Keppel Corp 2Q Net Up 9.3%; Secures Record Rig Orders

SINGAPORE (Dow Jones)–Keppel Corp. Ltd. (BN4.SG) Thursday reported better-than-expected growth in second-quarter net profit after profit contributions from the Singapore conglomerate’s offshore & marine and infrastructure divisions rose, and flagged a positive outlook after it won record orders for oil rigs.

Net profit rose 9.3% from a year earlier to S$384.9 million for the three months ended June 30, compared with a restated S$352.3 million a year ago. The earnings at the world’s biggest offshore rig builder by volume were higher than the average forecast of S$350.8 million net profit in a Dow Jones Newswires poll of five analysts.

Revenue for the quarter was S$2.29 billion, down 3.7% from S$2.38 billion a year earlier due to lower revenue from the offshore & marine and property divisions, Keppel said in a statement to the Singapore Exchange.

Keppel also announced an interim dividend of 17 Singapore cents a share, higher than 14.5 Singapore cents it paid in the same period of last year.

The company said its offshore & marine Division has secured a record S$7.4 billion of new orders so far this year. The surge in orders has led to a healthy net order book which stands at S$9.1 billion with deliveries extending into 2014.

Keppel is likely to benefit from the new orders over the next two to three years as the rigs are built. Analysts expect the company to get more orders in the rest of the year as current global crude oil prices remain supportive of investments in exploration and production.

“As more oil fields move towards the development phase, we will also ready ourselves to meet the expected growing demand for floating production storage and offloading” vessels, Chief Executive Choo Chiau Beng was quoted as saying in the statement.

Contribution from the offshore & marine unit, which contributes nearly 70% of profits, rose 7% to S$259 million while that from the infrastructure division rose more than three folds to S$34 million in the second quarter.

However, net profit contribution from the property business, which makes up for 15% of the total, fell 38% to S$59 million, Keppel said.

-By Gaurav Raghuvanshi; Dow Jones Newswires