Singapore Daily Bulletin – 27/02/13

Keppel O&M Inks $200m New Contracts From Repeat Customer
Keppel Offshore & Marine (Keppel O&M), through its subsidiaries – Keppel FELS Brasil S.A. and Keppel Shipyard – have secured two contracts worth $200 million from repeat customers. According to Keppel Corporation, Keppel FELS Brasil’s contract is with MODEC and Toyo Offshore Production Systems (MTOP) to integrate the topside modules of a Floating Production Storage and Offloading (FPSO) unit. This project will be carried out at BrasFELS, Keppel FELS Brasil’s yard in Angra dos Reis, Rio de Janeiro, Brazil. Integration works for the FPSO will take place from the 3Q14 to 3Q15.

Significance: The repeat projects have again affirmed the service quality of Keppel O&M. Notably, BrasFELS and MTOPS’ first FPSO project was delivered safely and 19 days ahead of schedule, while the second project is underway and on track for delivery in 2Q14. Meanwhile, Keppel Shipyard has also collaborated with SBM Offshore on some 17 major conversion and fabrication projects.

STX OSV’s Q4 Earnings Dive 81%
STX OSV Holdings’ earnings for the fourth quarter ended 31 December 2012 fell 80.6 percent to NOK 124 million while revenue fell 18.8 percent to NOK 2.5 billion. The weaker performance was largely due to temporarily lower activity in some yards. Generally, STX OSV’s operations in Norway, Romania and Vietnam remain stable. The operations at the shipyard in Niteroi, however, continue to affect STX OSV’s performance. The firm posted full-year EBITDA margin of 13.2 percent despite challenging conditions during the fourth quarter. In addition, its cash position remained strong, with cash and cash equivalents of NOK 2.4 billion as at 31 December 2012, even after taking into account a total dividend payout of $0.23 per share during the year, as well as increased investments in plant, property and equipment in Romania and for the construction of the new yard in Brazil.

Significance: Notwithstanding 4Q12 orders falling short of expectations, STX OSV’s value of new orders for the quarter was higher than in the preceding quarter. Moving forward, it is of the view that the market for subsea support and construction vessels remained fundamentally robust throughout FY12, and continues to be so, as evidenced by the three OSCVs (offshore subsea construction vessels) contracted so far within the 1Q13.

Petra Foods Swings To Loss in Q4
Petra Foods posted a US$16.7 million loss for the fourth quarter ended 31 December 2012 versus a profit of US$18.4 million last year, in spite of a revenue rise. The weaker performance was mainly due to the challenging operating environment for the to-be divested Cocoa Ingredients division, especially in margin compression, together with a US$27.5 million charge for additional provisions and exceptional charges relating to the planned divestiture of the division. Meanwhile, a final dividend of US$0.0186 per share has been proposed by the firm, lifting total dividend for the year to US$0.0397.

Significance: The proposed divestment of the Cocoa Ingredients business is expected to bring a significant change for Petra Foods. Moving forward, the branded consumer division, which will be Petra Foods’ sole business post asset sale, will continue to perform strongly. Notably, FY12 and 4Q12 revenue for the aforesaid division stood at US$477.7 million (up 13.8 percent year-on-year) and US$120 million (up 18.1 percent year-on-year) respectively.