After enduring several years of financial difficulties, Seatrium returns to profit, showing a robust performance in 2024.
The Singapore-based shipbuilding company has announced a net profit of S$157 million (approximately $116 million), representing its first annual profit since 2017.
This positive shift is attributed to a notable improvement in project execution efficiency and a rise in repair and upgrade business activities.
The company’s achievements reflect its capacity to adapt, optimize operations, and secure new contracts, culminating in a decade-high order book totaling S$23.2 billion.
Seatrium’s Noteworthy Financial Recovery
The impressive financial turnaround of Seatrium can be linked to several key factors, including an increase in revenue from S$7.3 billion to S$9.2 billion.
This 27% increase in turnover underscores the company’s enhanced operational efficiency and strategic decision-making.
In stark contrast to a substantial loss of S$2 billion in 2023, the transition to profitability highlights the success of Seatrium’s business restructuring and improved project execution.
A significant element contributing to this turnaround was the successful merger between Keppel Offshore & Marine and SembCorp Marine in 2023.
This long-anticipated integration has facilitated streamlined operations, improved cost efficiencies, and bolstered the company’s competitive position in the industry.
Record-High Order Book and Business Expansion
Seatrium has reached a significant achievement with its order book, which has hit a decade-high of S$23.2 billion.
Of this total, S$7.9 billion is allocated to renewable and green initiatives, underscoring Seatrium’s dedication to sustainable energy solutions. The company is currently overseeing 27 projects slated for completion by 2031, which encompass:
- Floating production storage and offloading (FPSO) systems.
- High-voltage direct current offshore platforms for wind energy projects.
- Advanced offshore engineering solutions, including P-series FPSOs for Petrobras.
- TenneT European 2GW grid projects aimed at supporting offshore wind farms.
This varied project portfolio establishes Seatrium as a pivotal entity in the global energy transition while ensuring a robust presence in the oil and gas industry.
Strengthened Financial Stability
Seatrium’s enhanced management of cash flow and operations has played a crucial role in its recovery. The company has successfully decreased its net debt by 8%, reducing it to S$689 million.
Furthermore, its net leverage ratio has significantly improved from 3.2x to 1.1x. This financial stability has been achieved through strategic asset sales and careful loan repayments, marking a significant milestone as Seatrium returns to profit.
By concentrating on its core business functions and divesting non-essential assets, Seatrium has fortified its balance sheet and positioned itself for sustainable future growth.
This financial prudence will be vital as the company addresses market challenges and seizes new opportunities within the energy sector.
The achievement of profitability underscores Seatrium’s resilience and strategic focus, ensuring it remains competitive in a dynamic industry.
Future Outlook: Leveraging Market Opportunities
In light of the challenges presented by geopolitical instability, Seatrium maintains a positive outlook for its future.
The company is confident that the global shift towards cleaner energy, alongside the increasing demand for energy security, will create substantial market opportunities.
Seatrium has identified key focus areas for the upcoming years:
Oil and Gas: Continuing to leverage its expertise in offshore engineering and the construction of Floating Production Storage and Offloading (FPSO) units.
Renewables: Increasing its participation in offshore wind initiatives and sustainable energy solutions.
Maritime Enhancements: Improving repair and upgrade capabilities to address the changing requirements of the shipping sector.
New Energy Innovations: Investigating advancements in green energy technologies and related infrastructure.
By broadening its service offerings and aligning its business strategy with the changing energy landscape, Seatrium aims to maintain profitability and foster long-term growth.
Expert Editorial Comment
Following several years of financial challenges, Seatrium returns to profit in 2024, demonstrating resilience and adaptability.
With a record-high order book and enhanced financial stability, coupled with a strategic emphasis on growth sectors, the company is well-equipped for future achievements.
As Seatrium continues to strengthen its foothold in oil and gas, renewables, and maritime enhancements, its dedication to innovation and sustainability will be pivotal in determining its long-term direction.
