Seatrium Ltd

Good morning and welcome to Citrum's first half 2025 results briefing. I'm Winston Cheng from the Investor Relations and Corporate Communications team. With me today is our Chief Executive Officer, Mr. Chris Ong, and our Chief Financial Officer, Dr. Stephen Liu. We'll kick off today's briefing with the CEO's address, followed by the CFO's financial review, and end with the CEO's take on priorities and outlook for the company. At the conclusion of the briefing, we will have ample time for questions and answers. And with that, let me turn the presentation over to Mr Chris Ong.

Good morning and thank you for joining us today for Citrum Group's first half 2025 results briefing. Before we dive into the numbers, let me take a moment to reflect on the broader industry landscape. The first half of 2025 has tested the resilience of global markets. Trade tensions and geopolitical uncertainties have postponed investment decisions, creating headwinds across maritime trade and in offshore development. Yet, amid these challenges, there are reasons for cautious optimism. The oil and gas sector remains active, and while offshore wind currently faces headwinds, there is continued momentum in Asia-Pacific and Europe. Crucially, CETRIM continues to benefit from a diversified and resilient order book that extends through to 2031. This breadth across geographies and segments not only strengthens our revenue visibility, but also helps buffer the impact of short-term volatility. As we navigate this evolving environment, Our path towards our 2028 targets is guided by a purposeful set of strategic priorities. Delivering operational excellence, steadfast financial discipline, deepening customer partnerships, and positioning CITREM for sustainable long-term growth. Our first half performance reflect this steady trajectory and disciplined execution of our strategy. With that context in mind, let's take a closer look at the key performance highlight for the first half of 2025. First, I'm pleased to share that we delivered a stronger financial performance despite the volatile macro environment. We expanded our gross margin and improved our net profit. Clear signs that our disciplined approach and operational resilience are paying off. Second, We remain laser-focused on project execution, safety and quality, core pillars of our one-seater global delivery model. We currently have 25 projects underway, all progressing steadily against key milestones. In the first half of 2025, we successfully delivered two FPSO integration projects and completed 101 repairs and upgrades. This includes a world-first full-scale turnkey carbon capture and storage retrofit. That's a major milestone, not just for us, but for the industry. And third, we continue to build momentum on commercial front. Our multi-pronged strategy and proven execution helped us secure new winds and pursue a healthy pipeline of opportunities. Notably, we marked our entry into Japan's offshore wind market with a heavily vessel order. We also signed an MOU for BP for Tiber, a second floating production unit, and secured two FSRU conversions. These achievements reflect the strength of our integrated model, the trust of our partners and dedication of our people across the globe. Turning to our financial performance for the first half of 2025, we delivered strong top-line growth with revenue rising 34% to $5.4 billion from $4 billion in the same period last year. This reflects our continued focus on discipline project execution and delivering on our commitments to clients. Net profit came in at $144 million, marking a remarkable 301% increase from $36 million a year ago. This significant improvement underscores the impact of our strategic focus and operational efficiency. We also saw a meaningful improvement in margins, driven by a shift towards higher margin projects and enhanced cost management. This translated into a 31% increase in EBITDA, reaching $407 million compared to $311 million in first half 2024. Our return on equity improved by 340 basis points, to 4.5%, and we strengthened our balance sheet, bringing net debt to EBITDA down to 1x from 2.9x previously. As of end June 2025, our net order book stood at $18.6 billion, with $6.3 billion of that anchored in renewables and cleaner energy solutions. This reflects our continued momentum in energy transition space and commitment to building a more sustainable future. The oil and gas segment continues to be a key growth engine for Citrum, underpinned by focused execution of a robust order book. At the heart of this momentum are our FPSO series build and integration programs, alongside the floating production units for Shell and BP. For Petrobras, we recently celebrated the sale away of FPSO P78, the first of six in the series. The lessons learned from its execution, particularly in engineering and workflow efficiencies, are now being applied to P80, P82 and P83. With all three FPSO progressing in parallel by year-end, we will see a stronger capacity utilization and improved execution rhythm at Tuas Boulevard. In addition, topside module fabrication for MODEX FPSO Raya, destined for Brazil, is on track for delivery in the second half of 2025. Shifting to Guyana, this market continues to expand with our fourth FPSO delivery, the One Guyana. Building on this track record, we are advancing module integration for the 5th and the 6th FPSO through operators SPM and MODEC for the end client ExxonMobil. That being said, we have been responsible for topside module integration work for all of the FPSO destined for this market today. In addition to One Guyana, we also delivered FPSO BW Opel earlier in the year. With 12 active projects, the oil and gas segment remains strong, supported by rising global energy demand, driven by emerging markets, data center growth, and AI. Energy security is also a growing priority amid ongoing geopolitical volatility. Looking ahead, we see a robust pipeline across Brazil, the Middle East and the Gulf of America, with opportunities exceeding $19 billion, reflecting both markets' demand and confidence in Citrum's capabilities. Offshore wind continues to be a strategic growth area for Citrum, with 11 active projects and strong momentum across Europe and Asia-Pacific. Our revenue for first half 2025 is boasted by key milestone achieved through our collaboration with Tenet on their 2GW program, for which we are constructing three HVDC offshore converter platforms, which are central to Europe's energy transition efforts. Our team is gearing up to deliver a converter platform SOFIA for RWE and the Greater Chang Hua 2B and 4 substation for Austec. We are also advancing through major milestones with two groundbreaking wind vessels. The Cherry Beast, built for Dominion Energy, is nearing sea trials, while Mer Sturgeon has undocked and is entering final outfitting and construction phase. Both are industry-first and showcase our growing expertise in offshore wind turbine installation vessels. As the energy transition accelerates, offshore wind is becoming a strategic pillar of national energy security and economic policy, particularly in Europe and Asia-Pacific. Europe is targeting 187 GW of new wind capacity by 2030. with offshore wind playing a key role. In Asia Pacific, over 250 projects are in development, driven by net zero goals and government support. This is creating robust demand for HVDC platforms, substations and insulation vessels. With over $11 billion in potential opportunities, CITRM is actively engaging with transmission system operators and developers to shape the next wave of offshore wind growth. Our repairs and upgrade business continues to be the counterstone of CITRM's performance. Driven by our commitment to quality, innovation and supporting the maritime industry's transition to cleaner energy, In the first half of 2025, our team completed an impressive 101 projects, each one a reflection of our technical depth and operational excellence. A standout amongst them was the delivery of our fourth FSRU conversion for Kinetics on Carmo LNGT, Powership and Tactica, a complex and high-value project that showcases our capabilities in specialized retrofits. Now, while the global shipping market is navigating a slower growth and short-term LNG price volatility, one thing remains clear. Customer continue to choose Citrum, not because we are the lowest-cost option, but because we consistently deliver with certainty, precision and quality. That trust is evident in our recent FSRU conversion wins for Hope, EV and Kinetics. Projects that reinforce our leadership in the retrofit space. We are also seeing exciting momentum in maritime decarbonisation. In June, we signed a letter of intent with Sovang ASA, a favoured customer contract partner. to retrofit carbon capture and storage system across their fleet. This builds on successful delivery of the Clipper Aries and signal growing demand for sustainable solutions. This strategic partnership provide a steady base load for our yards and strengthen our position as a trusted partner in global energy transition. Beyond our core new builds and conversions, Citrum is advancing clean energy and decarbonisation through innovation, partnerships and regulatory approvals. We are leading in onboard carbon capture, ammonia bunkering and ammonia to power solutions. In carbon capture and storage, we are ready for the growing LCO2 shipping market with proven designs from our subsidiary LMG Marine. This market opportunity is projected to hit US $6 billion by early 2030s. In ammonia bunkering, we are leveraging LNG expertise to pioneer next-generation fuel infrastructure and digital innovation like IoT-enabled digital twins and remote operations. We have also completed a successful ammonia-to-power pilot, validating its feasibility and unlocking new revenue streams in clean energy and bunkering. These efforts reinforce CTREM's commitment to maritime decarbonisation and looks to equip the global energy transition. Before I hand over to our CFO, I want to touch briefly on the decade-long issue of operational car wash. On 30 July 2025, Citram signed a leniency agreement with the Public Prosecutor Office in Brazil in relation to Operation Car Wash investigation. This morning, we signed an equivalent agreement with the remaining Brazilian authorities. Under the term of this agreement, the company will make a final settlement payment totaling approximately Brazilian R$729 million, which is equivalent to about SING dollars $168.4 million. On the same day, we also finalized and signed the Deferred Prosecution Agreement with the Singapore authorities. This agreement is subjected to approval by the General Division of the High Court in Singapore. Under the DPA, CITRM will pay a financial penalty of US dollar $110 million Importantly, US$53 million of payments made to the Brazilian authorities will be credited against this penalty, resulting in a net payment of US$57 million or approximately SING$73.3 million to the Singapore authorities. In line with this, we have reversed SING$40 million in provisions for the period ending 30 June 2025. there is no material impact on the Group's financial year 2025 earnings or net tangible assets per share. Finally, we are pleased to announce that the Monetary Authority of Singapore and the Commercial Affairs Department have concluded their investigations, confirming that no offences were committed and no action will be taken against Citram. This removes a decade-long overhang and we remain firmly committed to the highest standards of governance and integrity, with zero tolerance for fraud, bribery and corruption, supported by robust global policies that promote discipline, ethics and compliance. I shall now hand over to Stephen, who is having his maiden results briefing as CFO of Citrum, to bring you through the financial updates.

Steven, please. Thank you, Chris. Good morning, everyone. Before diving into financials, I wanted to take a moment to reaffirm the three key levers that we believe underpin our value creation strategy. First, portable growth and resilience. We are capitalizing on the sustained global demand for offshore energy and maritime infrastructure. And so our focus is to convert a strong pipeline into contract wins for high quality and series build projects and to develop a sizeable and resilient order book. Second, margin expansion. We expect margins to improve with operational leverage and greater share of higher margin projects. In addition, we are also driving execution of efficiency, optimizing costs and accelerating automation and digitization initiatives. And third, asset portfolio optimization. Two years into operating as OneCitrium, we now have greater visibility and integration across the business. This enables us to streamline operations which improves utilization, monetize non-core assets, and at the same time, deploy capital prudently to enhance asset capabilities. Against these strategic levers, I'm glad to report a much stronger core financial performance for Citrim in the first half of 2025. Revenue increased to $5.4 billion for first half as we made steady progress against project plans and recognised higher revenue. Our gross margin also doubled from 3.7% in the first half of last year to 74% in the first half of 2025. Furthermore, we have made meaningful progress in streamlining our G&A expenses over the past year and reduced leverage while lowering our weighted average cost of debt. As a result, net profit rose significantly from $36 million to $144 million in the first half of 2025. Now, let me deep dive into a few key areas, starting with our income statement, where I think we've made significant progress. Revenue, as I mentioned just now, increased to $5.4 billion, which is in line with the second half of last year and 34% higher than the first half of last year. This is driven both by oil and gas and offshore wind solutions as we continue to execute our current projects. Cross-margin widened significantly by 370 bps to 7.4% for the period, reflecting strong core performance. This is supported by a favorable mix of higher-margin projects, cost savings, and higher asset utilization. Other operating income was lower in the first half, mainly due to fewer divestment gains and less favorable FX movement, especially due to a weaker US dollar. G&A expenses as a percentage of revenue declined by 120 bps to 3%, compared to 4.2% in the first half of 2024, as we benefited from greater operating leverage and cost savings. 5% driven by debt repayment, lower financing costs, balanced by decreased interest and dividend income. And finally, our net profit saw a significant uplift, rising from $36 million to $144 million in this half. In summary, our core performance improved as a result of revenue growth, margin expansion, cost savings, and disciplined execution across the business. Now let's also take a closer look at our revenue. For the first time since merger, we provide a breakdown of our revenue mix to give more clarity on segmental performance. Contribution from oil and gas rose 26% to $3.6 billion, mainly driven by steady execution and progressive revenue recognition. in particular for the six new-build Petrobras FPSOs P84 and 85, which actually started work in the second half of last year. Offshore wind solutions doubled as revenue to $1.1 billion as we made strong progress on our three tenant HVDC projects. And for repairs and upgrades, we completed 101 vessels for the first half of 2025, slightly lower than 133 vessels in the first half of 2024. And as Chris shared earlier, this was mainly due to trade-related uncertainties and the general weakness in the LNGC market. The other segment saw revenue growth of 141%, supported by contributions from specialized shipbuilding, sale of rickets, and chartering activities. Moving on to our cash flows, our operating cash flows have improved significantly versus first half 24 and we remain focused on meeting project milestones to sustain and further strengthen our cash generation. Investing cash flows were driven by a capex of $32 million and proceeds of $27 million mainly from asset divestments in the period. Financing cash flows reflected our efforts to return capital to shareholders, and deleverage to strengthen our balance sheet, which I'll provide more details in the next slide. In terms of managing our capital structure, our approach continues to be balanced and disciplined in order to delever and focus on reducing cost of capital. In the first half of 2025, our gross debt reduced by approximately 10% to $2.4 billion as of 30 June 2025, At the same time, our cost of debt declined from 4.9% at the end of December 2024 to 4.4% at the end of June 2025, driven by both a lower base rate, in particular in Singapore, and a reduced margin. Looking ahead, we continue to diversify our funding sources and collaborate with our network of financial institution partners to secure favourable refinancing terms, which is supported by our improving credit profile. In terms of liquidity, we maintain a robust position with over $3.5 billion in cash and undrown facilities, providing ample flexibility to support ongoing operations and growth initiatives. Overall, our balance sheet remains very healthy with a net leverage ratio of 1x and a net gearing of 0.1x as at the end of June 2025. Lastly, I want to give you more colour on our order book and pipeline. As of 30 June 2025, our net order book stood at S$18.6 billion, comprising of 25 projects with deliveries through to 2031. This gives us revenue visibility for several years. More importantly, as Chris shared earlier, we see over $30 billion of near-term pipeline opportunities from both oil and gas and offshore wind markets, and our commercial teams are actively pursuing them on the ground. I think this positions us well for further growth and value creation for shareholders. I will now hand the time back to Chris, who will wrap up the presentation with the group's key priorities and outlook moving forward.