Hit by the deep downturn in offshore markets Keppel Offshore & Marine (Keppel O&M) reported a SGD1m net profit for the first nine months of 2017 compared to an SGD167m profit for the same period a year earlier. Revenues for the nine month period fell 36% to SGD1.31bn in 2017 compared to SGD2.05bn a year earlier.
In his quarterly address Keppel ceo Loh Chin Hua sounded a note of cautious optimism for th group's offshore and marine business. “There appears to be growing optimism on a nascent recovery in the offshore market, fuelled by the momentum in mergers and acquisitions, as well as recent secondary rig transactions.
“However, with continuing low utilisation rates and a large supply overhang in the jack-up market, it will take time before we can expect to see orders for newbuild jack-ups.”
Keppel O&M has drastically reduced its workforce from the start of 2015 from over 36,000 to 16,000 today.
“Keppel O&M will continue its efforts to optimise operations and manage costs tightly even as it builds new capabilities and expands into new markets,” Loh said.
Keppel is focusing on other markets including production assets, Jones Act vessels in the US, LNG-related solutions, and ventures with other parts of the Keppel group such as floating data centres.
The shipyard group has bagged SGD1bn in new orders this year taking its net orderbook to SGD3.9bn. New orders include a $400m in LNG-powered containership newbuilds with Pasha Hawaii for the Jones Act trades and an FPSO conversion for SBM Offshore.
Beyond Keppel O&M on its own an investment by Keppel Data Centres in US-based Nautilus Technologies presents opportunities of new markets related to the capabilities of the shipyard unit.
“Through the investment, we can also explore opportunities for collaboration and harnessing of synergies within the Keppel Group, for example, by tapping the group's capabilities and experience in the offshore and marine sector for the development of floating water-cooled data centres,” Loh said.