Seatrium - CGSI Research 2024-03-15: Can It Achieve Its Targets Before FY28?

• We believe Seatrium will be able to achieve its target S$1bn EBITDA in FY26F, two years ahead of its scheduled target date of FY28F.

Setting financial targets for the first time

• - Read this at SGinvestors.io -
• ROE of at least 8%;
• net debt/EBITDA of 2-3x;
• revenue of S$10bn-12bn;
• S$300m in annualised synergies and cost savings (to be achieved by end-FY25F);
• S$200m in procurement savings achieved, with the merger boosting project margins.

Equal cost savings via standardised pricing, SG&A, depreciation

• Seatrium expects its S$300m cost optimisation target to be equally shared (~S$100m each) between
  1. - Read this at SGinvestors.io -
  2. reduction in corporate SG&A by the removal of duplication processes; and
  3. depreciation from asset rationalisation or yard closures.
• Seatrium expects the cost savings to be fully reflected from FY26F.

Can Seatrium achieve EBITDA of at least S$1bn before FY28F?

• Read more at SGinvestors.io.

LIM Siew Khee CGS International Research | https://itrade.cgsi.com.sg 2024-03-15 SGinvestors.io

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