Keppel Corp

Keppel Corp: KEP’s integrated engineering unit, Keppel Seghers is part of a consortium that has been awarded an EPC contract to build a waste-to-energy combined heat and power project in Bialystok, Poland. The plant will have a capacity of 372 tpd, and process ~120tons of waste per yr. The facility will generate ~7.5 MW of electricity during summer, and 17.5 MW of thermal energy in winter. The contract is worth PLN 333m (~$124m) and is awarded by Bialystok’s municipal solid waste mgt co. Construction is expected to start in 1Q13 with the project completion in 2015. KEP will execute 49.6% (by project value) of the work scope and supply its proprietary technology to the facility. The remaining work will be undertaken by consortium partners Budimex, one of Poland’s largest construction companies and Spanish waste mgt co CESPA. News is positive; nevertheless the above contract size is small relative to KEP’s group revenue. Investors will likely continue to focus on the O&M side, which is continues to be the key driver for KEP’s outlook. KEP remains a Street favorite with 22 Buys, 2 Holds and 1 Sell. Consensus TP is $13.18.