UOB Kay Hian
Date of Report: Friday, 1 August 2025

Seatrium Posts Robust 1H25 Results: Revenue Soars, Margins Expand, and Orderbook Strengthens

Overview: Continued Growth and Strategic Positioning

Seatrium, a leading integrated shipyard specializing in engineering solutions for the offshore oil & gas and renewables sectors, has delivered a standout performance in 1H25. The company, which merged with Keppel Offshore Marine in early 2023, reported strong revenue growth, notable margin expansion, and a fortified balance sheet.
Share Price: S$2.27
Target Price: S$2.96 (30.1% upside)
Market Cap: S$7,686 million (US$5,930 million)
Sector: Industrials
Major Shareholder: Temasek Holdings (35.87%)
FY25 NAV/Share: S$1.93
FY25 Net Debt/Share: S$0.00

1H25 Financial Highlights: Revenue Jumps, Margins Improve

Seatrium’s financial performance in 1H25 demonstrates its operational strength and effective project execution.

Key Drivers: Orderbook Strength, Strategic Investments, and Margin Expansion

– Orderbook: S\$18.6 billion as of 1H25, with 25 projects scheduled for delivery through 2031. Notably, 34% (S\$6.3 billion) is anchored in renewables and cleaner energy. – Pipeline: S\$30 billion near-term pipeline spanning oil & gas, offshore wind, and maritime solutions. – Gross Margin: Rose to 7.4% in 1H25, significantly above the previous year and exceeding full-year estimates. – Strategic Focus: Early-stage investments in carbon capture, ammonia bunkering, and clean energy solutions, positioning Seatrium for long-term growth in the global energy transition. – Balance Sheet: Gross debt reduced by 10% to S\$2.4 billion. Debt costs declined from 4.9% in 1H24 to 4.4% in 1H25. Over S\$3.5 billion maintained in cash and undrawn facilities. Net debt/equity at 0.12x, reflecting strong operational flexibility.

Segment Analysis: Order Wins and Repairs & Upgrades

– Order Wins: Seatrium’s order wins have shown strong momentum, with new contracts secured across traditional oil & gas, renewables, and maritime upgrades. – Repairs & Upgrades (R&U): In 1H25, delivered 101 projects, including a Floating Storage Regasification Unit (FSRU) conversion, 15 LNG carriers, two carbon capture and storage (CCS) retrofits, and various cruise, yacht, offshore, and naval vessel works. – R&U revenue declined 19% YoY to S\$418 million due to trade uncertainties and weakness in the LNG carrier market. – Focus remains on higher-value work, evidenced by new FSRU conversion contracts and a Letter of Intent for fleet-wide CCS retrofits.

Financial Outlook: Multi-Year Visibility and Growth Trajectory

Orderbook Pipeline: S$30 billion in near-term opportunities, with management focused on converting prospects into secured contracts.
Revenue Visibility: Orderbook provides multi-year confidence, with projects scheduled through 2031.
Renewables Focus: 34% of the orderbook is now aligned with renewables and cleaner energy, underlining Seatrium’s strategic positioning for the global energy transition.

Valuation, Risks, and Catalysts

– Valuation: Target price maintained at S\$2.96, based on a Price-to-Book (P/B) multiple of 1.5x (1.5 standard deviations above the five-year average), reflecting Seatrium’s global competitiveness, revenue visibility, and order win potential. – Risks: No changes to earnings estimates. Net margin compression is considered immaterial due to non-operating income fluctuations. – Balance Sheet: Strong cash position, low net debt/equity, and reduced debt costs enhance operational resilience. – Regulatory: The completion of the MAS/CAD investigation brings closure, with no material financial impact expected in 2025.

Key Share Price Catalysts

• New orders for rigs, offshore renewable installations, or major fabrication projects
• Repairs and upgrades for cruise ships and commercial vessels
• Potential regulatory changes in the US, increasing demand for upgrades of US-built assets and benefiting Seatrium’s US yards

Conclusion: Seatrium Well-Positioned for Long-Term Growth

Seatrium’s 1H25 results highlight its strong execution, expanding margins, and robust orderbook that ensures multi-year revenue visibility. The company’s proactive investments in decarbonisation, renewables, and emerging maritime solutions underscore its commitment to capturing growth in the global energy transition. With a solid balance sheet, disciplined cost management, and a focus on high-value projects, Seatrium stands out as a compelling investment opportunity in the offshore and marine sector.

Appendix: Key Metrics and Financial Ratios

Seatrium’s solid financial performance, strategic market positioning, and ambitious growth initiatives make it a noteworthy stock for investors seeking exposure to the evolving offshore and renewables industry.