Seatrium - CGS-CIMB Research 2023-11-08: Order Wins To Drive Turnaround In FY24F

• Seatrium (SGX:S51)’s orderbook fell to S$17.7bn at end-3Q23 from S$19.7bn at end-1H23. Orderbook (OB) comprises of 33 projects with delivery schedules up to 2030.
• 73 vessels underwent repairs and upgrades (RU) in 3Q23. Apart from work on energy transition-driven project upgrades, Seatrium highlighted active RU enquiries for jackups, with even some preliminary enquiries for newbuild jackups.

No new order wins during 3Q23…

• - Read this at SGinvestors.io -
• Seatrium's net gearing ratio improved to 0.15x at end-3Q23 vs 0.17x as of end-1H23. Management plans to use the S$968m receivables prepaid by Borr Drilling for technology investments.
• - Read this at SGinvestors.io -
• We continue to expect FY23F order wins of ~S$7.1bn.

…but key projects are in the pipeline.

• As noted on 28 Aug 2023, Seatrium was awarded a letter of intent (LOI) by Shell for construction work on its Sparta floating production unit (FPU), which we expect to be worth ~S$300m-400m. Seatrium is awaiting a final investment decision (FID) from project partners Shell and Equinor.
• Management also noted that the bid for Petrobras’s P-84/85 FPSOs is still undergoing technical clarification, with the next step being price negotiation (Seatrium is likely to win 1 order here, according to Upstream).
• It is also actively engaging with TenneT for its next round of German projects for 2024.

Offshore wind exposure

• Read more at SGinvestors.io.

LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-08 SGinvestors.io

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