Keppel Corp., the world’s largest oil-rig maker, said second-quarter profit increased by 9%, beating estimates, as higher crude prices stoked demand for drilling equipment.
Net income climbed to $384.9 million from a restated $352.2 million a year earlier, the company said in a statement to the Singapore stock exchange today. That exceeded the $341.5 million average of four analysts’ estimates compiled by Bloomberg. Sales fell 4% to $2.3 billion.
Net income climbed to $384.9 million from a restated $352.2 million a year earlier, the company said in a statement to the Singapore stock exchange today. That exceeded the $341.5 million average of four analysts’ estimates compiled by Bloomberg. Sales fell 4% to $2.3 billion.
Keppel has won $7.4 billion in new orders so far this year, surpassing the tally for all of last year, as energy companies boost spending on offshore and deepwater drilling equipment to benefit from oil prices approaching $100 a barrel. Royal Dutch Shell Plc said March 15 it plans to spend $100 billion on projects through 2014.
“The global demand for oil is projected to continue rising,” Keppel Chief Executive Officer Choo Chiau Beng said in Singapore. “As more oil fields move toward development phase, we will also ready ourselves to meet the expected growing demand” for floating production units.
17-CENT DIVIDEND
Keppel rose 0.2% to close at $10.82 in Singapore trading before the earnings announcement. The stock has climbed 5.1% this year, compared with the 30-member Straits Times Index’s 1.6% decline.
New orders this year boosted the company’s net orderbook to S$9.1 billion as of June, with deliveries stretching into 2014, according to the statement. The price of oil has risen almost 30% in the past 12 months in New York trading.
The company said it will pay an interim dividend of 17 cents.
Keppel’s offshore arm, which makes products including jackup rigs and deepwater equipment, reported a 7% increase in second-quarter profit to $259 million, while sales fell 7% to S$1.32 billion. Operating profit gained 14% to $320 million.
Keppel’s property unit, Keppel Land, yesterday said second-quarter net income dropped 65% to $50.5 million after accounting standards changed. Sales fell 67% to $104.2 million. Keppel also has a utilities arm.
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