Keppel struggles with lacklustre order wins on back of massive oil price rout

It clinched $5.1b worth of contracts in FY14.

Keppel’s order wins missed analyst expectations in 2014. The offshore and marine giant’s total order book stood at $5.1b in FY14, missing OSK DMG’s $6b forecast by 15%.

OSK DMG notes that the firm’s lacklustre order flow is likely due to the oil price slump. However, Keppel’s order flow outlook should improve as prices seem to have stabilized.

“Keppel still has c.SGD4.4bn worth of options, ie three quarters of our SGD6bn/year order win forecast, to be exercised in FY15, comprising 13 jack-up rigs and one floating liquefied natural gas (FLNG) vessel. We believe the probabilities of exercise for the six Mexican rigs, two Gulf rigs and the FLNG vessel – totaling SGD2.6bn – are especially high,” stated OSK DMG.

Keppel closed 2014 by winning two contracts totalling $1.1b. It clinched a $940m FLNG conversion deal from repeat customer Golar LNG, along with a contact for a a large land rig in the US for worth over US$100m.

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