Keppel Hitachi Zosen Ltd News

Shipbuilder Keppel Hitachi Zosen Ltd. reportedly is in discussions to merge its offshore business with sister company Keppel Fels Energy Infrastructure Ltd., a maker of oil rigs and ships. The activity is presumably spurred by the market reality of increasingly cheaper ship and rig building options available.

Singapore-based ship repairer Keppel Hitachi Zosen Ltd said on Monday it won a contract worth about $161 million to build four cable-laying and repair vessels for TyCom Ltd. The company said in a statement that each of the 7,800 dwt ships would be used for installation and maintenance of the Tycom Global Network, a worldwide undersea fiber optic system being deployed by TyCom. Keppel Hitachi had already been awarded an earlier contract in April for two cable-laying and repair vessels. It said the first two vessels would be delivered in 2001 and the other four through 2002

Keppel Hitachi Zosen Ltd. clinched contracts worth S$60 million. Keppel Hitachi will undertake the construction of a multi-purpose supply vessel for France-based SURF, a member of the maritime branch of the Bourbon Group. It is expected to be delivered in the second quarter of 2002. It will also convert a tanker into a floating production storage and offloading vessel for Nortrans Offshore (S) Pte Ltd, which is expected to be completed in the third quarter of 2001. Keppel Hitachi said it had an order book with a total value of S$614 million.

Shares of Keppel Hitachi Zosen Ltd. and Keppel FELS Energy & Infrastructure Ltd. surged on market talk the two units of the Singapore conglomerate Keppel Corp. would be merged. Ship repair specialist Keppel Hitachi jumped as much as 47 percent to an eight-month high of S$0.575 before moving back to S$0.51, up 12 cents, in moderate trade of 3.7 million shares. KepFELS, which also has a marine business, rose eight cents to S$0.935 after surging as much as 17 percent earlier to S$1.00 -- a level not seen since the middle of March. Volume was high with more than 10 million shares traded. "The rumours are not new. It seems that day traders were riding the wave," said a senior trader at a local brokerage. A Keppel official said she was "not aware of any corporate development".

Singapore, once revered for its seemingly insurmountable edge in the ship repair and conversion business, has fallen on harder times in recent years. The forces which have slowed the area's break-neck pace of expansion and dominance are not at all unfamiliar to shipbuilders and repairers in the U.S. and Europe: rising land and labor costs, corporate consolidations and a seemingly endless stream of cut-rate competitors. According to recent financial reports from the area, though, it appears that Singapore's two ship repair yards, Keppel Hitachi Zosen Ltd. and SembCorp Marine Ltd., have found the balance to reign supreme once again. The companies were expected to report modest profit growth after almost two years of restructuring and consolidation.

Singapore's two ship-repair yards, Keppel Hitachi Zosen Ltd. and SembCorp Marine Ltd., are expected to report modest profit growth after almost two years of restructuring and consolidation. Keppel Hitachi Zosen was expected to turn in profit of about S$33 million for 1999 after a S$65 million loss for the nine months ended December 1998, analysts said. SembCorp Marine, due to release results today (Feb. 14), should post a 10 percent rise in earnings of between S$78 million and S$80 million against 1998 profit of S$71.81 million. Squeezed by rising land and wage costs, Singapore's shipyard industry underwent a consolidation in 1997 and 1998 that saw the city state's main players reduced to two from four.

Keppel Hitachi Zosen Ltd said on Friday that Smedvig Asia intends to exercise its option to purchase the Singapore ship repair specialist's interest in a tender rig for $61.5 million. Keppel Hitachi said in a statement that Smedvig, a unit of Norway's Smedvig ASA, proposed to exercise its option after delivery of the semi-submersible tender rig West Alliance and after commencement of drilling operations.

Keppel Hitachi Zosen Ltd. has reportedly agreed to buy Keppel Marine Industries Ltd.'s shiprepair and building business for $98.9 million in cash. Keppel Hitachi said it would acquire all of Keppel Marine's investments in Keppel Singmarine Dockyard Pte Ltd., Eagle Engineering Pte Ltd., Keppel UAE-Investment Pte Ltd., Keppel Philippines Marine Inc., and Penguin Boat International Ltd.

Singapore's two ship-repair yards, Keppel Hitachi Zosen Ltd. and SembCorp Marine Ltd., are expected to report modest profit growth after almost two years of restructuring and consolidation. Keppel Hitachi Zosen is expected to turn in profit of about $19.5 million for 1999 after a $38.3 million loss for the nine months ended December 1998, analysts said. SembCorp Marine, due to release results next Monday, should post a 10 percent rise in earnings of between $46 million and $47.2 million against 1998 profit of $42.3 million. Squeezed by rising land and wage costs, Singapore's shipyard industry underwent a consolidation in 1997 and 1998 that saw the main players reduced to two from four.