Sembcorp Marine ((SG:5E2)) has held its Q4 earnings call. Read on for the main highlights of the call.
Seatrium’s latest earnings call for FY 2024 was imbued with optimism, highlighting substantial achievements such as record revenue growth, a return to profitability, and a substantial order book. Despite these positive developments, the company acknowledged ongoing challenges, particularly with U.S. projects and provisions affecting margins. Overall, Seatrium’s strategic direction and operational successes contribute to a positive outlook for the future.
Record Revenue Growth
Seatrium experienced a remarkable rise in revenue, reaching $9.2 billion for FY 2024, a 27% increase compared to the previous year. This growth was primarily driven by the execution of a larger order book and higher value-added activities, showcasing the company’s ability to capitalize on market opportunities effectively.
Return to Profitability
In a significant turnaround, Seatrium reported a full-year profitability with an underlying net profit of $200 million, a stark contrast to the previous year’s net loss of $28 million. This achievement underscores the company’s successful strategic and operational initiatives.
Strong Order Book
Seatrium’s robust performance is further evidenced by its net order book, which surged to $23.2 billion, marking a 43% increase from the prior period. This growth was fueled by $15.2 billion worth of new orders, solidifying the company’s market position.
Operational Excellence
The company delivered seven significant projects, including Singapore’s first newbuild LNG bunker vessel, and completed 231 repair and upgrade projects. These operational milestones highlight Seatrium’s commitment to excellence and innovation in its service offerings.
ESG and Environmental Initiatives
Seatrium made strides in its environmental efforts, achieving a 30% reduction in Scope 1 and 2 emissions and obtaining ISO 37001 anti-bribery certification. These initiatives reflect the company’s dedication to sustainability and ethical practices.
Challenging U.S. Projects
Despite the successes, Seatrium faced continued challenges with U.S. projects, which included incremental provisions associated with these undertakings. Addressing these issues remains a priority for the company.
Provisions Impacting Margins
The company reported additional provisions amounting to $43 million in the second half, which affected its gross margins. These provisions were primarily linked to challenging projects, underscoring areas that require attention.
Forward-Looking Guidance
Looking forward, Seatrium projects continued growth with a revenue increase of 27% to $9.2 billion and an underlying EBITDA growth of 23% year-on-year to $771 million. The record order book of $23.2 billion is expected to support future performance, along with the Board’s proposed dividend of $0.015 per share. The company plans to achieve its 2028 EBITDA and ROE targets by leveraging a diversified portfolio and maintaining a focus on operational excellence.
In conclusion, Seatrium’s earnings call painted a positive picture, with notable achievements in revenue growth, profitability, and order book expansion. Despite the challenges with U.S. projects and provisions affecting margins, the company’s strategic initiatives and operational successes foster a promising outlook for the future.