UPDATE 1-Singapore's Keppel Corp Q1 profit up as property earnings share grows
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SINGAPORE, April 16 (Reuters) - Singaporean conglomerate Keppel Corporation Ltd said on Thursday its first-quarter net profit rose 6 percent on year, reflecting a bigger share of earnings from its property arm and sale of some equity investments.
The company's pre-tax profit, however, dropped 8 percent on year, due to weak performance across sectors.
Keppel, which has business interest in offshore and marine, property and infrastructure, posted a net profit of S$360 million ($266 million) for the quarter, on revenue of S$2.8 billion, which fell 6 percent from a year earlier.
The offshore and marine arm, which builds offshore drilling rigs and support vessels and contributed 64 percent of Keppel's revenue in 2014, saw its pre-tax profit fall 17 percent due to lower operating revenues and net interest income, Keppel said.
The company has got requests from clients to defer deliveries of eight rigs for about six months, including five rigs for Transocean, said Chow Yew Yuen, chief executive officer of the offshore and marine arm.
Keppel's chief executive officer, Loh Chin Hua, said the company had received payment up to November for the first three of the six semi-submersibles for Sete Brasil, a company tasked with building up Brazil's deep-water rig fleet. Sete Brasil has been involved in a corruption scandal at Brazil's national oil company Petrobras.
Keppel has received 10 percent down payment for the other three rigs, Loh said.
The slump in crude oil prices since mid-2014 has depressed the market for offshore rigs and vessels. Keppel's offshore and marine order book stood at S$11.3 billion at the end of the first quarter, down from S$12.5 billion at the end of 2014.
"While we do not expect low oil prices to last indefinitely, we cannot be certain how long it will take for oil prices to stablise and for E&P (exploration & production) spending to recover," said Loh. ($1 = 1.3538 Singapore dollars) (Reporting by Rujun Shen; Editing by Sunil Nair)
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