Singapore’s Keppel Corp (KPLM.SI), the world’s largest oil rig builder, posted a better-than-expected 9.3% rise in second-quarter net profit as margins from its offshore and marine business came in better than expected.
Keppel and rival Sembcorp Marine (SCMN.SI), the world’s number two rig builder, have enjoyed a strong rebound in rig-building orders as energy firms step up exploration amid high oil prices.
“The premium in day rates for high-spec jackups has continued to drive its order momentum. Our offshore and marine business secured $7.2 billion of new orders in the first half of the year, a record level for a half year,” Chief Executive Officer Choo Chiau Beng told a media briefing.
Keppel’s net orderbook as at end-June was $9.1 billion with deliveries stretching into 2014.
The strong new orders come after a massive slowdown in the past two years as a result of the global economic crisis.
“The (offshore and marine) division sees good prospects for its deepwater solutions with the projected increase in deepwater capital expenditure over the next few years,” Keppel said in a statement.
The firm, around 20% owned by Singapore state investor Temasek (TEM.UL), recorded net profit of $384.9 million in the quarter ended June, up from a restated $352.3 million a year earlier.
The profit beat the average forecast of $334 million by analysts polled by Reuters.
Keppel’s earnings from property fell 38% to $59 million during the quarter, hurt in part by changes in accounting rules that led property arm Keppel Land (KLAN.SI) to report a 65% decline in quarterly profit.
Keppel shares have risen by more than 5% since the start of the year, outperforming rival Sembcorp Marine which has lost about 0.4%. The broader Singapore market <.FTSTI> has fallen about 1.6% this year.
JPMorgan is one of the firms that is bullish on Keppel, noting the firm’s customers had options for nearly US$3 billion ($3.65 billion) worth of rigs that had not yet been exercised.
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