Seatrium Ltd

Good morning, everyone. Thank you for joining us at CTRIM's first half 2026 results briefing. My name is Amelia and I take care of investor relations for CTRIM. This morning, we have with us our CEO, Mr Chris Ong, our CFO, Dr Steven Loo. Chris and Steven will bring us through a short presentation before we open the floor to questions. Chris, please.

Thank you, Amelia. Good morning and thank you for joining us today for CTREM's first half 2026 results briefing. Today's results centre on three key themes. First, despite macroeconomic uncertainties, we continue to deliver strong progress. While revenue maintains healthy momentum, our primary focus is driving margin efficiencies. Our cost optimisation and divestments are delivering real, sustainable benefits. Second, we remain well positioned to capture opportunities from a global pipeline of over $32 billion. Although the market was relatively quiet in the first half, we are actively engaged across all major energy markets and expect FID momentum to accelerate in the coming quarters. Our net order book remains healthy at $13.3 billion, providing clear near-term earning visibility with a higher quality project mix. Third, we are shifting from recovery to value creation. This means growing earnings, generating cash and building resilience by scaling our series build and adjacent services business. On the financial headline, revenue rose 5% to $5.6 billion in line with FY2028 steady-state target range of $10-12 billion. We continue to be focused on driving margin improvements through strong execution, quality projects and reducing overheads. Year-on-year gross profit margin rose to 8.6% versus 7.4% last year. This translated to a 54% year-on-year improvement in net profit to $212 million even if you exclude the one-off divestment gains. Including these divestment gains, we reported a 158% growth in net profit to $373 million. That 54% is a number to anchor on. It reflects genuine improvement in operating performance, expanding gross margins and a leaner overhead structure, and a project mix that continues to shift in our favour. The direction is clear and it is consistent with where we need to be by 2028. Our net order book stands at $13 billion with 24 projects deliveries through to 2033, providing clear earning visibility. The quality of our order book is also improving with over 95% consisting of series-built projects that raises execution certainty. With the completion of three projects in the first half, the proportion of lower margin legacy non-FPSO projects has declined to about 1% of the net order book, less than $140 million in value. Our execution remains focused and on schedule. We delivered State of the Art Dredger to Manson and a WTIV to MERS. We also completed a complex FPSO integration for Exxon and Modep. The Revolution Wind Offshore substation has completed offshore commissioning and will be delivered to Austat in the coming weeks. Looking ahead, key projects like P80, P82 and Shell Sparta remain on track for sale away in second half 2026. New order wins to date are just over $100 million including FSRU conversion for Carpower LNGT Cara Denise and the recent takeover of an FPSO life extension project to prepare the asset for redeployment in South Atlantic as we finalise our scope with the client. Global pipeline opportunities remain robust at $32 billion over the next 24 months with supportive market dynamics amidst strengthened energy security and diversification teams. To highlight the key pipeline changes since FY2025, the Petrobras SIAP Projects were removed from our pipeline in 1st Q2026, reducing opportunities in South America from $12 billion to $8 billion. We continue to engage with SBM on local content opportunities. In South America, we are mainly pursuing full-scope FPSO EPCC for upcoming BOT tenders with Petrobras, alongside Guyana integration and module fabrication opportunities. North America has increased from $1 billion to $2 billion as we are pursuing growing FLNG opportunities in Africa worth about $7 billion. Fixed platform opportunities in the Middle East remain intact. Alongside $1 billion in opportunities in Asia, that totals about $21 billion in oil and gas opportunities that we are chasing over the next 24 months. We are also tracking $9 billion in offshore wind pipeline, predominantly HVDC and HVAC platform work, in Europe and Asia Pacific. This includes Tenet's major infrastructure programme, amongst opportunities with other TSOs and operators. Conversions represent approximately $2 billion, largely FSRU and powerships, mainly through our Car Powerships Partnership. This breadth across distinct market cycles is what gives us resilience. Our commercial teams are busy. While we cannot control FID timing, our activity level reflects the pipeline is real and moving, and we are confident in our competitive positioning. In short, it's a matter of timing, not demand. Our FPSO business is where we see the most visible near-term opportunity, We are among a selected group of yachts capable of delivering large, complex new builds at full EPCC scope, with contracts in the range of $4-5 billion. With our globally leading track record and three leading yachts in Brazil, we are well equipped to support customers in meeting local content requirements. This gives us a strong competitive advantage as we pursue upcoming FPSO tenders in Brazil, particularly full EPCC projects similar in scope, margins and payment terms to the 6P series FPSO currently on our order book. Beyond FPSO, we are seeing a growing demand for FLNG and FSRU deployment driven by LNG supply tightness, energy security and the push for supply diversification. These are faster to market and more cost effective than conventional infrastructure. We have delivered the world only two operational LNGC to FLNG conversions. We are also developing FLNGX, our proprietary next-generation FLNG design with AIP achieved, allowing us to pursue new-built FLNG opportunities that may arise. We have executed over 90% of global FSRU and FSU conversions. In first half 2026, we secured a new FSRU conversion contract with CarPowShip. and this is not a one-off. The pipeline for gas conversions is real. It is growing and we intend to take a leading share of it. On offshore wind, our position spans the full sea-to-grid value chain. That end-to-end breadth is not common in this industry. While offshore wind remains a long cycle market, the project's timings have temporarily slowed The underlying demand outlook remains strong. Momentum is expected to return in 2027, supported by grid investment in Europe and an expanding project pipeline across Asia Pacific. As market moves into deeper waters, floating wind will become increasingly dominant. We are preparing for that opportunity through our proprietary FWSS Foundation design and a UK site that gives us early access to the market and a platform to validate our technology and supply chain. Separate from our pipeline, our repairs and upgrade business provides a resilient earning base, balancing out our project-based revenues. The market backdrop remains constructive. We remain differentiated through our scalable global execution platform with supportive ecosystem and globally leading proven track record. While our staple of FCC contracts entrenches us deeply with high-quality customers, we have been refocusing our repairs and upgrade business for growth, pursuing higher-value segments where we have a clear competitive edge. Maintaining a balanced mix of these stable based customers with higher growth niche segments, we expect higher volumes in second half 2026 that will drive stronger segment performance. I shall now hand over to Steven to take you through the financial review. Steven, please. Thank you, Chris.

In first half 2026, we continue to make good progress on margin expansion and cost control. First, our central financial priority is to strengthen margins for resilience. We increase our profitability in first half 2026 through consistent gross margin expansion and a robust year-on-year increase in MPAT excluding divestment gains. Second, structural cost optimisation is bearing fruit. We have materialised initial cost savings from our divestments and we expect to see the full annualised run rate benefits from May 2026. Digitalisation, AI and machine learning continue to drive further operational efficiencies. Third, on the capital management front, we have strengthened the balance sheet and enhanced our financial flexibility to support long-term returns. Revenue for first half 2026 grew 4.6% to $5.6 billion, underpinned by steady execution of the group's solid order book. This maintains the annualized run rate consistent with our FY2028 target range. Revenue for the oil and gas segment grew 15% to $4.2 billion, driven by advancing project progress on FPSO's P84, 85, and the two FPUs, Kaskida and Tiber. These large, complex projects are now entering their most active phase as reflected in the higher revenue contributions. Offshore wind segment was lower by 21%, primarily due to the declining contribution from legacy projects. Repair and upgrade segment was broadly flat, despite a decline in the number of vessels completed, and this reflects our deliberate refocus towards higher value projects. Finally, the other segment declined 17%, reflecting lower contributions from specialised shipbuilding and reduced MRO activity due to the ongoing Middle East tensions. Our gross margins expanded by 120 basis points to 8.6%, up from 7.4% in first half 2025. Key margin drivers remain consistent, a growing portion of higher margin projects, improved operating leverage year-on-year, and continued cost discipline. The combination is producing structural margin improvement, and these improvements were partially offset by a closeout provision relating to the MERS WTIV, which we delivered in February 2026. Other operating income increased mainly due to the one-time pre-tax divestment gain of $172 million from the asset sales announced earlier, the last of which was completed in April 2026. We have earlier communicated 200 million in additional non-core assets year-marked for sale, and we are pleased to report that we have sold an accommodation vessel, Acris Brazil, a few days ago to Grand Energia, a leading vessel operator in Brazil, for over S$80 million. The non-core vessel is about 30 years old, and we capitalised on an attractive opportunity to monetise the vessel while it was still on charter with Petrobras, securing a sale above book value. This transaction removes future re-contracting risk, provides greater certainty over the realization of the vessel's remaining economic value, and is expected to close later this year. Next, our G&A costs remained stable at around 3% of revenue, and overall, our net profit grew 158% to $373 million, excluding divestment gains impact grew 54% to $212 million. EBITDA, excluding divestments, rose 20% to $479 million. We achieved positive cash flow, which is a strong indicator of both the quality of our earnings and the overall health of our project portfolio. OCF, excluding a one-time legacy payment, was $114 million. The one-off item is the car wash final settlement payment of $73 million that we made to the Singapore authorities. Including this payment, reported OCF was $41 million. Investing cash flow contributed $123 million. CapEx was $52 million and was deployed mainly for project needs and safety spend. Our portfolio optimization program unlocked $167 million in cash from asset divestments. and ultimately our free cash flow was $237 million excluding the car wash settlement. This is a substantial turnaround from the negative $5 million reported in the prior period. This trajectory is driven by disciplined project cash management, progressive milestone payment structures and proceeds from our divestment program. Now quickly turning to the capital structure and balance sheet, I think the key development in the first half was the launch of our $3 billion multi-currency debt issuance program in April 2026, which we followed with an inaugural $400 million issuance of our senior unsecured note due in 2031, priced at 2.95%. The issuance received strong institutional demand, a clear signal of market confidence in CTRIM's credit profile. Liquidity remains strong at $3.4 billion in cash and undrawn committed facilities. Net leverage has improved to 0.5 times and net gearing maintained at 0.1 times. Overall, we have a robust, flexible balance sheet with ample headroom to fund any working capital and future growth opportunities. With that, I should pass the time back to Chris.

Thank you, Stephen. We remain firmly on track to achieve our 2028 steady-state targets. First half 2026 revenue of $5.6 billion tracks comfortably towards our $10-12 billion annualised target. EBITDA momentum is building and ROE of 6.1% annualised is moving towards our 8% and above target. We are also delivering on our commitment to shareholders. Our $100 million share buyback programme is near completion, with $90 million already pre-purchased, a clear signal of our confidence in the business. Upon completion, we intend to launch a new share buyback programme to enhance shareholder value. Let me close by coming back to the strategy we outlined at our 2024 investor day. We said then that the world's energy future would be shaped by the need to balance these three priorities, security, affordability and sustainability. Two years on, that energy trilemma remains firmly in place and continues to drive investment decisions. Citrum is uniquely positioned to address these pressing needs. Our breadth of solution offers agility that required to meet the dynamic pace the market is demanding. Our track record is the evidence of our ability to deliver certainty. We believe we are strongly positioned to capitalise on market opportunities. We also said in 2024 that we would be focused on margins. Today, despite significant macroeconomic headwinds, We have delivered a visible progress and established a clear pathway for further margin improvement. While new order wins remain important, our focus is not growth at all costs. For us, growth means winning the right work, executing strongly and translating it into sustainable financial performance and resilience. The progress we have achieved reinforces our confidence that CITREM is on the right path. We expect to deliver a stronger full-year 2026 performance with the key margin drivers intact and gains unlocked from the divestment. Our strategic priorities never changed. We have remained focused, delivered tangible results and strengthened our competitive position. We are confident that Citrum is well positioned to drive sustainable, tangible value for all shareholders and stakeholders. Thank you.

Thank you, Chris. We will now open the floor to questions. For those of you in the room with us, please raise your hand to ask a question. Terence.

Thank you. My name is Terence. I'm from JPMorgan. Congratulations, Chris and Stephen, on the very strong set of results and the margin improvement. If I may ask my first question, historically, CETRIM has performed strongly under Petrobras' EPC-led tendering framework. Winning 90% of Petrobras EPC contracts from 2021 to 2024. So with Petrobras increasingly adopting BOT structures that require operating capabilities, what are the key changes in the competitive landscape from Citroen's perspective? And how is Citroen positioning itself under this model? And what factors will determine the win rate in future Petrobras contracts? Thank you.

Thanks. Good that we met. First thing first, I think the competitive landscape, if you talk about FPSO competition, it has always been there and your statement about us winning that way seems to indicate that it's almost a walk in the park and I can assure you it wasn't. If you remember before the EPC slew of contracts, We were actually in different form. Contracts came in different form. It's a hybrid between engineering, procurement. So the customers have track record of changing the formula, how they want to go to market. And it's a mix rather than a change because there will still be EPC or BOT contracts that come. Now, I guess the main question is that how do we play in the BOT world? Now, BOT world that we are going into the bidding stage, largely there's no difference. It depends on who fronts the contract. Because for BOT, it's a through-train EPC, then followed by O&M, right? So technically, we are in play for the EPC contracts. And technically, I would rather see that Based on your comment just now, with the number of EPC contracts that we have in place, we have sailed away one that has shown that it can perform straight to the field. That puts us in a good position in terms of technical and also we have said that our ability to work on how we basically built those assets very complex but I think the team now has a good track record even if we do not consider the time before the EPC contracts just focusing just on the EPC contracts I think P78 was very important for us Well, there were a lot of detractors along the way, but the team did well, managed to sail away directly to the field and produce. I think that is something in the market that is seldom achieved. We did not stop at our yacht in Brazil and it went straight to the field. And I think now it's tracking along very, very well. 80 and 82 will sail away. and we think that it will mimic if not improve the performance of what we have right now.

Thank you so much, Chris. And we also understand that Citram is pursuing subcontracting opportunities with SBM under the SIAP contracts. And also Citram is participating in the full scope upcoming Petrobras FPSO tenders as a direct bidder or consortium partner. So how should we think about the potential overlap between direct tender participation and subcontracting opportunities?

Well, All these opportunities have always been around. If you take a look at different span of scope in an FPSO contract, Guyana with Exxon is very clear. Those have SBM and Modac in play. We also have contracts that are lease and operate type of contracts all the while. Our local yards have played the local content very well. So there's a different mix. So if you take a look, how will you think about the overlap? It is really driven by the project requirement because when you construct modules and whether you do the full integration, those are time and space. I can't really guide how do you look at what is the difference. We still have the Jaguar with Sail Away or one of the Exxon integration only type of projects. We still have Jaguar in the yard. So we are pursuing all these prospects, whether they are EPC, whether they are integration, whether they are just module fabrication. So all hands on deck. The team are very busy. Thank you. Thank you for the question. Good to see you.

Thanks Terence. Just now we had a hand from Louie.

Hi, good morning and thanks for hosting. Congrats on the results. This is Louis from Citi. Just had three questions initially. The first one is regarding the OPEC savings you've had from the overhead cost savings. Could you disclose how much of those of the 50 million you had booked in the first half and therefore what's coming in the second half? The second question relates more towards your order book. We saw from slide 25 where you have the percentages of completion that you're even now working quite significantly on contracts that are due 2028 and onwards. Is it possible that you'll finish earlier and in that case do you also get paid ahead would be the question? And third question is on the rolling order book pipeline that you've upgraded to 32 billion. Chris, you mentioned earlier part of it is a billion more in the US. I didn't catch the rest of the 3 billion. Where is it coming from essentially?

So the OPEC savings, as you recall, we said the divestments was about $50 million on a run rate basis. In the first half, we completed all the transactions in April. So in the first half, we recognised approximately $10 million on a run rate basis. So by second half, the $50 million should come in. I hope that answers your question.

Louis, I'll take the order book, the elephant in the room. I guess you mentioned that I think the question is in twofold, right? Whether we can accelerate so that we can get paid earlier. You speak like my customer. Everybody loves to accelerate, so we have to balance because at the end of the day, we do have quite a lot of enquiries also. So technically, it's a planning of time and space. But that is the beauty and expertise of Citrum. Now we are fully integrated. Manpower in a way is fungible. So technically when work fronts, because it's not just about manpower or whether you can accelerate, it's also work front. So if certain work fronts are not ready, we are not reckless in order to push. But technically, if you see, I would rather see that most of the series built projects are progressing better and better after each other, after each one. P84, P85 is progressing very, very well. So the key is to make sure that we are safe. And of course, if there are opportunities to accelerate, definitely, because again, that's the beauty of the contracts that we have. So far, most of the customers have honoured and are very happy to pay us because it means that the project is progressing along fine. Of course, beyond Enquiries, we also have to balance between segments, right? Because R&U is also a little bit more dynamic. So it's a balance between prospects and ongoing so that we are able to answer and service most of our customers at one go. You mentioned about US. US, without a doubt, with us already operating and delivering Sparta, progressing along fine on the BP, FPUs, that market is a very important market for us. A billion dollars I think no doubt those would be mainly on LNG prospects. So we are excited about that and pushing for that. We will let you know when the project has some landing.

Thanks Chris. Just a follow-up on that, the additional 3 billion, where is it coming from, which other countries? First quarter you had 28 billion targets, now it's 32. A billion came from the US, the balance is Brazil or?

I won't segmentize that way but suffice to say compared to the last I believe you guys asked a lot about hey it reduced but now it went back again it's a coincidence it became 32 again we did not do anything on that the increase mainly will be around LNG prospects as we mentioned just now I think that market is proving to be quite a big enquiry work that we are doing right now. FSRU like what we mentioned, we are the world leader in FSRU conversion. We recognise that we started the very first one and to date we are market leader and in a very short time we are looking at No less than six to nine FSRU tenders right now. So ranging from integration or full EPC for FSRU, also for FLNG conversion. So we're actively looking at that. And at the same time, as what I mentioned, the team is not static. Our tech technology group is developing FLNG new build. So I think that that part of the market is something that is sapping up a lot of our energy around. So hopefully there'll be good news coming.

Thank you.

Thanks, Louie. Next question, Pei Hua.

I'm Peng Hwa from DBS, Congress on the Good Results. I have two questions. First is maybe a continuation from what Terence asked. Going to the BOT model going forward, we will partner with operators as well. I mean there are maybe some 10 pre-qualified operators. If you go into this mode, how would that change our relationship with all these operators going forward? This is the first question. Second question is on order win. I think all of us has been asking since first half is relatively slow. So I wonder if Merchant could give us a bit more colours or confidence as to what are the maybe some major projects that we could expect FID in the second half. Thank you.

I will talk about the BOT. I think just to crystallise the understanding of a BOT tender, BOT tender is largely different from how some of the operators really tender out the project in pieces. The BOT tenders that we are involved with a front-running operator usually will involve us and the next one of course it involves us taking the EPC part of the whole thing because again, proven track record, Again, we understand what is the requirement and that's a huge part on building things in Brazil and for Brazil. So, the partnership is around and BOT tender is slightly different from how you should think about in an EPC contract. Because EPC, you just give a technical specification, you cost against it and you talk about margin. The BOT, the art is about trusted partners, and also importantly how you structure the contract because if you go in and you start having overlapping interests and also margin then you're not pricing to win. So we are going into BOT with the mindset of pricing to win with our partners. So it is quite elaborate. The risk and reward is quite slightly different. But mainly, you should think of us wrapping the EPC portion because we are already proven. So there are knowledge within the organisation. There's already ability on the one-seater execution, how to get that done. So BOT is, to me, if you take a look at where we add value, would be the full EPC scope. All right. Now in terms of order win, there are quite a bit of hints inside what we said. Basically, I can't control FID timing for the contracts that we are chasing and I think I maintain that since I believe you all asked the same question in 2023, 2024. Say, you were chasing me to say that how come I would love to give good news like a read, you know, every time, you know, it's about distribution and contract wins. But the key thing is that the team is fully engaged. If you take a look, actually, right now, I would say that our tender team is involved in projects and it's almost their peak. They are really going out there and try to win the good quality contracts. Now, what are upcoming? Of course, Albuquerra is well-known in the market. The results will be in the second half. But that's not just the only one. There are a few FSRU conversions. I've already said that we are I think that we are in a period of time where we suddenly see quite a number of enquiries around there. Of course, HVDC and HVAC is a built up, not forgetting that we won a HVDC contract in December. So that's only quite recent and it's a very competitive tender. Very proud of the team when they won it. So depending on how and when the tender is going to come, the team is also locked in with the customers. There are a few HVACs that we are chasing. So I think broadly across, if you think oil and gas, there is also Guyana that's coming. All right, Diana, I think Exxon has been in the market. That's public domain knowledge. So if you take a look at it, I can go on and on. But those are the breadth across all our segments that we are locked in with the customers.

Chris, if I may, just one point. On the BOT, the commercial terms are similar to what you've seen with our other projects around margins and milestone payments. But the structure is different, but the end exposure for us is actually the same.

Yeah, that's a good point. When I say the EPC contract, if it's an EPC contract, of course, We are direct with Petrobras and we have the EPC contracts. But if you take a look at the BOT, then it depends on the structure, right? Of course, the operator partner would be the one that's going to front it and we will have a structure. But largely what I'm trying to say is that the specification, the payment terms, the risk profile localised in the EPC scope itself is largely the same.

Thanks, people. Next question, Meg.

Hi, this is Meg from CGS. Thank you for the opportunity. So I noticed in your pipeline compared to the full year in the Middle East and Africa, you've kind of split it out this time with a bit more clarity on Africa versus Middle East. So can we understand how that has changed from like early in the year, pre-war, was it more On the Middle East side, how that pipeline has changed and any inquiries that you're seeing following the conflict there. And secondly, on P80 and P82, understand that they're scheduled for delivery in 2027, but would they be sailing away in 2026 before that? Thank you.

Africa, Middle East, I think there was some feedback that what is the colour around because I believe at that point of time, all our analyst friends trying to peek into whether the Middle East conflict affects the pipeline. That's why we are very specific in splitting that up. The other portion is also because of how the market is moving. We mentioned that The market security, quick to market type of concept around that, we do see an increase in Africa prospects. So whether it is oil or gas, I think that there are quite a lot of customers that are actually looking at that area. So we thought we give the granularity for you to make sure that you understand where we are looking for. 80 and 82 now for EPC contracts it doesn't stop when we sail away right just like P78 it sailed away went straight to fuel the team are on the FPSO gunning for first oil then you inject gas or you flare and then after that you export cargo All right, so even P-78 sail away. It is now, I believe that we have passed all the, and we're waiting to export cargo. I think capacity-wise is already more or less proven. It's the same for P-80 and 82. They will sail away this year, second half. That's confirmed. Look forward to our LinkedIn post with nice pictures for the ceremony. And that's why it is projected to be delivered next year because there are still on-field works that needs to be done. But saying that, we shared with all of you, now CITREM is very largely global. All my dear colleagues are largely one CITREM. We have local Singapore and Brazilian colleagues sailing with the FPSO, making sure that they take care of it and they'll come online nicely next year.

Thanks, Mac. We have a question online from the Straits Times. How has CETRUM been affected by geopolitical issues this year? And with the energy crisis due to the volatility of oil prices, do you see an increased shift towards renewable energy that could propel CETRUM's future projects?

Thanks, Suen. Let me try to internalize the question because there's a lot of moving dynamics that you have listed in your question. Now, geopolitical from Middle East first. I think it affects everybody. The first order impact, of course, is cost, right? and I think the price of diesel and all this for our operation definitely hits not only us, it hits every industry. So again, I hope you all appreciate the work that's done by the team. Despite all this, I think our discipline around margin, around execution, still brought in a very credible set of results. In terms of prospects, that is why I ended the opening speech by saying, look, at the end of the day, in terms of prospects, it's not largely dependent on oil prices. There are different dynamics. I focus a lot around oil prices. I didn't focus on oil prices. I rather take a look at what are the security that different countries in different regions are looking at. If we broadly take a look at all our prospects, it actually paints a picture. When we say that the type of projects we are looking at, Africa seems to add a lot of colour today. because there is prospects that our customers are looking that they are able to bring it to FID potentials. But we have to wait because we are further down the food chain. We give them solutions around how to build the asset, but they have larger consideration. Of course, South America is one of the big oil producer. Then comes to US, which is a very gas-centric type of market. But that doesn't mean renewables doesn't play a part. If you take a look at Europe, Is it a transition or a security question? I think that is a very clear-cut answer. I think it's both. So, and Asia is about LNG, it's also their offshore wind prospect they're working on. So, I believe that, I think it's a long way of answering a very complex question because there are operating risks, of course, that are well managed. But the prospects, even from the Middle East, they are still moving. So the key thing is that which are the ones that we will place our bet to actually chase to give us a good margin and a good chance of delivering it. Those are the things that we are very focused on. And of course, customers. Trust in customers with us is quite evident. Many of them are all repeat customers. They know where to go and who to call. That is one of the most important. And customer investment, the prospects remain intact, especially for deep water. Again, I can go on and on. It becomes a strategy session. But remember, deep water assets, As we mentioned much earlier in our strategy, is that deep water assets, when it comes to geopolitics and bankability of all these deep water assets, even in challenging jurisdictions like Africa, is a very attractive formula because it's deep away from land and you move away from the geopolitics a lot. So the ambition to actually extract is very clear and it's there. The type of asset depends on the field. But I think the bet is really on deep water oil and gas products.

Thanks, Chris. We have a next question from Sharanya.

Thank you so much for the presentation. I have a few questions. First, it was mentioned that there's a bit of impact on the MRO segment. If I didn't hear wrongly from the wall, could you elaborate a bit more about how you see the situation evolving going forward given the continued uncertainty? My second question is on the offshore wind segment. You mentioned that there's going to be momentum in 2027 and you mentioned Europe and APEC. I would like to ask for APEC or even globally, where do you see new growth markets beyond the traditional places like Europe and Taiwan? Are there opportunities in markets like Philippines where there's more talk on offshore wind? And my third question is on, can I just double check, you mentioned that you're looking at six to nine FSRU tenders, is that correct? And could you talk a bit more about which markets are particularly of interest and what are the macro trends that are driving FSRU demand, you know, in light of the very volatile situation around global LNG right now? Thank you.

Wow, this is turning into a strategy session. But okay, let me try to address this. MRO in Middle East, I think disruption. Basically, most of our MRO business is in Middle East. So we don't think that there's a destruction in market. I would rather say that there is a little bit of... Tension in the pace because of the tension. But we fully expect that to come online because the assets out there are still drilling. Tenders are still coming. So at some stage, they will have to do something. I think basically what is limiting it is about Human traffic, flights and all these, all the challenges. But our MRO in Middle East, we have very good local colleagues down there still holding the fort. So our thoughts are with them for them to stay safe. Now offshore wind, Wow, you mentioned, please don't talk about Europe because it is already a very mature market. Thank you very much. Because yes, it is a very good market for us. And by no means it is really mature. I think there's still potential to go after. APEC, of course, the main place will be Taiwan. There are quite a number of countries that were mentioned with new prospects like Philippines and all this. I think Japan, Korea, it depends on how open that market is. There are prospects. It takes time. But usually where we track are the developers that we know very well like people like Austat, people like The Taiwanese market developers. So where it will happen is that definitely Citrum with the track record that were delivered in Taiwan, that gives us a very good position to actually repeat that design in a more certain way. So prospects are there, but I think that is premature at this present moment because if you take a look at the news, I think tenders are just barely beginning and even in Philippines, yes, I think that we will be approached one way or the other. You mentioned about FSRU, macro trends and where they are. Honestly, I can't list down all the places. But suffice to say, if you look at the LNG market, we believe that the war itself has created the security issue, the flow of fluids around the world, will be changing, changing in the sense that the security question comes to the front for all nations. How do I secure my feedstock and how do I power my homes? That has led to the question on infrastructure investment. Infrastructure investment, then the question will come, which would be the fastest to market and which one would be the most certain one to go? We have We have engineered that solution of FSRU first in the world. We convert and then it went to market. It has caught on. It's precisely with this concept where if you need an infrastructure that allows you to receive LNG into your grid, that would be one of the fastest way because the FSRU is converted in a controlled environment in the yard. You develop your key and the ability to intake When the FSRU turns up, you are able to receive LNG feedstock from the LNGC. It is dotted all over the world. The prospects are worldwide. The key thing is that both FLNG and FSRU prospects probably will turn up hand in hand. Because it is a lot more on the trading route for this one and also a security question. Operators would be the better group to answer where are the prospects. But we are seeing that there are nations that are looking at how to be LNG ready. Thank you.

Thank you. Sorry, just a small clarification on the six to nine tenders you mentioned. Is it for just FSRUs?

Yes.

And are you able to share which market specifically?

Which market? Yeah, I can. But like I said, it's suffice to say that it is dotted all over the world. They just want the infrastructure to be LNG ready. So it's a regas. So when you transport, once you have FSRU at your key site in your country, that will allow you to be LNG ready. So that is a good piece of asset to have when you think about energy security question.

Thank you. Thanks, Shah. Next question, Zhiwei.

Hi, sorry for my query. Thank you for the presentation and congrats on a good set of results. I have three questions, right? One on ship chartering and the other ones are more on repairs and upgrades, happier things. Ship chartering, you had about $57 million operating profit this half, which is about 10% of your group operating profit. And you are selling Aquarius Brazil, which is a good thing. But it does contribute quite a chunk of your earnings if I understand it correctly. So kind of keen to understand how that line item, the operating profit will move post divestment. That's the first question. Second question is on repairs and upgrade. You talk about a stronger performance expected in second half of 26. and I know you're sitting in somewhat of a cruise vessel upgrade cycle which tends to do pretty well for sea trim right if you look at the last cycle I think it was 2019 and then it was interrupted by 2020-21 now dry dock schedules happen every five years so we should be sitting in one right now so maybe you can elaborate about the upside that you're seeing on that front And the last question is really in Brazil, you are now exploring more repair as well as FPS or retrofit work. How do we think about any upside from that? Thank you. Maybe I'll take the first question.

On the ship chartering line, once the Equus Brazil transaction closes, There'll be nothing because we have sold all our ship chartering business. From a financial perspective, actually, okay, so the structure for Aircruise Brazil is a little bit complicated, so maybe I'll share a little bit so you can then, I guess, model it out. There's a small amount that is given up front as the deposit, and then over the next 18-24 months where the Petrobras charter is still there, we have agreed with the buyer whether they will pay us effectively the net Proceeds that we would have gotten plus a little bit more. And at the end of the two-year contract, there will be a bullet payment where they pay us the remaining value. So from an economic value perspective, it is slightly better until the end of the Petrobras contract, and then we will receive the remaining payment at the end. Roughly, the last payment is about 45% of the total sale value. So it may not appear in that line, but it will appear in another line in the coming two years, basically.

Your question on cruise. We do see quite a buoyant market. It is a very important market for us. Dry dock schedule is the key. And if you take a look, we are the market leader for cruise upgrade because of the extensive logistics requirement and the know-how. We do expect some wins in terms of the cruise segment, but I just want to basically sell that, not only that segment a little bit, Our R&U when we talk about higher value type of contracts, it's not just cruise. We do have naval contracts. We have always said that the UK, US, New Zealand, Australian naval vessels are also docking and doing works with us. Those are relatively good margin type of projects. Offshore drilling rigs is also a segment that is good for us and that's not just Singapore. And we have always been in the market. That's why Brazil is making some move. In fact, they are quite successful in getting some of the drilling repair and upgrades in Brazil which will give us quite good margin from there. So I think that the local benefit in terms of activity will come and I hope I didn't go too far off from cruise because I just don't want The impression that only the cruise vessels are giving us. We love that. Actually, our team has a segment group of people that are very built in with the cruise segment. That's a different segment of customers. So the answer is yes. That's why we are saying that in the coming half or even for the next year or so, these are the few segments that are relatively active out there. And if you look at our Tuas Boulevard yard today, the docking and actually the quayside is almost full. and a big chunk of it is also scheduling it out with our customers. And we have always been saying that we need all the customers to be in a position for us to understand when is their docking schedule and when do they need that. So it's coming to a good period whereby we are able to term it out.

Sure. Let me help you out here. The reason why I ask is your cruise upgrades, for example, you've done two upgrades in first half. Each upgrade is a $50 to $100 million contract. The margins are more than 20% of your mid-teens gross margin of your EPC. So considering the pipeline and the wave of upgrades and dry docks that you see from cruise vessels, considering the large Quantities, contract values is coming in. Do you expect this to reasonably improve your margin in roughly by how much?

As mentioned, that is why I'm saying that there's not only the cruise market. I think I'm just giving you a hint that the segment that I mentioned just now probably will give margins roughly around the same. Improve the overall margin, I don't know whether CFO has a calculator with him, but I believe it's a blended sort. I don't think we calculate how it improves our margin that way. But Suffice to say, R&U as a whole, we are expecting it to pick up a little bit.

You want to add anything? We've guided before the R&U segment. The margins are better than the mid-teens that we have talked about for the EPC. So that's consistent across the defence, the naval, the cruise ship and all those segments.

Last question, your defence repair value, roughly how much is it?

It depends on the contract. Because it's R&U, it's very difficult for us to predict. It depends. Sometimes when the ship comes in, it may be a 10, 20 million contract. When it leaves, it can be 100 or 200 million contract. We wish that's the trend, but it's not guaranteed. So sometimes it's about like what I mentioned, the key is to be at the front foot. and get the customer to trust us. The main value proposition is that when you come in, you will get out as promised. I think we have basically delivered that right across all our customers. That's why they are able to get onto the table with us on the docking schedule and all this. Thank you.

Thank you. One more question from the back. Thank you.

Hi, I'm Ting Nan from Upstream. Thank you for the comprehensive sharing today. So I just wanted to know a bit more about your FLNG new build business that you mentioned briefly earlier. So you mentioned that your technology team is developing the new build business. So could you share a bit more about what capabilities in addition are you looking at? Where will the new build vessels likely be built? And is there a timeline for the commercial readiness and Competition for tendering of these new build vessels.

Thank you. As of now, we are able to tender a new build FLNG. So that I want to be clear. We have the capability of doing a new build. At the end of the day, it's about economics. It's about how we extend the track record. When we do the X, FLNG X, it's basically to take a look at how we can control the design and also the cost a lot better by having designing that more of a yacht-centric type of design. So whether there's any timeline or when to market, it's already in the market. It all depends when someone pull the trigger and when the tender will be concluded, right?

Thank you. I think this brings us to the end of our results briefing today. Should you require further clarifications, please feel free to reach out to us at our investor relations email address. Thank you very much and have a lovely day ahead.

Thank you.

For those of you here, you can join us for lunch at the next room.