Keppel Corp., the world’s largest oil-rig maker, said fourth-quarter profit climbed 30% as higher sales at a property unit offset slumping demand for rigs.

Net income climbed to $343 million from $263 million a year earlier, the company said today in a statement to the Singapore stock exchange. Keppel also proposed distributing 50.5% of K-Green Trust to existing shareholders as dividend prior to listing the unit.

Keppel’s property arm boosted profit 88% in the quarter on demand for residential projects in Singapore and overseas. Earnings at the company’s offshore business, which accounted for 71% of total profit, dropped as the global recession sapped investment in oil exploration.

“The long-term prospects remain good, with global oil demand expected to continue to rise,” Choo Chiau Beng, Keppel’s chief executive officer, said at a briefing today. “While it is unlikely that we will see a return to the high volume of new build rig orders of the last four to five years, there continues to be a healthy level of enquiries for our products and solutions.”

Keppel dropped 1.6% to $8.09 on the Singapore exchange today before the earnings announcement. The stock rose 97% in the past year, outperforming a 63% advance for the 30-member Straits Times Index.

Sales Fall
The company’s sales dropped 19% from a year earlier to $3.03 billion in the fourth quarter.

Fourth-quarter profit at Keppel’s offshore unit dropped 9% to $201 million and sales fell 41% to $1.77 billion. Operating profit dropped 12% to $245 million. Still, its margin widened to 14% from 9.3% a year earlier because of improved efficiency from building a series of rigs, Choo said.

The property unit had a profit of $77 million in the fourth quarter while revenue more than doubled to $599 million, according to the statement.

Keppel will distribute 326 million units of K-Green Trust, valued at about $379 million, or $1.16 per unit. Shareholders will get one unit for every five Keppel shares held, meaning the distribution value is about 23 cents per share. The company aims to list the trust by the second quarter, it said.

Keppel said it will keep 49.5% of K-Green units for at least 12 months after the date of admission to the exchange.

Offshore Opportunities
Keppel is looking for opportunities to increase capacity at its yards in Brazil and around Mexico as oil companies are exploring and producing in new fields, Choo said. The company is looking at possibilities in the offshore wind business, he added, without elaborating.

Oil and gas producers around the world cut spending by about 15% to US$395 billion ($555 billion) last year, according to a Dec 16 estimate by Barclays Capital in New York. Spending should rise 11% to US$439 billion this year, Barclays said.

Crude oil prices in New York plunged to a low of US$32.40 in December 2008 from a high of US$147.27 in July the same year. Prices have climbed 63% in the past year.

Petroleo Brasileiro SA Chief Executive Officer Jose Sergio Gabrielli said Oct 7 that the company would take bids that month to build seven drill ships to be used in deep waters. Final submissions for the bids are expected by March, Tong Chong Heong, chief executive officer of Keppel’s offshore and marine unit, said in October.

Petrobras, as Brazil’s state-controlled oil company is also called, is spending US$174.4 billion through 2013 to boost production by more than 50% and develop offshore fields such as Tupi, the largest discovery in the Western Hemisphere since Mexico’s Cantarell.

BP Plc, the largest oil and natural gas producer in the US, in September said it made a discovery in the Tiber Prospect in the US Gulf of Mexico after drilling the world’s deepest exploration well.

Keppel Land, the property unit, said yesterday fourth-quarter profit rose 56% to $106.9 million.