Keppel O&M Turns Profitable in 2019

Keppel O&M Turns Profitable in 2019
Thursday, January 23, 2020

Singapore's Keppel Corp. Offshore & Marine division posted a profit for the full year 2019 citing cost cuts and lower impairment costs.

For the full year, Keppel O&M posted a net profit of S$10 million, a significant increase compared to a loss of S$109 in 2018. The management attributed profitability to increased topline, cost management, and lower impairment provisions.

Also, Keppel O&M saw its revenue rise to 49% to $775 million in the fourth quarter of 2019.

Keppel O&M 4Q revenue increased by $225 mainly due to higher revenue recognition from ongoing projects, such as the Awilco semi-submersible drilling rigs and Golar Gimi FLNG.

The company's 4Q net loss narrowed, with Keppel O&M posting a loss of $8 million, versus a loss of $71 million in the fourth quarter a year ago.

Loh Chin Hua, CEO of Keppel Corporation said the O&M division, famous for its offshore rig building, would continue exploring new markets and opportunities.

60% of orders from gas and renewables

"The Division is also actively capturing opportunities in gas solutions, offshore renewables, production assets, specialized vessels, and floating infrastructure, as well as exploring ways to re-purpose its technology in the offshore industry for other uses," the CEO said.

"The O&M industry continues to show signs of recovery. The utilization and day rates for jack-ups continue to improve, but it would take some time for these to translate into new orders, given the continuing oversupply in the market. The outlook for the floater segment is also positive, with activity and demand expected to increase gradually in the next couple of years," He said.

During 2019, Keppel O&M delivered 13 newbuild and conversion projects. In addition, the company started 2020 with the recent delivery of the fifth out of 11 jack-up rigs that the company is building for Borr Drilling.

"In the near-term, we will continue to actively seek opportunities in the oil and gas production market where a number of project FIDs are expected in 2020. We will also pursue projects in the growing offshore renewables sector, as well as niche segments of the specialized vessel market," the CEO said.

He said that Keppel O&M’s diversification strategy has borne fruit, with gas and renewables making up over 60% of new orders in 2019.

"Our net orderbook stood at S$4.4 billion as at end-2019. To manage the increased workload, Keppel O&M hired 2,800 additional direct employees over the course of 2019, more than we had initially anticipated, and we expect to increase our headcount by a further 1,500 in 2020. With Keppel O&M having returned to profitability, our goal for 2020 is to further enhance the performance of our O&M business," the CEO said.

Categories: Vessels Drilling Industry News Asia Rigs Singapore

Related Stories

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

CNOOC Makes Major Oil and Gas Discovery in South China Sea

Valeura Wraps Up Infill Drilling Campaign in Gulf of Thailand

Sapura Energy Nets $720M from Multiple Drilling Services Contracts

McDermott Concludes Work at PTTEP’s Kikeh Gas Field Off Malaysia

Abu Dhabi's NMDC Group Gets $1.1B Subsea Gas Pipeline Job in Taiwan

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

Current News

MODEC, Sumitomo Partner Up for Delivery of Gato do Mato FPSO

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com