Seatrium’s 1H25 revenue jumped 34% y-o-y to S$5.4b, driven by steady execution on projects, especially offshore platforms.
A beat to start the year.
Gross profit more than doubled to S$395m, translating to a gross profit margin (GPM) of 7.4% (FY24: 3.1%). This was a positive surprise as we had previously expected Seatrium to turn in a GPM of 7.4% on a full year basis, with margin expansion improving over the course of the year as legacy projects are delivered.
1H25 Results exceeded expectations.
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Closing the chapter on OperationCarWash.
Seatrium announced in end-Jul that it has signed a leniency agreement with various Brazilian authorities.
Under the terms, Seatrium will make a final settlement payment of BRL728.9b (S$168.4m). Seatrium has also finalised and signed a deferred prosecution agreement (DPA) with the Singapore authorities.
Under the DPA, Seatrium is required to pay a financial penalty of US$110m, though up to US$53m of penalties paid to the Brazilian authorities may be credited against this. Hence, the amount payable under the DPA will be US$57m (S$73.3m).
Seatrium had previously over-provided for these financial penalties, and has therefore reversed the excess S$14m in 1H25.
Separately, the Monetary Authority of Singapore and Commercial Affairs Department have concluded their joint investigations into the company.
We view these developments as a positive that lifts the overhang on Seatrium, and are cautiously optimistic that improving margins and delivery of earnings growth will drive positive momentum of Seatrium's share price going forward.
Net order book of S$18.6b.
Read more at SGinvestors.io.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
