Seatrium (SGX:5E2)’s stronger FY25 results materially boost confidence in its post-merger recovery path, with net profit doubling to S$324m on 24% revenue growth to S$11.5bn and gross margin (GPM) expanding from 3.1% to 7.4%, driven by better project mix, higher yard utilisation, productivity gains and series-build efficiencies.
Confidence booster.
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The two US legacy projects are now delivered while the Naphant specialised research vessel (~S$200m contract value) is expected to be delivered in early 2027. Revenue ramp up was also 8% stronger than expected.
On operational improvement trajectory.
Key catalysts from here are continued margin expansion and the conversion of Seatrium’s robust project pipeline into orders, as sustaining the current ~S$11bn revenue run-rate beyond the next 1–2 years will increasingly hinge on fresh wins.
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Meanwhile, non-core asset divestments are expected to deliver over S$50m annualised cost savings by early 2026 and more than S$100m by FY2028, reinforcing a leaner, more focused asset base and enhancing operating leverage which support further upside to returns as the cycle plays out.
Maintain BUY
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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