Singapore-based Keppel Corp posted its first year-on-year rise in quarterly profits since early 2015, but Chief Executive Loh Chin Hua warns that the group’s offshore business continues to face “very challenging conditions.”
“It will take some time before the industry fully recovers,” says Loh.
Keppel reported a net profit of S$260 million ($186.17 million) for the first quarter of this year compared to S$211 million a year ago.
The group has been hit by the oversupply of drilling rigs, and revenue from the Offshore & Marine (O&M) Division, which builds drilling rigs and support vessels, decreased by S$335 million to S$483 million.
The prolonged slowdown has resulted in Keppel reducing its global O&M workforce by around 18,000, or about 49 percent, since the start of 2015. The company also stopped operations at two overseas yards and announced plans to close three in Singapore.
Earlier this month, Damen Shipyards Group entered into an agreement with Keppel Offshore & Marine for the acquisition of the Keppel Verolme shipyard in the Rotterdam Botlek area.