The company was supported by improved earnings from infrastructure and investments, but its offshore business continues to face very challenging conditions. During the first quarter of 2017, the company reported 28.4% yoy revenues decrease to 895 million USD, but the net profit rose to 186.2 million USD. The results were seriously pushed up by a three-fold jump in Keppel Infrastructure’s net profit for the quarter, which amounted to 21.5 million USD.
“This is due to, among other factors, the oversupply of rigs and support vessels. It will take some time before the industry fully recovers”, said the CEO of Keppel Offshore and Marine, Loh Chin Hua. “The recovery in oil prices have yet to translate into greater oil exploration and production activities, which will help to shore up demand for rigs and support vessels”, added he.
The revenue of the company from the Offshore and Marine Division, which builds offshore drilling rigs and support vessels, decreased by 240 million USD to 345 million USD, due to a decline in work volumes. The pre-tax earning of the Offshore and Marine Division slumped by 99% to 1 million USD, recording a net order book of 2.5 billion USD, excluding orders from one of its biggest customers, rig leaser Sete Brasil Participacoes SA, which filed for bankruptcy protection last year amid a corruption scandal.
The property division, which has lumpy quarterly contributions, posted decrease of 48% yoy in revenue to 188 million USD with lower revenue from China and Singapore.
During the reported period, the company succeeded to reduce workforce by 1,2500 employees (6%), compared to previous quarter. According to Keppel Offshore and Marine, its headcount has now reached an appropriate level for the amount of work it has in its yards, although it wouldn’t rule out further job cuts saying it would continue to monitor market conditions and explore ways to achieve further cost savings.