Seatrium' s net order book at $21.3 billion as of March.

Seatrium has achieved a net order book of $21.3 billion as at March 31, comprising 26 projects with deliveries extending to 2031.

 

Projects relating to renewables and green and or cleaner solutions amounted to $7.1 billion of the orders, says Seatrium in its 1QFY2025 business update on May 29, where no earnings nor revenue numbers were provided.

 

This time last year, Seatrium' s net order book as at March 31 2024 was $25.8 billion.

 

In this most recent quarter, Seatrium delivered One Guyana, its fourth floating production storage and offloading (FPSO) project for Guyanese waters.

 

Topsides fabrication and integration works are underway for two other FPSOs bound for Guyana, namely FPSO Errea Wittu and FPSO Jaguar.

 

" Commissioning works are progressing well for FPSO P-78, the first of six newbuild FPSOs for Petrobras, set to depart for Brazil later this year," says Seatrium, adding that it has commenced integration work for FPSO P-80, another Petrobras order.

Seatrium says it " continues to see a stable order pipeline for oil and gas projects, driven by an increased focus on energy security and strong energy demand."

 

In addition, Seatrium has signed a memorandum of understanding with UK' s bp for a second floating production unit, Tiber, for the Gulf of America.

 

It has also secured a contract for the supply of equipment and license for a LeTourneau Super 116E Class jack-up rig.

 

The US offshore wind market faces " uncertainties" but Seatrium sees opportunities in other regions, including Europe and Asia Pacific.

 

In January 2025, Seatrium was awarded a contract to carry out the engineering, procurement and construction (EPC) work of a 5,000-ton heavy lift vessel for Penta-Ocean Construction (POC), marking Seatrium&rsquo s maiden entry into the Japanese offshore wind market.

 

Elsewhere within the offshore wind segment, Seatrium completed the strike steel for IJmuiden Ver Gamma, the second of three 2GW offshore converter platforms for TenneT.

 

Offshore commissioning works are underway for the Revolution Wind offshore substations, with a unit slated for completion by June this year.

 

In the quarter, Seatrium completed 45 repairs & upgrades projects, including six cruise ship retrofits, naval vessels and LNG carriers, as well as the world&rsquo s first full-scale

turnkey carbon capture and storage (CCS) retrofit for Solvang ASA&rsquo s ethylene carrier Clipper Eris.
 

< Results Analysis> 1Q25 business update looks on track

• 1Q25 revenue estimated to be c.SGD2.3bn, at 23% of FY25 revenue projection, seems broadly in line considering 1Q is typically seasonally lower 
• Orderbook moderated slightly to SGD21.3bn YTD orders amounted to ~SGD860mn based on our estimate
• Active enquiries level though investment decisions might be held back due to global tariff and economic uncertainty
• Re-rating catalysts to come from sizeable order wins and margin recovery maintain BUY and TP SGD3

 

1Q25 seems on track.  Based on orderbook drawdown, we estimate that  revenue to be c. SGD2.3bn in 1Q25, seems broadly in line with projection of ~SGD2.5bn revenue / quarter considering 1Q is typically seasonally lower and take comfort that management guided project execution and revenue recognition in right direction.  Orderbook moderated to SGD21.3bn  as of end Mar-2025, from SGD23.2bn as of end 2024 with slower  new order wins of c.SGD860mn YTD  (c.10% of FY25 order assumption of SGD8bn). YTD wins consist of Heavy Lift Vessel for Penta-Ocean Construction (~SGD670mn), the supply of equipment and license for a LeTourneau Super 116E Class jack-up rig (~SGD70mn) and FSRU conversion (~SGD120mn) based on our estimates. Nevertheless, the healthy order backlog provides good revenue visibility for the next three years. Of which, c.33% are renewables and cleaner/green solutions.  Commissioning works are progressing well for FPSO P-78, the first of six newbuild FPSOs for Petrobras, set to depart for Brazil in Jun. Management  does not foresee any major execution hiccups  for projects on hand though some rescheduling for instance US Empire wind project (a month-long stop work order lifted on May 19). 

 

Re-rating catalysts: order wins and margin expansion.  Order flow seems slower YTD given the unfavourable market environment. Seatrium continues to see  active enquiries for both O& G and renewable projects  (especially in Europe and Asia), though current macro uncertainties might  delay investment decisions  by customers. Amongst the major project pipeline, the MOU signed with  BP for second FPU &ndash Tiber  in Feb-2025, which estimated to worth ~SGD1.2bn, could potentially be finalised in 2025. Petrobras&rsquo tender for  P-86 FPSO, which was launched in Oct, has been postponed twice with submission now expected by Nov-2025 instead of the first deadline of Apr-2025, citing high market costs. Hence contract award will only take place in 2026 at the earliest. Management stresses the benefits of such series-built FPSOs which enhance cost competitiveness and risk management for both shipyard and customer.    US tariff impact is immaterial  for Seatrium at this point. With regards to investment opportunities into US shipyard in view of Trump&rsquo s push to revitalise US shipbuilding, Seatrium&rsquo s strategy  team  requires more datapoints to evaluate the potential production volume and availability/capability of workforce in US  before any investment commitments. Besides order wins,  margin trend in upcoming 1H25 results  is also keenly watch to restore confidence on earnings recovery. Core gross margin was rather disappointing in 2H24, which saw significant contraction to 3-4% from 7-8% in 1H24. We expect gross margin to trend back up to ~7% in 2025, driving net profit recovery to SGD350-400mn.  Maintain BUY and TP SGD3  (1.5 P/B).