Keppel Offshore & Marine has been hard hit by the Covid-19 pandemic, and the sharp fall in the oil price, and reported a first half loss of SGD959m ($694.4m), including SGD890m in impairments for contract assets, doubtful debts, stocks and investment, and including share of impairment provisions for Floatel.
Singapore’s partial lockdown, known as a circuit breaker, in April and May, saw only Keppel O&M’s ship repair business allowed to remain operational.
Much of the shipyard group’s labour from comprising foreign workers staying in dormitories was locked down in Q2 as the Covid-19 outbreak spread through dormitories used by industries such as shipyards and construction in Singapore. This reduced Keppel’s operational workforce to around just 1,200 at the start of the circuit breaker on 7 April, compared to 24,000 in March 2020, Loh Chin Hua, ceo of Keppel Corp, told a Q2 earnings webcast on Thursday.
“Over time, the workforce has risen, but was still only about 5,000 at the start of this week. The reduced manpower has had a significant impact on our operations and topline. Keppel O&M is now working closely with the authorities to ramp up activities safely,” Loh said.
Keppel Shipyard has seen two Covd-19 clusters of infections, one in April and another in June. Keppel’s two worker dormitories remain gazetted as isolation areas by the government, however, Loh said two blocks had been designated as “cleared” and were being used to house recovered workers who had resumed work.
Moving ahead Loh said Keppel was working closely with the authorities to ramp up activities at its yards safely. “We are mindful of the risk of re-infections and have put in place stringent safe management measures in line with guidance from the authorities. We have also put in place plans to segregate the workforce within our yards, so that in the event of any reinfection, as small a group as possible will be affected.”
This includes segregating workers according to projects and at their yards, and staggering working hours and days off.
As of the end June Keppel O&M’s orderbook stood at SGD3.5bn, with SGD107m in new orders signed year-to-date.
“Keppel O&M has a pipeline of projects to keep it busy for at least two years and customers want to see their projects completed,” Loh said
“The performance of Keppel O&M will therefore be impacted by how quickly we can return to work safely and whether there are further infections which may interrupt the safe ramp up and resumption of work.”
Copyright © 2020. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited.