Can Keppel really rely on property to save its sinking ship?

More cancellations await its O&M arm.

Keppel Corporation is pinning its hopes on its property segment to salvage earnings as offshore and marine contracts vanish, but analysts are doubtful whether Keppel Land's contributions will be able to make up for the gap left by its O&M segment.

"[Strong China property sales] was insufficient to support the weakness in all three other divisions this quarter," said Yeak Chee Keong, analyst at Maybank Kim Eng.

Yeak added that more cancellations and deferrals await Keppel's O&M arm, which will continue to weigh on earnings in coming quarters.

"New deferrals surface almost every quarter and we believe the headwinds faced in the offshore rig market, pressured by oil prices and ample supply, may lead to more deferrals in 2H16," said Lim Siew Khee, analyst at CIMB.

"Capital recycling/ asset monetisation are crucial, in our view, to speed up growth in property as the group’s net gearing is weighted down by O&M," Lim added.