Seatrium has bought back shares for the second time following the completion of the merger between Sembcorp Marine and Keppel' s offshore and marine unit.

 

On Aug 4, the company paid 13.4 cents each for 20 million shares. This follows its first buyback nearly two months ago on June 12, when it paid 12.4 cents to buy 1.2 million shares.

 

Seatrium' s buybacks are in contrast to the steady sale of its shares by Keppel Corp of late.

 

The most recent was on July 28, Keppel sold 50 million shares at 14.52 cents each, lowering its stake to 2.1496% from 3.37% previously.

 

As part of the merger, completed earlier this year, Keppel Corp ended up holding around 5% of Seatrium shares.

 

On July 28, Seatrium reported a loss of $264.4 million for its 1HFY2023 ended June 30, a level higher than some analysts' expectations, no thanks to higher costs incurred for certain projects plus merger-related expenses.

 

The company has guided that it will end the current FY2023 in the red as well, as it focuses on delivering orders worth some $19.7 billion.

On Jul 28, Temasek reduced its deemed substantial shareholding of Seatrium below the 38 per cent threshold. The disposal of 50 million Seatrium shares at S$0.145 per share reduced Temasek&rsquo s deemed interest in Seatrium from 38.02 per cent to 37.95 per cent. This followed Temasek reducing its deemed substantial shareholding in Seatrium below the 39 per cent threshold on Jun 5, and below the 40 per cent threshold on May 2.

 

Seatrium and Keppel were the STI&rsquo s two strongest-performing constituents in July. As of Aug 3, Seatrium and Keppel maintained respective Refinitiv consensus target prices of S$0.178 and S$7.97, respectively, while ranking as the sixth and 11th-most traded stocks in Singapore by trading turnover so far this year. Refinitiv consensus estimates represents the average of individual estimates provided by analysts covering the company, and estimates typically represent an analyst&rsquo s opinion of the company&rsquo s performance over the next 18 months.

 

Formerly Sembcorp Marine and renamed as Seatrium following its merger with Keppel Offshore & Marine, Seatrium&rsquo s key business divisions include oil and gas newbuilds and conversions, renewables and new energies, specialised shipbuilding, and repairs and upgrades, with a growing focus on sustainable solutions to advance the global energy transition and maritime decarbonisation. Seatrium maintains that amid the ongoing energy transition and heightened concerns for energy security, the industry outlook for oil and gas, offshore renewables and other green solutions continues to improve and strengthen.

 

Seatrium&rsquo s strong order wins of S$4.3 billion in H1 FY23 (ended Jun 30) were mainly from the renewables space. Seatrium&rsquo s net order book stands at S$19.7 billion, of which 40 per cent is from renewables and cleaner/green solutions, with progressive deliveries till 2030. Seatrium reported a net loss of S$264 million in H1 FY23 due to provision for contracts and merger expenses, and expects to make a net loss for FY23.

 

On Jul 27, Keppel reported its highest profit on record in the company&rsquo s 55-year history, which was underpinned by the S$3.3 billion disposal gain from the divestment of the offshore and marine business to Seatrium.

 

Under Vision 2030, Keppel is strategically transforming its business into a global alternative real asset manager, with deep operating capabilities in infrastructure, real estate and connectivity. On its asset monetisation programme, Keppel maintains that since the start of its asset monetisation initiative in October 2020, it has announced more than S$4.8 billion of transactions. These monetised assets have released some S$3.8 billion of cash, which can be used both to seek new opportunities as well as to reward shareholders. Keppel expects the pace of asset monetisation to increase over time as market sentiments improve, and intends to push ahead with its target to monetise S$10 billion to S$12 billion of assets by 2026, and S$17.5 billion eventually.

 

Keppel&rsquo s H1 FY23 (ended Jun 30) revenue of S$3.7 billion was up 11 per cent from H1 FY22, comprised of S$2.5 billion from infrastructure, S$0.5 billion from real estate and S$0.7 billion from connectivity. The infrastructure division runs an integrated power business as well as a decarbonisation and sustainability solutions business. In H1 FY23, Keppel&rsquo s renewable energy portfolio grew to 3 gigawatts (GW), making up over 60 per cent of its total energy portfolio of 4.9 GW, with projects across the spectrum of solar, wind and hydro power. The 4.9 GW portfolio is on a gross basis and includes projects under development with 64 per cent of capacity operational, while 36 per cent is under development. In the real estate division, Keppel is also expanding its sustainable urban renewal offerings across Asia-Pacific.