1Q12 results wrap ' mainly in line with expectations''

During the recent results season, companies under our sector coverage reported earnings that were mostly in line with our expectations, with the exception of Keppel Corporation and ASL Marine (Left) and Sembcorp Marine, PEC and Rotary Engineering (below). Higher revenue recognition in the O&M segment and lumpy contributions from the property division led to a strong set of results at Keppel, while ASL's better-than-expected results were mainly due to better margins in the shipbuilding segment.

Companies in focus ' STX OSV & Keppel Corp''

STX OSV was on the radar screen for many investors as talks of a potential sale of STX Corp's entire 50.75% stake in the former intensified, given that the parent has been eager to raise cash to strengthen its balance sheet. Meanwhile there are news reports that Italian shipbuilder Fincantieri and private equity firm Carlyle Group are the winning bidders. Keppel was also in focus after it clinched a letter of intent from Sete Brasil to build five semi-submersible rigs worth US$4.12b in total, and we are expecting that a final agreement may be reached in the next few months.