- Seatrium’s 2H24 reported net profit of S$121mil was broadly in line with our and consensus’ estimates. However, results were aided by write-backs.
- Core net profit came in at S$85mil (adjusted for writeback for Keppel (SGX:BN4) indemnity S$82.4mil, offset by Legal and Corporate Claims – S$65mil and tax impact), falling short of our S$125mil estimate.
- - Read this at SGinvestors.io -
Commendable FY24, marking first profitable year since 2017; though 2H24 core profit below.
- Management attributed the higher revenue and lower margins to the initial recognition of several big projects (such as Petrobras FPSOs - P84, P85 as well as Kaskida FPU) which incurred higher initial works and procurement at little profit margin.
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- We also note that it is admirable for new management team to drive the operational integration, ensure smooth project execution and achieve cost synergies as well as interest cost savings.
- We have lowered our FY25-26F earnings forecast for Seatrium by 10-14%, factoring in lower gross margins of 7% and 9% (from 10% and 12% previously) respectively, partially mitigated by 13%/10% increase in revenue projection.
Recovery track intact; robust order pipeline.
- Read more at SGinvestors.io.
