Billion Dollar Club: ENERGY

Seatrium marks its debut in the awards with multiple wins in the energy industry category this year. The company was named overall sector winner, and was recognised too for weighted ROE (return on equity) and returns to shareholders.

Seatrium, as a listed company in its present form, is relatively new. It was thus named only from 2023. However, it can trace its parentage back 60 years to two industry leaders: Sembcorp Marine, and also the offshore and marine unit of Keppel, itself an amalgamation of numerous of yards and operating companies in the broader offshore and marine sector. Besides the traditional oil and gas ecosystem, Seatrium is winning a growing piece of the pie from the renewable energy industry as well, as it can provide sustainable solutions to advance the global energy transition and maritime decarbonisation. 

Under the One Seatrium Global Delivery Model, the group’s operations are closely coordinated across different yards worldwide, supported by centralised engineering and integrated technology resources. Its 14 yards and 20 dry docks are in not just Singapore but also Brazil, China, India, Indonesia, Japan, Malaysia, the Philippines, Norway, Saudi Arabia, the United Arab Emirates, the UK and the US. “The integration of our assets and workforce onto an efficient operating platform enables Seatrium to be a global player with end-to-end delivery capability in key continents. By effectively scaling our operations and harnessing our geographic advantage, the group is well-positioned to deliver increasingly complex products and solutions to our customers,” says chairman Mark Gainsborough in the company’s FY2024 annual report.

See also: A rejuvenated Singapore market, a reset for The Edge Singapore

mute
Gainsborough calls FY2024 a “pivotal year” for the company, as Seatrium embarks on its journey as a newly formed company. “Despite macroeconomic uncertainties, robust economic growth in emerging economies has bolstered global energy demand. The world also saw continued commitment to achieving net zero, which drove demand for renewable energy and a greater focus on maritime decarbonisation,” he says, adding that the company ended the year with its order book at a decade-high of more than $23 billion, with significant orders from repeat customers such as Petrobras.

Besides winning over new orders, the company has streamlined its operational footprint, de-risked its balance sheet and improved liquidity. “We are now laser-focused on the areas in which we will pursue growth, both strategically and opportunistically, and have established strategic enablers to achieve our goals,” says Gainsborough.

For the year, revenue reached $9.2 billion and ebitda almost tripled to $627 million while earnings came in at $157 million, a big turnaround from red ink of more than $2 billion in the preceding year. The company paid a dividend of 1.5 cents per share — its first such payout since 2017, as the industry was sliding into a multi-year downturn which capsized numerous offshore and marine stocks. The company, having turned the corner, has set for itself bigger, higher targets: by 2028, it aims to achieve an ebitda of more than $1 billion and from a FY2024 ROE of 2.5%, it aims to reach more than 8% in this metric.