Singapore's Keppel Corporation reports 44 pct drop in Q4 profit

The net profit of Keppel Corporation, the world's largest oil rig builder, in the fourth quarter fell 44 percent year on year to 404.8 million Singapore dollars (281 million U.S. dollars), the company announced Thursday.

The company's whole year profit in 2015 also registered a five-year low to 1.525 billion Singapore dollars (1.06 billion U.S. dollars), mainly due to plunging oil prices.

In explaining the drop, the company said that since October 2015, the macro environment has taken a turn for the worse. Oil price plunging below 30 U.S. dollars a barrel, its lowest in more than a decade, coupled with the Chinese stock market meltdown this month have hurled the global economy onto a turbulent trajectory. However, the net profit was still above market expectations.

Keppel, the leader of the Singapore private sector consortium for the Sino-Singapore Tianjin Eco-City, said that anxieties over slower growth in China and its stock market volatility have prompted investors to retreat from the country. However, while the Chinese economy faces a number of challenges, Keppel remains confident about opportunities in China.

"Even at a lower GDP growth rate of 6.9 percent, China's absolute growth is still very significant based on a larger 10 trillion U.S. dollars economy, compared with five or 10 years ago," said Loh Chin Hua, chief executive officer of Keppel.

Despite the uneven recovery in economies as well as the challenges ahead, Keppel said it has considerably flexibility in its workforce deployment as well as responses to uncertainties.

"As a conglomerate, with access to capital and the ability to invest when times are tough, we will continue riding on the mega trend of sustainable urbanisation, fully exploiting the group's ability to create good assets, which we can own, manage and then recycle at the right time to earn the best risk-adjusted returns," Loh said. Enditem