Keppel Corp

Keppel Corp: CS has a 2Q13 results preview (announcing on 18 Jul after-market), anticipates a record jackup delivery to drive recovery in O&M margins and expects 2Q13 net profit of $420m (represents 27% of consensus FY13 net profit of $1.56b). CS maintain OUTPERFORM rating on Keppel Corp with TP of $13.70. CS expect a q/q improvement in the O&M margin to above 15% in 2Q13 from 14.1% in 1Q13, driven by an acceleration in rig deliveries. In 2Q13, Keppel delivered 7 out of 20 jackup rigs due in 2013, an increase from the five units delivered in 1Q13. The rigs were delivered ahead of schedule by an average of 19 days, earning a combined bonus of US$2.2m. Keppel Merlimau Cogen could contribute more to infrastructure profit in 2Q13 with the completion of its 400MW expansion in late March. The average electricity pool price was firm in 2Q13, increasing to $185/MWh from $175/MWh in 1Q13, driven by a rise in electricity demand during the haze.