Seatrium posts S$1.7 billion H2 loss; reaches 670.7 million reais settlement for Operation Car Wash

SEATRIUM reported a net loss of S$1.7 billion for the second half ended December 31, 2023, widening from a net loss of S$118.3 million in the same period a year earlier. This was mainly due to a surge in operating expenses to S$1.2 billion compared with S$63.7 million in H2 FY2022.

As a result of the group’s strategic review, it registered a S$866.6 million write-down of property, plant and equipment, in addition to a S$277.7 million write-down of right-of-use assets.

This came as certain assets and cash-generating units – mainly yard, damaged and obsolete assets or those deemed too costly to repair – were classified as non-core assets, said the group on Monday (Feb 26).

Loss per share (LPS) for the period stood at S$0.0246 as opposed to LPS of S$0.0038 in H2 FY2022.

Revenue for the half-year rose to S$4.4 billion from S$852.2 million, driven by a surge in sales to external parties for rigs and floaters, repairs and upgrades, offshore platforms, and specialised shipbuilding.

For FY2023, the group’s net loss stood at S$1.9 billion as opposed to a loss of S$261.1 million the prior year, with LPS at S$0.0312 compared with S$0.0083. Its revenue for the year was S$7.3 billion compared with S$1.9 billion in FY2022.

The group is also proposing to undertake a 20-for-1 share consolidation exercise to “increase market interest and attractiveness in its listed shares”.

The move comes as part of the group’s capital structure review, and will be subject to shareholders’ approval at its upcoming annual general meeting in April.

Separately on the same day, Seatrium said it reached in-principle settle agreements with Brazilian authorities to pay 670.7 million reais (S$182.4 million), with a further provision of S$82.4 million for indemnity to Keppel, in relation to Operation Car Wash.

Such provisions made for what the group calls a “one-off historical event” translate to 12 per cent of the group’s earnings per share, and 10 per cent of net tangible assets per share as at Dec 31, 2023.

These will have no impact on the group’s financial metrics for FY2024, said Seatrium, adding that it continues to assist the authorities in Singapore in their investigations.

“The company is unable to comment further at this stage as the Singapore investigations are still ongoing.”

Seatrium also said it “remains committed to the highest standards of compliance with all applicable laws, rules and regulations, including in particular zero tolerance for bribery and corruption”.

“The company has implemented a robust compliance programme designed to detect and prevent corruption, including procedures for anti-corruption risk assessments, mandatory compliance training for employees, third-party due diligence, internal and external anti-corruption audits, and a commitment to continuously monitor and improve its policies and procedures.”

Shares of Seatrium ended Friday down S$0.007 or 7 per cent at S$0.093.