Seatrium Limited’s Earnings Call Highlights Robust Growth

Seatrium Limited ((SG:5E2)) has held its Q2 earnings call. Read on for the main highlights of the call.

Seatrium Limited’s recent earnings call painted a picture of strong financial performance and strategic successes, despite some challenges. The company reported robust revenue and profit growth, driven by strategic wins in key markets. However, it also faced hurdles such as settlement costs from past legal issues, foreign exchange losses, and a higher tax rate. Despite these setbacks, the positive momentum in their order book and overall financial health suggests a promising future.

Significant Revenue Growth

Seatrium reported a remarkable 34% increase in revenue, reaching $5.4 billion for the first half of 2025, compared to $4 billion in the same period last year. This substantial growth underscores the company’s successful strategies in expanding its market reach and capitalizing on emerging opportunities.

Remarkable Increase in Net Profit

The company achieved an impressive 301% increase in net profit, rising to $144 million from $36 million a year ago. This significant profit growth reflects Seatrium’s effective cost management and strategic focus on high-margin projects.

Improved Gross Margin

Seatrium’s gross margin widened significantly by 370 basis points to 7.4% for the period. This improvement was driven by a favorable mix of higher-margin projects, cost savings, and better asset utilization.

Strong Order Book

The company’s net order book stood at $18.6 billion, with $6.3 billion anchored in renewables and cleaner energy solutions. This robust order book highlights Seatrium’s strategic shift towards energy transition and its commitment to sustainable growth.

Strategic Wins in Offshore Wind and Oil & Gas

Seatrium marked its entry into Japan’s offshore wind market and secured multiple FPSO and FSRU projects. These strategic wins demonstrate the company’s ability to penetrate new markets and expand its project portfolio.

Deleveraging and Financial Health

The company improved its net debt to EBITDA ratio to 1x from 2.9x, showcasing strengthened financial discipline. With a strong liquidity position of over $3.5 billion in cash and undrawn facilities, Seatrium is well-positioned for future growth.

Settlement Costs for Operation Car Wash

Seatrium signed a leniency agreement involving a settlement payment of approximately BRL 729 million and a USD 110 million penalty in Singapore. This settlement addresses past legal issues and allows the company to focus on future opportunities.

Foreign Exchange Losses

The company faced foreign exchange losses due to a weaker U.S. dollar, which impacted operational income. This challenge highlights the volatility of currency markets and its effects on international operations.

Higher Effective Tax Rate

Seatrium’s effective tax rate was elevated at 28%, driven by operations in higher-tax jurisdictions like Brazil. This higher tax rate is a challenge that the company needs to manage as it expands its global footprint.

Challenges in Repair and Upgrade Segment

The company completed 101 repairs and upgrades, slightly lower than 133 in the first half of 2024, due to trade-related uncertainties and LNG market weakness. This segment’s performance reflects the broader challenges in the global trade environment.

Forward-Looking Guidance

Seatrium’s forward-looking guidance is optimistic, with a 34% year-over-year increase in revenue and a 301% rise in net profit. The company is actively pursuing a robust pipeline of $30 billion in near-term opportunities, driven by strong demand in the oil and gas and offshore wind markets. The guidance emphasized operational excellence, strategic project execution, and sustainable, long-term growth.

In conclusion, Seatrium Limited’s earnings call highlighted a strong financial performance and strategic wins, despite facing some challenges. The company’s robust revenue and profit growth, coupled with a strong order book and strategic market entries, paint a promising outlook. As Seatrium continues to navigate its challenges and capitalize on opportunities, it remains well-positioned for sustainable growth in the future.