Keppel Offshore & Marine targets to rake in S$5.4b in 2013

A fat sum from contract wins.

According to Maybank Kim Eng, in an uncertain economic environment, Keppel offers a diversified exposure to O&M, property and infrastructure businesses. i

While the O&M business has been a key pillar for the company, contributions from the property and infrastructure business cannot be ignored. As one of the most
successful conglomerates in Singapore, Keppel offers a level of defensiveness with its diversified business exposure while offering pockets of growth within each business segment. 

Here's more from Maybank Kim Eng:

In 2013, we believe that the O&M business would continue to benefit from another year of robust contract wins, which we expect to be in the range of SGD5.4b for the full year.

The year would also see Keppel’s O&M division recognising revenue and delivering a record number of jackup units, its traditional area of strength. This should give it opportunities to deliver some positive upsides in operating margins, which we believe would be a positive stock price trigger.

Unusual orders open up new opportunities. Keppel has also been securing unusual kinds or sources of offshore orders such as the estimated. USD600m FLNGV conversion project from Golar LNG and the USD1.2b semisubs contract from Naftogaz of Ukraine.

It also is building other rig types such as ice-class and harsh environment rigs. We believe that this would open up opportunities and maintains its competitiveness against established Korean yards and upcoming Chinese yards.

Diversified property portfolio. Keppel’s diversified property portfolio (under Keppel Land) and strong balance sheet is another attractive trait for the group. Our property analyst sees opportunities for capital recycling in 2013, with Marina Bay Financial Centre Tower 3 as a possible candidate which could have a positive stock price impact.