SINGAPORE - Seatrium secured new contract wins of $4.3 billion for the nine-month period till end-September, which took its net order book for the period to $17.7 billion.

Projects related to renewables and green solutions contributed to about 40 per cent of the net order book, said the offshore and marine group on Wednesday in a business update for the third quarter. The order book has 33 projects under execution till 2023.

Seatrium is a product of the combination of Sembcorp Marine and Keppel Offshore and Marine in February 2023.

The group highlighted better operating cash flows for the three quarters, with a lower net gearing ratio of 0.15 times, compared with 0.17 times as at the end of June. Despite operational and financial performance improving, the group noted that it expects to make a net loss for FY2023.

Speaking to reporters and analysts on a call on Wednesday, Seatrium chief executive Chris Ong declined to comment on provisions that the group is expected to book in the second half of 2023, as well as when the company is expected to swing back to profitability.

On the topic of provisions, Mr Ong said the group’s ongoing strategic review means the company is reviewing the “relevance of all (its) assets”.

As for return to profitability, he said Seatrium is the result of a “merger of two big companies that were coming out from the tailwind” of a prolonged downturn.

“We have a lot of challenges around execution, executing the order book well.

“But we are all very focused on looking at (Seatrium’s) Ebitda (earnings before interest, taxes, depreciation and amortisation), including the Ebitda margin, controlling the costs and getting the best operating leverage out of the two groups that have been merged.”

In response to a query on what he reckons is Seatrium’s largest challenge in the near term, Mr Ong said margins, as well as securing new contracts, present challenges for the group.

While he acknowledged that there are enough projects in the pipeline for the group to chase, Seatrium needs to get its cost structure right to “maximise its margin”.

Globally, the environment of high inflation levels and elevated interest rates, along with geopolitical tensions, makes for an uncertain market, Mr Ong said.

He said Seatrium has a good cost database, as well as a database of suppliers and providers with a good track record.

Seatrium’s “milestone payment” system, which gives the group contractual rights to be paid for each milestone it has achieved in each project, also puts the group at an advantage compared with its peers, and buffers it against market volatility and unforeseen circumstances, he added.

In July, Seatrium had reported a deeper net loss of $264.4 million for the half year ended June, mainly due to project costs and merger-related provisions.

Mr Ong said that as part of the group’s capital structure review, the management is looking at a “number of options”, including a share consolidation.

“We’re actively looking at how we can consolidate our shares,” he said. As for when this would happen, Mr Ong stressed that there are “many factors” at play and the group will need to garner shareholder approval.

“We will have to time it, and we don’t have a view on that right now. But suffice to say we are looking at it.”

Shares of Seatrium closed down 3.5 per cent at 10.9 cents on Wednesday. THE BUSINESS TIMES