SINGAPORE: Singaporean conglomerate Keppel Corp posted a 21% drop in its quarterly profit and warned it did not expect a speedy recovery in the offshore and marine market.
The conglomerate and its smaller cross-town rival Sembcorp Marine have been hit by an oversupply of offshore oil drilling rigs, with customers delaying contracts and refraining from placing new orders with oil prices expected to stay lower for longer.
“Despite some pick-up in activity in the offshore market, the general consensus is that, with the prevailing uncertainty in the oil market, and oversupply in the jack-up market, a quick recovery is unlikely,” said CEO Loh Chin Hua.
Keppel – which got most of its earnings from its property division in the quarter – reported a net profit of S$161mil for the three months ended June, versus S$205mil a year ago.
Revenue from the offshore and marine (O&M) division, that builds offshore drilling rigs and support vessels, fell 38% to S$449mil due to a drop in work volumes.
Keppel has outlined the liquefied natural gas (LNG) market as a focus area as it tries to boost O&M returns. — Bloomberg