As Empire Wind 1 was scheduled to commence operations in 2027 (before the suspension), the pair think that the WTIV will likely be chartered from 2026 till 2027. They foresee that cash flows from charter agreements could be lumpy in nature.
Lim and Kande estimate the vessel to generate US$16 million to US$30 million depending on usage, under the assumptions of a US$300,000 day rate and 30% ebitda margin. As such, they project Seatrium to earn around US$9 million in annual interest income over FY2026 and FY2027 from the loan extended to the buyer, Phoenix II, an affiliate of Maersk Offshore Wind. The analysts also assume a “lower” 4% interest rate for the loan that should be similar to the 4.4% financing cost for Seatrium’s borrowings.
The duo also suggest that Seatrium need not make “major” provisions as the vessel is nearly completed with a definite delivery date. They write that revenue from the vessel construction has been recognised in Seatrium’s financials under a percentage-of-completion method.
On the back of new project wins such as BalWin5 and FPU Tiber, as well as estimates of higher margins for these projects, Lim and Kande expect Seatrium’s earnings to strengthen from 2025 to 2027. CGSI value Seatrium at 1.3 times of 2026 forecasted P/B, giving a 10% discount to the counter’s historical P/B of 1.5 times.
See also: Citi maintains ‘buy’ for Seatrium after dispute resolution with Maersk
At around 11.05 am on Dec 24, Seatrium’s shares are trading flat at $2.13.
