Keppel pops the champagne on $3.3b worth of new orders

Thanks to strength in order flow.

According to Nomura, Keppel has secured USD 2.7bn (~SGD 3.3bn) worth of new orders in 1H 2013 against our target of SGD 6.5bn for 2013. The strength in new order flow in 2013 YTD has been underpinned by resurgence in orders for JUs. 

Keppel reported an orderbook of SGD 13.1bn at the time of 1Q13 results. 

Here's more from Nomura:

Including today’s order, most of the newbuilds under construction or on order at Keppel have been based on proprietary designs. Therefore we expect strong margins on these contracts, given better understanding of rig complexity and minimisation of any re-work. 

Keppel FELS, a wholly owned subsidiary of Keppel Corp, has secured a USD 210mn contract from PV Drilling (subsidiary of PetroVietnam) for construction of a jack-up (JU) newbuild. This is Keppel’s eighth JU order this year and along with Sembcorp Marine, Singapore-based offshore yards have secured a total of 15 JU new orders YTD.

In addition, the rigs being based on proprietary designs implies stronger margins for the yards, in our view, given higher efficiencies and better understanding of rig design.