Check out why Keppel is getting closer to sealing 30% of 2013 sales target

It's eyeing a $1b jack-up deal.

According to CIMB, it expects Keppel to announce some contracts from Grupo R, a Mexican conglomerate soon.

Citing a report from Rigzone, CIMB said Keppel FELS has secured four new jack-up rig orders worth US$210m each from Grupo R. Together with the S$600m contracts recently announced, the Grupo R contract will bring YTD orders to S$1.8bn, significantly higher than YTD orders of S$150m a year ago.

Here's more:

This will bring 2013 new orders to S$1.8bn or 29% of our S$5.5bn target.

From our recent meetings with Keppel and some HK investors, we gleaned that the margins for the four jack-ups delivered YTD are “pretty good”.

We think that O&M EBIT margin could reach 14.5% in FY13, trumping management’s 10-12% target due to backloaded profits from these deliveries. We retain our Outperform call and RNAV-based target price. Catalysts include margin surprises and stronger orders.

Management expects to see more Brazilian orders, especially given the delays from peers. Japanese shipbuilder IHI is said to be in talks to buy 30% of the troubled Brazilian yard, Estaleiro Atlantico Sul (EAS).

Although the Japanese could impart some technical skills, we think that the changes in stakeholders could further delay EAS’s delivery schedule.

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