Keppel's infrastructure segment draws impressive 75% surge in profits

It amounted to $65m.

According to Barclays, strong performance from rig-building business continues. Keppel Corp’s offshore & marine segment delivered yet another quarter of sector-leading operating margins for 1Q13.

Despite adjusted net profit of S$331mn falling 56% y/y, the decline in net profits was largely expected following a lumpy recognition from its property segment in 1Q12.

Here's more from Barclays:

We believe the company’s ability to yet again deliver a sector leading margin, despite the competitive headwinds faced by the industry, underlines its operational strength and strong outlook.

Keppel’s management confirmed that it has made the initial recognition for Sete Brasil’s first semi-submersible. Despite the likely conservative recognition of margin, operating margins for the rig-building segment increased to 14.1% from 13.5% in 4Q12.

This was attributable to the early delivery of five KFELS B Class jackups (repeat designs), and upgrade and conversion work completed in the quarter.

The company’s infrastructure segment delivered an operating profit of S$65mn, up 75% y/y and reversing the loss made in 4Q12. With the Doha (Phase 1) and Greater Manchester projects expected to be completed by 2013 and with the Keppel Cogen power plant expected to add another 800MW of capacity by mid-2013, we expect the profitability of this segment to improve in 2013.

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