Seatrium - OCBC Investment 2024-02-27: Focus On Delivering Improved Financial Performance In FY24

• Seatrium (SGX:S51) reported a three-fold increase in revenue from S$1.9b in FY22 to S$7.3b in FY23. This was largely attributed to its strong project execution, as the group successfully delivered 13 key projects in FY23 and 2024 year-to-date.
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• Meanwhile, underlying EBITDA surged 456% from S$113m in FY22 to S$628m in FY23.

FY23 net loss of S$1.9b underpinned by kitchen sinking of S$2b

• Overall net loss widened from S$261m in FY22 to S$1.9b in FY23, largely due to non-cash write-downs (mainly related to yard and yard assets), which amounted to S$1.4b.
• On top of that, Seatrium also recorded S$0.6b worth of provisions for onerous contracts, legal and corporate claims, and merger expenses.
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FY24 could be a better year

• FY24 could be a better year as Seatrium ramps up on projects, given its healthy net order book and a positive industry outlook
• With the successful completion of the group’s integration and strategic review, Seatrium’s focus will be on improving financial performance in FY24 through quality, safety, and timely project deliveries.
• Seatrium has achieved strong order wins of S$4.5b in FY23 and year-to-date in 2024, including two 2-gigawatt HVDC Offshore Converter Platforms from TenneT and Sparta Floating Production Unit (FPU) from Shell; as well as a Favoured Customer Contract (FCC) with TMS Cardiff Gas for the refit of 17 liquefied natural gas (LNG) carriers in Singapore.
• Seatrium’s net order book stood at S$16.2b as at 31 Dec 2023, comprising ~39% renewables and cleaner/green solutions, and management is positive on the outlook for the offshore & marine (O&M) industry.

~S$182.4m settlement payment in relation to Operation Car Wash

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-02-27 SGinvestors.io

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