Keppel Corp: Awarded a US$684m conversion contract by Golar LNG, after the latter exercised the second of two options granted back in Sep '14.
The is the third project won by Keppel for the conversion of a Moss-type LNG carrier into a Golar Floating Liquefaction facility. Construction is expected to commence in 2016 with completion within 31 months.
Maybank-KE notes that the contract prices have been trending down, with the first contract valued at US$735m, second at US$705 (-4.1%) and the latest one coming in 6.9% lower than the initial order.
This could perhaps be due to execution efficiency for series units and the stronger USD, which rose 9.4% against SGD over the last 11 months, as well as the weak offshore market.
The new order will bring Keppel's year-to-date order win to $1.5b against house forecast of $2.9b for the full year (FY14: $5.5b).
Bloomberg consensus has 10 Buy, 11 Hold and 3 Sell ratings for the counter, with average 12-month TP of $8.79.
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