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.