This week, two of Singapore’s blue-chip companies could learn that it doesn’t pay to expand too far afield.
Keppel Corp., the world’s largest builder of oil rigs, could post its lowest annual profit in seven years when it reports earnings Thursday, according to analyst estimates. That same day, shareholders of key customer Sete Brasil Participacoes SA are set to discuss whether it should file for bankruptcy protection after plunging oil prices slammed demand for drilling equipment at the South American company, which is also embroiled in a corruption probe.
The earnings briefing may shed light on the extent of troubles their Brazilian client poses to Keppel and Sembcorp Marine Ltd., the world’s two biggest oil-rig builders, which haven’t been paid by Sete Brasil since November 2014. Analysts are predicting further profit declines this year for both companies, which have US$10.5 billion ($15.1 billion) worth of orders for semi-submersibles and drill ships from Sete Brasil at risk of being cancelled, according to a Jan 7 report from Nomura Holdings Inc.
“Brazil is a concern, especially if Sete Brasil goes bust,” said Hugh Young, Singapore-based managing director at Aberdeen Asset Management Plc. “We’re riding this out.” Aberdeen is Keppel’s third-largest shareholder, with 5.79% of its stock, according to data compiled by Bloomberg.
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Keppel Corp., the world’s largest builder of oil rigs, could post its lowest annual profit in seven years when it reports earnings Thursday, according to analyst estimates. That same day, shareholders of key customer Sete Brasil Participacoes SA are set to discuss whether it should file for bankruptcy protection after plunging oil prices slammed demand for drilling equipment at the South American company, which is also embroiled in a corruption probe.
The earnings briefing may shed light on the extent of troubles their Brazilian client poses to Keppel and Sembcorp Marine Ltd., the world’s two biggest oil-rig builders, which haven’t been paid by Sete Brasil since November 2014. Analysts are predicting further profit declines this year for both companies, which have US$10.5 billion ($15.1 billion) worth of orders for semi-submersibles and drill ships from Sete Brasil at risk of being cancelled, according to a Jan 7 report from Nomura Holdings Inc.
“Brazil is a concern, especially if Sete Brasil goes bust,” said Hugh Young, Singapore-based managing director at Aberdeen Asset Management Plc. “We’re riding this out.” Aberdeen is Keppel’s third-largest shareholder, with 5.79% of its stock, according to data compiled by Bloomberg.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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