Keppel O&M reported a 1% drop net profit to SGD930m ($728.5m) for 2013, and accounted for a 66% total of parent Keppel Corp’s 2013 net profit. Keppel O&M’s revenues in 2013 fell 11% on the previous year to SGD7.13bn.
Keppel Corp acting cfo Paul Tan noted that while many new jobs had started at Keppel O&M’s yards in 2013 they had not yet reached the revenue recognition phase which accounted for the drop in annual revenues.
Last year Keppel delivered a record 22 rig newbuildings worldwide, won SGD7bn in new orders and has a net orderbook SGD14.2bn with deliveries through to 2019.
Keppel senior executives also highlighted the potential of its new joint venture in Mexico with state oil and gas firm Pemex. “We are quite excited by the opportunity in Mexico given the liberalisation there. Initially we will focus on jack-ups, but also see opportunities for deeper draught semi-submersibles and FPSO repairs,” said Loh Chin Hua, ceo of Keppel Corp,
Loh took up the helm at the start of the year from offshore and marine veteran Choo Chiau Beng, who has retired.
However, despite strong results many of the questions raised by investors and analysts were about competitive pressures as China overtakes Singapore as the world’s largest builder in the offshore marine segment, and Korean yards also look to cover the shortfall in ship newbuilding orders.
Outgoing Keppel O&M ceo Tong Chong Heong quizzed on available slots for jack-up rig new orders said they had deliveries into 2016, but depending “on how much you are willing to pay” slots were available at earlier dates.
On the issue of Chinese yards offer highly preferential payment terms of 5% or less upfront and the remainder on delivery, Tong said: “We have heard the
Chinese offering those kind of payment terms, and we hope not to and try not to.” However, he did say they were offering 20/80 payment terms, whereas in the past Keppel has offered progressive payment terms.
“The top line is important…. Its not just about winning orders, but winning orders where we can make money,” group ceo Loh said.
After several years trying to break into the drillship newbuilding market Keppel recently announced plans to speculatively build a drillship to its own “Can Do” design. Tong said they were not marketing the design “that urgently” at the moment waiting for a year or so when there would be demand for a near completed newbuilding.
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