Singapore-based rig builder Keppel Offshore & Marine saw profits fall for last year along with revenues. It also revealed work had slowed on rigs being built for Sete Brasil with the Brazilian company not making payments in over a year.
Keppel’s profit was S$481 million for the full year., down 54% from S$1,040 a year ago. For the quarter O&M business recorded a net loss of $61 million.
It posted a net loss of $42.54 million for Q4 2015, down from a net profit of $200.18 million in the previous year, with the decline attributed to lower volume of work and deferment of some projects.
Keppel Corporation has halted work on its projects for Sete Brasil and made a provision of about $230 million for the possible write-offs, said chief executive Loh Chin Hua.
Sete Brasil, the conglomerate's Brazilian client, is facing a bankruptcy threat as the collapse in oil prices - now down to less than US$30 a barrel - hurt demand for its drilling equipment.
Keppel O&M delivered seven of the 15 jackups planned for 2015 as eight were deferred into the first half of 2016, comprising five for Grupo R as well as one each for Parden Holdings, FTS Derricks and Perforadora Central. The company also delivered its first jackup of the year to Gulf Drilling International early Thursday.
“We had taken steps to mitigate our exposure by slowing the construction of Sete’s rigs after payments from our customer ceased over a year ago,” Loh said.