Speaking at Keppel’s annual results briefing ceo Loh Chin Hua, said: “We are also cutting our yard capacity and have mothballed two overseas yards. In Singapore, we are in the process of closing three yards.”
YY Chow ceo of Keppel Offshore & Marine stressed that mothballed overseas yards and the three in Singapore were “supporting facilities”. The overseas yards are Bintan Offshore in Indonesia and a yard in Brazil. Which facilities were being closed in Singapore was not disclosed.
“The primary yards remain very much intact,” said Chow.
“What we are going through is a very long harsh winter. We will have to take some strong action in terms of capacity,” Loh said.
Keppel reduced its direct work force by 2,620 employees in the fourth quarter a cut of 11.8%. For 2016 as a whole Keppel reduced its direct workforce by 10,600, some 3,800, and about 6,800 overseas, or 35% of its total direct workforce. The number of sub-contractors in Singapore has also been reduced by 3,300.
“The painful but necessary measures to rightsize our O&M division must continue,” Loh stated.
Keppel also took SGD277m in impairments for fixed assets, stocks & work-in-progress and investments in its offshore and marine division.
Until the collapse in the oil offshore and marine was the biggest contributor to Keppel group profit. However, in 2016 as results of the impairments net profit from offshore and marine fell by 94% to SGD29m compared to SGD482m in the previous year. The business accounted for just 4% of Keppel’s group net profit of SGD784m.
Before impairments Keppel Offshore & Marine’s operating profit was SGD412m.
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