Seatrium - UOB Kay Hian 2023-10-12: Enthusiasm Unabated – Outlook Remains Bright In 2024

• Seatrium’s outlook in 2024 remains bright, in our view, as we expect new order wins in both the oil & gas as well as renewables sectors. In the near term, this could come in the form of two Brazilian FPSOs while in the medium to longer term, renewables demand remains well supported.
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Positive outlook – Stay invested.

• Seatrium (SGX:S51) presented an upbeat outlook on the offshore marine and renewables industry to nearly 40 institutional investors at the UOB Kay Hian Asian Gems conference earlier this week.
• While new rig orders may be 1-2 years away, Seatrium will continue to focus on a return to profitability, safe and on-time execution of its current S$19.7b orderbook as well as to fill up the gap in its orderbook pipeline for 2026-29.

Strategic review to be completed by end-23.

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• the inevitable consolidation of its global network of yards,
• the company’s ideal capital structure going forwards,
• potential consolidation of its shares (which appears to be a 2024 event in our view), and
• target orderbook mix between renewables and oil & gas projects.
• In addition, the strategic review will also look at what sort of investments the company will need to make in the areas of digitisation, robotics and artificial intelligence, which will partially address the issue of a chronic labour shortage that has affected many industries globally.

Update on Brazilian FPSOs.

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Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-10-12 SGinvestors.io

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