Seatrium(US:SMBMY)2024-08-04 14:51Company and Industry Overview * Company: Seatrium Limited (OTCPK: SMBMF) * Industry: Offshore & Marine Engineering, Energy Transition * Focus: Building FPSOs, Offshore Wind Projects, Repairs & Upgrades Key Financial Highlights * Revenue: SGD4.0 billion (39% increase YoY) * Underlying EBITDA: SGD390 million (9x increase YoY) * Underlying Net Profit: SGD115 million (turnaround from SGD264 million loss YoY) * Net Order Book: SGD26.1 billion (10-year high) * Free Cash Outflow: SGD1.0 billion (mainly due to working capital needs) Business Performance * Strong Order Backlog: Secured SGD13 billion in new orders in H1 2024, including FPSOs for Petrobras and TenneT's HVDC Offshore Converter Platform. * Project Execution: Focus on project execution, cost management, and operational efficiency driving profitability. * R&D and Sustainability: Investing in R&D for cleaner and greener solutions, including zero routine flaring and venting technologies. * Repairs & Upgrades: Growing segment contributing to steady baseload revenue. Strategy and Outlook * Long-term Strategy: Leverage industry tailwinds to transform and achieve 2028 financial targets. * Global Delivery Model: Integrating global assets and workforce for efficient operations and scalability. * Sustainability: Commitment to sustainability through the Sustainable Finance Framework and KPIs. * Industry Outlook: Positive outlook for offshore & marine industry, supported by demand in oil & gas and renewables sectors. Key Questions and Answers * Profitability in H2 2024: Management committed to sustaining improved financial performance for the full year. * Billion Dollar Contracts: Healthy order pipeline with potential for more billion-dollar contracts. * Gross Margin: Target mid-teens gross margin levels, driven by project execution and series-building strategy. * Legacy Projects: Majority of legacy projects expected to be completed by end-2024. * Cost Savings: On track to achieve SGD300 million in annual recurring savings by 2025. * Debt Refinancing: Proactive approach to managing cost of capital and working capital requirements. * Share Buyback: Continuing to execute SGD100 million share buyback program. Conclusion Seatrium Limited delivered strong financial results in H1 2024, driven by a robust order book, improved project execution, and focus on sustainability. The company is well-positioned for future growth and profitability, supported by its global delivery model and commitment to the energy transition.