Keppel's Q4 throws up questions over its O&M provisions

Singapore

SHARES in Keppel Corporation bucked the market trend on Friday even after the conglomerate posted its first-ever quarterly loss on the back of S$619 million in graft fines and related costs.

Clearly investors have priced in the hefty fines that unit Keppel Offshore and Marine (KOM) agreed to pay over its Brazil graft payments.

But what of the group's offshore and marine (O&M) contract provisions?

In its fourth quarter financial results announced last Thursday, Keppel Corp booked another S$81 million provision for losses made on its Sete Brasil rig-building projects. That is on top of a S$230 million provision it last extended to these projects in Q4 FY15.

Almost six years after Sete Brasil awarded US$10 billion worth of contracts to KOM and Sembcorp Marine (SembMarine), the other Singapore O&M heavyweight, the delivery of these rigs is still contingent on the progress of Sete Brasil's o…