Keppel: 1Q profit down. CEO confident about future jack-up orders

Singapore’s offshore rig builder Keppel Corp, today reported a decrease in its first quarter 2014 net profit.

The company’s net profit was S$339 million, a five percent drop when compared to S$357 million earned in the same period a year ago.

According to Keppel’s 1Q report, this result is in line with 1Q 2013, excluding one-off gains from the reversal of provision from the sale of a power barge and write-back of tax provision made by Keppel Land in 1Q 2013.

In the first quarter, Keppel secured orders to build five jack-up rigs, one FPSO turret, and five specialised vessels. Total value of these orders is estimated to be S$1.9 billion.

Keppel’s net order book stands at a record of S$14.4 billion as at end-March 2014, with visibility into 2019.

The company’s CEO Loh Chin Hua highlighted the fact that by 2015, more than 220 units of the global jack-up rig fleet will be over 30 years old.

“The current market for jack-ups remains tight with utilisation close to 100%. The ongoing bifurcation towards premium assets and the rig-replacement cycle are expected to continue supporting the order momentum. This is evident from the five jack-up orders that we clinched in 1Q 2014 alone,” Loh Chin Hua said.

To remind, Keppel earlier this month delivered one of the world’s largest jack-ups, Maersk Intrepid, the first of three it is building for Maersk.