With higher revenue and better margins, Seatrium has increased its FY2025 earnings by 106% y-o-y to $324 million. Revenue was up 24% to $11.5 billion, mainly from its oil and gas and offshore wind projects, such as the ongoing ones for Petrobras and TenneT.
Back in FY2023, when the company was trying to turn around, it reported a net loss of more than $2 billion.
In FY2025, its gross margin improved to 7.4% from 3.1%, due to a better project mix, improved yard utilisation and productivity gains.
The company has improved its ROE to 4.9% in FY2025 from 2.5% a year earlier.
With an improving balance sheet, Seatrium plans to double its FY2025 dividend payout to 3 cents, up from 1.5 cents paid for FY2024.
Also, it wants to renew its share buyback mandate of up to 2% of its shares, and continue with its $100 million buyback programmed introuced in May 2024.
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The company had earlier announced it expects to achieve $50 million in annualised cost savings from hiving off certain yards and other non-core assets. Further divestments are in the pipeline, and Seatrium expects annualised cost savings to reach $100 million by FY2028.
As at Dec 31, its net order book was $17.8 billion, comprising 24 projects and providing revenue visibility through to 2033. As at end of 2024, the order book was $23.2 billion.
About 40% of the net order book are for renewables and cleaner/green solutions, which provides portfolio resilience across energy cycles.
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Seatrium says it is "actively pursuing" $32 billion in pipeline deals over the next 24 months.
Besides oil and gas projects in South America, Middle East and Africa, it is aiming to meet demand for offshore wind jobs in Europe too. US appears to be a less significant market for the company.
As indicated in the company's presentation deck, of this $32 billion, those from North America consist of just over $1 billion but in contrast, the company is aiming for $12 billion worth of projects in South America; $7 billion in Europe, and $8 billion in the Middle East and Africa.
"While oil & gas will continue to be dominant in the near term, momentum is gathering for major offshore wind markets with favourable developments such as the securing of financing and improving cost economics, driven by energy security considerations," says Seatrium.
CEO Chris Ong says the company has delivered a strong set of numbers, validating its transformation efforts to strengthen its fundamentals from which Seatrium will accelerate its growth.
"This strong performance also reaffirms our strategy and sets the trajectory for us to deliver reliably today while positioning boldly for tomorrow," he adds.
"With clear earnings visibility through our strong order book; a robust pipeline of opportunities; optimisation of our cost structure; and continued execution discipline – we are progressing steadily to deliver our FY2028 steady-state targets and drive long-term shareholder returns," says Ong.
Seatrium shares closed at $2.21 on Feb 25, down 1.78%.
