SINGAPORE - Keppel Corporation warned on Friday morning (July 24) that its second-quarter and half-year results to be released next week will be "significantly and adversely impacted" by recognition of material impairments, relating mainly to its offshore and marine (O&M) business.
Keppel said its profit guidance followed a review it carried out on the assumptions used to assess the carrying values of certain assets of the group, including the recoverability of contract assets, receivable balances and stocks under work-in-progress in relation to the O&M business, as well as investments in associated companies.
The review was carried out in light of the Covid-19 pandemic which has severely impacted the global economy and brought about significant market volatility and uncertainty, including a sharp reduction in global demand for oil and in oil prices.
Amidst the highly volatile environment and low oil prices, oil majors are curtailing exploration and production spending, which has adversely impacted day-rates and utilization rates of the O&M industry generally and the group's O&M business more specifically," Keppel said.
The group will release its unaudited consolidated financial results for the second quarter and half-year on July 30.
Keppel Corp shares closed up two cents or 0.3 per cent at $5.95 on Thursday.