Project deferments in the wake of falling oil prices and continued weakness in the offshore and marine business sent earnings tumbling at Keppel Corporation in the first quarter.
Net profit came in at $210.6 million for the quarter to March 31, down 41.5 per cent from the $360.2 million in the same period last year.
Revenue sank 38.1 per cent to $1.74 billion as contributions from the property division partially offset lower sales in the offshore and marine, infrastructure and investment segments.
Chief executive Loh Chin Hua told a tele-briefing yesterday that its customers, Clearwater and BOT Lease, have pushed the deliveries of two jack-up rigs to next year, while an unnamed client has put off the delivery for two semi-submersibles from 2017 to 2019/2020.
These are in addition to project deferments by Transocean and Ensco announced earlier this year.
AT A GLANCE
NET PROFIT: $210.6 million (-41.5%)
REVENUE: $1.74 billion (-38.1%)
"The contracts are still valid, and we are working towards delivering them based on the new schedules agreed upon with our customers," said Mr Loh.
Earnings per share was 11.6 cents, down 41.4 per cent from the 19.8 cents previously, while net asset value per share stood at $6.22 as at the end of the quarter, up 1.5 per cent from the $6.13 as at Dec 31.
On the upside, Keppel has not made any new provisions apart from the $230 million announced in January relating to projects for Brazilian client Sete Brasil, on which all work has been halted.
Mr Loh said Brazil "continues to be mired in economic and political challenges" and reiterated the group's stance of not resuming construction until payment restarts.
Meanwhile, the offshore and marine division secured $200 million of new orders as at March 31, and its net order book stands at $8.6 billion.
Mr Loh said Keppel's multi-business strategy continued to keep the group "in good stead to perform creditably". Its property business, for instance, reaped a 67 per cent surge in net profit to $100 million even as earnings for the offshore and marine division sank 53 per cent to $95 million.
He said: "There continues to be engines of growth, especially in Asia, arising from continuing urbanisation.
"This will create demand for high-quality homes and offices, clean urban environments, good infrastructure... areas where Keppel has strong core competencies."
Keppel's property division sold about 940 homes during the quarter, mostly in China, up on the 720 homes in the same period last year.
The group is on track with the restructuring of its asset management business, which will be completed by the second half of this year, added Mr Loh.
Keppel shares closed 12 cents or 2 per cent down at $6 yesterday, before the results were announced.