Seatrium Ltd

Ladies and gentlemen, a warm welcome to Citrum's Financial Year 2024 results briefing. I'm Judy from the Investor Relations and Corporate Communications team. Citrum announced its second half and full year results this morning before market opened on the SGX. With me today, I have our Chief Executive Officer, Mr. Chris Ong, and our Chief Financial Officer, Mr. Adrian Tang. We'll kick off today's briefing with the CEO's address, followed by the CFO and a question and answer session. I'll now pass on the mic to Mr Ong.

Thank you, Judy. Good morning and welcome to Citrum Group's full year 2024 results briefing. I'm pleased to have with me Mr Adrian Tang, Chief Financial Officer. 2024 was a fruitful year for Citrum. marked by strong order wins, a decade-high order book, and most importantly, a return to full-year profitability. The progress that we have made is reflective of our collective determination and hard work. But this is just the beginning for us in our transformation journey. As we go through the slides, I will outline how we are building a strong foundation to achieve our long-term targets. In financial year 2024, our revenue grew to $9.2 billion, an increase of 27% year-on-year as we recognized revenue from the execution of our larger order book, and we also saw more higher value activity in repairs and upgrades. Underlying EBITDA improved to $771 million for financial year 2024. Reflecting our increased revenue and discipline approach to cost management, we recorded a turnaround to full-year profitability. Underlying net profit for financial year 2024 was $200 million compared to a net loss of $28 million last year. The Board of Directors has proposed a dividend of $0.15 per share for financial year 2024. We want to thank our shareholders for their patience and continued trust in Citrum. 2024 was a busy year for Citrum as we focused our efforts on operational excellence and strengthening our balance sheet. We delivered seven projects during the year, including Singapore's first new-built membrane-type liquefied natural gas bunker vessel. The repairs and upgrades business segment also saw a strong activity with the group completing 231 projects. We have strengthened our balance sheet, reduced debt, as well as diverse non-core assets, which has freed up resources for reinvesting into enhancing our capabilities. The cash dividend of 1.5 cents per share for financial year 2024, if approved by shareholders at the upcoming AGM, will be paid on 19 May 2025. We will continue to focus on our growth and reinvesting in our capabilities to scale the business. We achieved a strong net order book of $23.2 billion, a 43% increase from $16.2 billion in the previous period, including $15.2 billion worth of new orders secured from both new and and repeat customers. On 13 February 2025, we announced the MOU with BP for Tiber Floating Production Unit, and this will be BP's second project with us, with the first being Cascada FPU. The Tiber FPU contract award is subject to FID, which we are expecting later this year. Our sizable new order wins reflect the continued confidence that our customers have in our strong project execution and operational excellence. In particular, it underscores the success of our series-built franchise, which allow us to achieve operational efficiencies from project repeatability. In the offshore wind space, we are executing a series of three 2GW offshore converter platforms. two wind turbine installation vessels and a heavy lift vessel for installation of larger wind turbine foundation. For our first Jones Act compliant wind turbine installation vessel built in the US, we recently completed the jacking trials and have commenced on fuel specific installation. The vessel is 96% complete and will be delivered this year. In the oil and gas space, our net order book includes six new built FPSOs for Petrobras. Our third and fourth FPUs that leverage the group's proven topside single leaf integration methodology, as well as a number of topside fabrication and integration projects. As we expand our franchise or series built projects, we will continue to enhance productivity reduce construction time and rework, and ultimately improve project margins over time. When Citrum was formed, we reviewed our global operation and established our One Citrum Global Delivery Model. This unique end-to-end model centralizes our global expertise onto a single operating platform, ensuring consistent and efficient delivery of solutions to our customers. To enhance operational excellence, our yachts are supported by engineering and technology centres of excellence internationally. The slide shows the current status of P78 FPSO project for Petrobras at CETRIM's Bernoy Yacht in Singapore. Topside modules fabricated by our yachts in Brazil, China and Singapore are being integrated onto the hull, We expect to deliver this project in a later part of this year. We have also achieved a significant milestone on Beta Offshore Converter Platform for Tenant. After almost 18 months of engineering and procurement work, we celebrated the topside strike steel ceremony in September 2024. This marks the start of construction on the platform. In FY 2024, revenue from the repairs and upgrades grew 7% to $1.1 billion, driven by higher revenue per vessel as compared with FY2023 despite fewer vessels worked on. Maritime decarbonisation and fleet rejuvenation continue to drive demand in this part of our business. We signed and renewed several favoured customer contracts in 2024, bringing our total favored customer contracts to 22 today. These contracts provide us with revenue visibility and enable forward capacity planning. Citrum plays a critical role in greening the maritime industry, which is a key contributor to global carbon emission. We recently completed the world's first onboard carbon capture and storage, retrofit on Clipper Eris for Sovang, the vessel is expected to be able to capture and store up to 70% of its CO2 emissions. We have also secured a second CCS retrofit project from Mitsui OSK Lines, establishing our track record in this growing space. At Citrum, we are advancing the development of new technologies, Our vision is to harness technology to engineer new solutions for offshore, marine and energy industries. We achieved several milestones on this front during the year. One of the exciting developments is developing our own onboard carbon capture system. Our technology company Aragon delivered a CO2 liquefaction unit for capsule technologies in Germany and Sweden. Together, we are also designing the world's first CO2 handling hub for CCB Energy in Norway. In the new energy space, we launched the green-blue ammonia FPSO solution as part of our low-carbon energy solutions. On offshore floating wind, we received in-principle approval from DNV for two of our proprietary designs. About two-thirds of the world's jack-up rig fleet are based on Citrum's designs. Our suite of design offerings enable us to provide solutions in rig design, equipment supply and maintenance. In 2024, we expanded our footprint with a new office in Saudi Arabia and entered into partnerships with ARO Drilling and Coaching Shipyard. We announced yesterday that we have been awarded a contract from International Maritime Industries for the supply of equipment and license for Jacob Rick Kingdom 3. At Citrum, sustainability is at the core of our business. We aim to be a positive force for change as we create long-term value for our stakeholders. On the environment front, about 34% of our net order book comprises of cleaner, green projects. In addition, we achieved a 30% reduction in Scope 1 and 2 greenhouse gas emissions, moving us closer to our goal of a 40% reduction from 2008 levels by 2030. A sustainable and resilient business requires strong corporate governance. We are committed to upholding the highest standards of discipline, ethics and compliance worldwide. Our major operating entities globally achieved the ISO 37001 Anti-Vibrary Management System Certification in 2024. Regarding the joint investigation by... Monetary Authority of Singapore and the Commercial Affairs Department, we are cooperating fully with the relevant authorities and hope to resolve this matter soon. 2024 was a pivoted year for Citrum. As we established our foundations as a newly formed company, today Citrum is a much stronger global player, providing engineering solutions for the offshore marine and energy industries. The need to address energy security while transforming towards cleaner energy globally presents significant market opportunities despite near-term geopolitical volatility. Our focus on oil and gas and renewable solutions as well as maritime upgrades position us favorably to capitalize on the energy market tailwinds. We have set our 2028 EBITDA and ROE targets and have established the pathways to achieving them. Supported by a diversified portfolio and multi-pronged strategy, the group is making good progress towards these targets. Looking into 2025, Citrum will continue to seek profitable growth. With a strong order win momentum in 2024, the group will stay focused on executing its robust order book, which underpins revenue and cash flow visibility over the next few years. I now will hand the time over to Adrian to take you through the financial review. Thank you.

Thank you, Chris, and good morning to all. I will now take you through Citrin's financial results. Citrin's revenue for the full year 24 was $9.2 billion. a 27% increase from $7.3 billion in 2023, due to project execution and higher value work in repairs and upgrades. Underlying EBITDA grew 23% to $771 million for 2024, driven by increased revenue, lower general and administrative costs, and divestment of non-core assets. FY24 underlying figures excludes legal and corporate claims, a different basis from the FY23 underlying figures, which exclude write-downs, provisions for onerous contracts, legal and corporate claims, and merger expenses. We have taken the view that provisions for contracts are part of our ongoing operations and are now included in our 24 underlying figures. In FY24, CETRIM achieved our first full-year profit. Underlying net profit was $200 million, achieving a positive swing from an underlying net loss of $28 million in FY23. Today, CETRIM has a stronger balance sheet. As at end December 24, net current assets stood at $554 million. a significant improvement from 55 million at end 23. In the second half of 24, revenue grew 18% to 5.2 billion from 4.4 billion for second half 23, resulting from steady execution of our larger order book. Second half revenue were mainly from the six FPSO projects for Petrobras, The three 2 gigawatt HVDC offshore converter platform projects for tenant and increased contribution from repairs and upgrades. Second half underlying EBITDA was $381 million. This was generated through higher revenue and lower general and administrative expenses offset by incremental project costs. Underlying net profit for second half 24 more than doubled to $85 million, attributable to lower interest, depreciation and tax expenses from underlying EBITDA. At our investor day in March 24, we announced a target to achieve a recurring $300 million annualized savings through synergies and overhead reductions by end 25. I am pleased to announce that we are on track to achieve this target within the timeframe. We have also identified procurement savings of $200 million from existing projects being executed. Some of these savings have been realized since we first set the target in March 24, and will realize the remaining savings over time. During the year, we strengthened our balance sheet with active loan repayments and refinancing activities, including securing a $400 million green revolving loan facility. As at end-2024, CETRIM's net debt stood at $689 million, a reduction from last year's $747 million. representing an 8% reduction through progressive and active repayment of loans, offset by increased working capital project needs. Citrium's net leverage ratio was 1.1 times at N24, down from 3.2 times at N23. Citrium is proposing a dividend of 1.5 cents per share, amounting to a total dividend of $51 million. This distribution reaffirms our continued focus on generating positive long-term shareholder returns while maintaining a disciplined approach to capital management. Net cash from operating activities was $97 million, mainly due to higher working capital needs for ongoing projects, offset by lower interest expenses. Overall free cash inflow for FY24 was $218 million compared with $505 million for FY23. As a decrease in net cash from operating activities was partially offset by proceeds from the sale of non-core assets and dividends received. We have adequate liquidity of over 3.5 billion of cash and undrawn credit facilities to support our growth initiatives. During our investor day, we announced our target to have 50% of our borrowings from sustainability-linked or green facilities by 2028. I am pleased to announce that we have achieved that target ahead of time. solidifying our ESG commitments. We have also reduced our weighted average cost of debt to 4.9% as at end 24, compared with 5.7% at end 23. Meanwhile, our weighted average debt maturity profile has been extended to 29 months at end 24, Year-to-date 25, our net order book stood at 23.2 billion, up from 16.2 billion in the previous period. Our order book comprises 27 projects with deliveries till 2031, giving us revenue visibility and a good foundation for the years ahead. With that, we have come to the end of our presentation, and we will now proceed with the question and answer session. Thank you.