluding orders from Sete Brasil Participacoes SA, a Brazilian client that filed for bankruptcy protection.

Deals signed during the quarter included one with Awilco Drilling for a mid-water harsh environment rig worth $425 million, which is due for completion in 2021.

Keppel was seeing increasing confidence in its offshore and marine business, underpinned by rising oil prices, Chief Executive Loh Chin Hua said.

“While there are pockets of opportunities in niche markets, it may take some time before we can see sustained recovery across the board,” Loh said, adding the offshore and marine business was considering an expansion into renewable energy.

Smaller competitor Sembcorp Marine reports its results next week.

($1 = 1.3095 Singapore dollars) (Reporting by Aradhana Aravindan; Editing by Himani Sarkar and Biju Dwarakanath)

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