Keppel's Profit Boosted by Offshore Unit

Keppel Corporation Ltd , the world's largest builder of jackup rigs, reported on Thursday a 17 percent increase in its second-quarter net profit, propelled by gains at its core offshore and marine business.

Net profit for the quarter was S$406 million ($328 million), the company said in a statement. It said its first-half profit was S$744.7 million, slightly short of half the full-year mean forecast of S$1.572 billion made by 24 analysts, according to Thomson Reuters data.

Keppel said the net profit at the offshore and marine segment was 14 percent higher from the same year-ago period.

The unit, which contributed more than half of the company's 2013 revenue, took in S$3.2 billion worth of new orders in the first half of the year, raising the company's total outstanding order book to S$14.1 billion.

"Amidst concerns of capital expenditure cutbacks and softening day rates particularly in the ultra deepwater sector, we continue to experience good enquiries for jackups and semisubmersibles in addition to other offshore vessels in our suite of proprietary offerings," said Loh Chin Hua, chief executive officer of the company, in the statement.

Keppel Corp has been taking on more complex and higher value-added projects to fend off competition, mainly from the Chinese yards, which have been quickly catching up in building rigs in the past few years, backed by generous support from the government and the financial sector.

China has overtaken Singapore as the biggest jackup rig builder in the world, with 73 outstanding orders, while Singapore has 44, according to IHS data. Keppel holds 30 of them.

Keppel declared an interim cash dividend of 12 Singapore cents per share, compared to a 10 Singapore cent dividend for the corresponding period a year earlier.

($1 = 1.2379 Singapore Dollars)

Copyright Reuters 2014.