Keppel Offshore and Marine announced closure of three shipyard in Singapore and laying off 2,650 employees, during the finance statement for Q4 2016. The world’s biggest oil rig builder reported 65% profit drop in last quarter of 2016, due to challenging conditions at the offshore business. The net income of the company fell four times to 101 million USD, while sales dropped by 22%. The company keeps its negative forecast for the growth of the industry, even despite of OPEC decision for cutting oil yields to stimulate growth of oil price.
“We are thus prepared for the challenging conditions in the offshore business to remain for some time”, said the Chief Executive Officer of Keppel Corp, Loh Chin Hua.
At its offshore and marine division, the company reduced its direct workforce by 2,620, or about 11.8%, from the previous quarter, as part of efforts to pare costs by cutting yard capacity and mothballing yards. For the whole of 2016, Keppel Offshore and Marine cut its direct workforce by 10,600 people, or 35%, at its offshore and marine division, with 3,800 in Singapore and 6,800 overseas.
In tandem, it is cutting yard capacity and has mothballed two overseas yards, while in Singapore it is in the process of closing three yards, laying off another 2,650 employees.