Seatrium Limited (5E2) Earnings Call Transcript & Summary

Well, a very good morning to everyone. It's just like a family gathering. There's a lot of familiar faces here, with partners that has followed the Seatrium story for the last one year. And I have just said to many of you, it's just one year. right? It seems to be a long time. But thanks for your support and also interest in the Seatrium journey. For the past one year, I've engaged many of you in the audience, and there were a lot of question about where Seatrium is heading, what's our strategy. And today, we're going to share with you the outcome of our strategic review. Some of the things that I said might not be new to you, because as [ Mark ] has mentioned, the management team is actually executing the strategy on the go. We couldn't wait for the strategy to be finalized, then we start to execute because the world doesn't wait for Seatrium that way. Now before we move further, let's recap. Just one year ago, what did we do? It is a transformative combination of 2 large mammoths in the industry. What do we put together? We put together the capacity. Most importantly, we put together the talent, the market, and of course, our philosophy and most importantly, our track record and our -- the trust that the customer has in us. Just for the short one year, what have we achieved? When I engage all of you one of the starting question is what happened to the integration? Are we -- is it smooth or how are we done? Now after one year, the team has worked very hard to actually put the 2 teams together and integrate ourselves as One Seatrium. Today, we are no longer green or red. We are electric blue Seatrium and we have integrated the processes. And of course, we have launched the new brand in the market. Our customers, authorities all over the world as Seatrium is a global business, and of course, partners to articulate what Seatrium stands for. And one thing that I'm very proud of our team, we have actually strengthened our balance sheet tremendously. The team has achieved a lot in this one year. Just to remind, first half 2023, we were actually net current liabilities of $1.5 billion, and we ended the year in net current asset position. It is not just about terming up the loan, which we had the support of many of our partners over here, but it's also our receivables, working hard to collect our receivables to put us in a strong cash position. And just within one year, we actually got more than $3.5 billion of sustainability-linked loans trade financing, which put us in the right track of this energy transition. And of course, last year, everybody was hard at work to define our path forward, to formulate what will be right for Seatrium in terms of asset, people and what do we invest in our core assets. Now we first started to ask ourselves what do we want to achieve? The vision has definitely to be a global provider of solution not just in the jack-up industry that some of you asked me, right? It is an oil and gas also in the renewable space where all our customers and the countries that we operate in, that our customers operate in are undergoing tremendous pressure to do to carry out the energy transition. And most importantly, we want to be a profitable and a resilient business. Now the environment that we are working in today with the multipolar we're developing, it is a delicate balance for our customers and also countries to balance the energy trilemma. In each of the corner, we have sustainability, security and affordability. Sustainability, of course, we want to be a responsible business, but it's more than that for Seatrium. Sustainability is actually our business. This company alone is responsible for 13.88 gigawatts of offshore wind energy. Just a comparison of scale, Singapore total generating capacity is 13 gigawatt. So Seatrium is a builder of critical infrastructure for the energy transition for the world. Energy security. Today, countries and our customers still need to continue to extract hydrocarbon. But the twist to this is that we are involved with our engineering capabilities with our customer to take a look at how do they extract a lot more responsibly and sustainably. We are putting technology like digitalization, electrification and also optimization of processes and carbon capture in order to extract responsibly. Now affordability. Though we are not the cheapest, but we create value for our customers. Why do customers continue to come back to us? And they'd own our share. The range of customers that continue to One Seatrium to add value to their pursuit is an important result of customer centricity. We continue to produce asset on time, on budget and safely. And that's our hallmark. So saying then, the strategic review allows us to have a clear view of where we want to hit, a clear and focused strategy to share with our people, our partners on where will we be focusing and pursuing. Now we need to have a balanced portfolio that's driven by different underlying market trends. We used to be one product-centric and very susceptible to market swings. But if you take a look at this, oil and gas, we will reinforce our leadership in this area in the production asset, but also to help customers in this category to decarbonize responsibly. Offshore wind. As I mentioned, the fixed bottom offshore wind market is no longer nascent, all right? While we have clocked again the magic number, 13.88 gigawatt, we are very proud of that, even -- and we'll continue to build on that number. But we are also looking at technology that will allow us to explore what are the IPs to generate for the floating wind when it comes nearer to the end of the decade. Repair and upgrades. In our engagement, all of you are very passionate about this market. You always ask me about what are we going to do about this. Repair and upgrade continue to be a very strong baseload for us. Just last year alone, it actually contributed to $1 billion in revenue. And this market will continue to grow because with IMO aggressive targets, through the MEPC 80, we see that many of our customers, shipowners, will have to basically decarbonize their fleet in order to be relevant to operate in the new world. CCS and new energy. This would be a nascent area that we're looking at, but the DNA for Seatrium has always been factfinding and technology foresight. So we continue to invest in technology. We continue to take a look at new end-to-end business model and at the same time, how do we unlock opportunities through the technical know-how that Seatrium is known for. Now one of the questions that I always get is, so what is your competitive advantage? Are you the cheapest? The answer is no. But Seatrium has a value proposition that is defined by our track record, is defined by a returning customer and is defined by our history of factfinding. We have a proven track record of 1,300 proven successful deliveries. The One Seatrium delivery model is going to differentiate us. We used to be very strong in verticals. Many of you ask what is the capacity of this yard? What's the capacity of that yard? Are we full? Today, Seatrium operate globally horizontally. This model will allow us to understand what is the strength of each of our facility and also our partners in order for us to scale the business. Within a short one year, you have already witnessed how we basically scale our order book. And we'll continue to move in that area, and I'll give you some examples later. Global technology centers. Technology is the key. Being a solution provider, we need to understand what are the problems that our customers face and what are the solution and the value add that Seatrium can give in order to solve the energy transition puzzle. We have technology centers all over the world, in Europe, in Asia, and in the U.S. and Americas. So we'll continue to use this as a proxy to partners and technology foresight. And again, there's a question about what's your access to talent because many of you think that we are a yard. We're actually a global business with global access to talent worldwide. Today, there are 29 nationalities within Seatrium, and we'll continue to grow on that and develop our global pool of talent. Strong relationship with new and repeat customers. This is not new to us. As mentioned, the value that we generate with our customers is the most important. At the end of the day, customers look at us about certainty, especially in the new uncertain world. Customers look at us whether we can solve their issues, whether we have the project management capability worldwide to give them an end-to-end solution to the area that they're operating in. If you take a look at our proven track record, it's not just about numbers, it's not just about how many projects that we clock. But if you take a look at all the verticals itself, they are not new to us. Even in oil and gas, we started in the 1960s for our first jack-up. After that, there's no turning back. We reengineer ourselves, we adapt ourselves, we provide solution to the customers. And if you take a look at the first FPSO conversion, first FSRU conversion, the first FSRU was done in 2007. Today, it's a commodity. And we'll continue to do that. And in the other areas, offshore wind is not -- is no longer nascent to us. Customers come back to us for solution around how they need to scale the renewable business. And we are very -- we're ambitious in trying to capture the market share for this part and also on the repair and upgrades. Later, my colleagues will share on these different verticals, these different horizontals itself on where we are heading towards and why are we the #1 in the business. One Seatrium delivery model. Again, when we take a look at the products that we are building, I'll share the 2 clear examples that you are used to, but this is something that -- we worked hard at for the last one year. Integrating processes is one, and we are not integrating just 2 companies. We are integrating many multiple yards worldwide. And in order to do this, the result is our ability to scale the business. If we were to do yard by yard, we will probably be able to do one after the other sequentially. But today, we are able to scale our business. And going forward, this will be the model. And what we are doing today is to have center of excellence, meaning to say that different modules, different parts of the projects are done repeatedly in certain part of the yard and our people will lesson-learn and be more productive. And it also delivers synergies. One of the biggest question that was asked, is there going to be big CapEx in building more and more yards. When we combine and integrate as 2 companies, we take a look at what are our strategies, individual strategy and then map it to our One Seatrium delivery model. And the results are synergies that we can harness from this operation to put the best in class to build certain component of the projects. And of course, this is also augmented by strategic partners and outsourcing, partners with the same thought process, same culture and the ability to deliver to us as expected. And with our global footprint, Seatrium is the pioneer, setting up production centers to solve problems when local contents are required. Moving forward, when you talk about renewables, offshore wind market, a lot more localized integration will be required. For example, offshore wind foundation. You cannot build the whole thing in Asia and ship it all around the world. And we have the track record to help customers understand what are the pitfalls and what are the advantages that we can provide. And moving forward, it's going to be a global outreach. We will have our partners to actually extend the tentacles of Seatrium. Now let me give you a quick example. You're all familiar with the P-Series. How are we able to have [ 4 ] in our order book today? Of course, there are partners that build the hull. But if you take a look, we built our modules in our overseas yard. And what we do over here in Singapore in our premium facility is actually less than 30% of each project. What we do is the integration work, which is complex and highest value. In that sense, I'm able to multiply the capacity in Singapore and continue to build multiple modules. And then, of course, our local content. We have 2 of the most capable yard with the best track record in integration and commissioning of all these products. And this will continue to allow us to scale. The other one is the 2 gigawatt program. We have our customers who are willing to share it with us, to take 15 months to totally engineer the product and construct and lesson-learn the first one in Singapore. Subsequently, knowledge transfer, lesson-learned, we will build the whole franchise in Batam. Again, that will allow us to scale again 2 gigawatt, 1.4 gigawatt that we have done, 900-megawatt that we have done. This repeatability is a very powerful concept that we are creating. And as I've mentioned, repair and upgrades. This is a very, very interesting part of the business. We differentiate ourselves with the ability to project manage complexity, input technical know-how, engineer the best way and incorporate constructability. Because moving forward, when you are to decarbonize the whole maritime business, the fleet, the total fleet of our customer will be affected not only on efficiency, not only on digitalization, but also on alternative fuels and new fields that decarbonize their fleet and not to mention augment it with CCS on board. We have a global network, and we'll continue to scale that and outreach that. A lot of this business is dependent upon planning. It's also dependent upon the trading route. So what you have seen us announce is partnership with our customers to take a look at what's their fleet planning program, to give us ability to plan when the ship comes in and when it goes out quickly. Not to forget, technology. When we went on the path of looking at core and noncore assets, the key focus was really to be able to identify where do we invest in technology in our core assets. We won the yard of the future, where there are smart features in it, the assets that we built in to make them smart. But all this, most importantly, is to empower our workforce and make them more productive and more satisfied with their career. And this is not new. We have already started condition-based monitoring in our asset. We have already started AR-assisted remote inspection that helped us a lot during the COVID period, and we'll continue to do that. And we'll do that worldwide with the chain of horizontal linkage of all Seatrium yards worldwide. Technology and IP. This is an enabler. This future-proof the Seatrium future through innovation and technology development. But our focus is to commercialize, not about a dream, it starts with a dream, but it ends with a business case. We have centers of excellence, technology centers globally, and we'll continue to use this as technology foresight with our customers. They are in different location in order to provide solution and IP-protected solutions for them to overcome the energy transition problem. I'll give you an example. When we talk about floating wind foundation, floating wind, we believe that it will come as part of the mix at the turn of the century, but the work starts now. We are doing investment into designing floating wind foundation, putting constructability into it and how can we solve this problem for our customer. The video you see here, we're actually already basin testing all our solution in the lab with our partners. And where this will be is that at the end of the day, is what we mentioned, there will be local solution for most of our customers. But this would be a series built, and this will be something that will work with our customers when the economics of this comes along. And the rest about future and factfinding. These are not new. We've designed the first liquid hydrogen-powered ferry that's already operating in Norway. So the bottom line is that we will continue to explore technology with our customers and continue to give them solution in their very peculiar problem statement. This is our key. Our diverse talent pool that we are able to develop and reach out to. Today, Seatrium is made up of 29 nationalities. One in 5 are women, and we can do much better in this. We'll continue to take a look at how do we propel engineering, technology, problem solving and most important is execution excellence. We will execute the strategy that will propel Seatrium to the next level. And customer, customer, customer. If you take a look at our profile of customers, many of you have asked me the question. So how do you compare? And we always measure ourselves with our customer return. Do they return? And what do they put with us? If you take a look at it, it's not just about oil and gas majors. Basically, even renewable majors, even ship majors -- shipping majors. They have signature with us. We have almost every single majors having a project with us today. Why? The key thing is value proposition. Global delivery. On top of that, we are able to be a solution provider. And we'll continue to see them looking for solutions not only just technical, but also on how do we construct more and more complex and larger assets in a very predictable and a safe way. And ESG. We will conduct ourselves with the highest ESG standards. Given that we are a global business, we align the group with a culture and also a standard that benefits all our employees to align them on how do we operate a global business. For E, as I mentioned, sustainability has not just been a responsible business. Sustainability is Seatrium's business. We are a critical -- builder of critical infrastructure for the world to energy transit. Although we have a net zero target by 2050, it is actually limited by the geography that we operate in. We do not limit ourselves on how fast we go because of this goal. Take, for example, in Brazil, all our operations are powered by hydropower because it allows and there's available green power in Brazil, and we'll continue to push that boundary. On the S part, the key one would be to care for our people. All our employees should go home safe every day. And we're glad to share that in 2023, we maintained zero fatality rate. But safety is a daily challenge and your record starts every morning. So we'll continue to do well and do good for our people. Now for G. Seatrium will adhere to the highest standards befitted for a global business. Governance, compliance and risk management is not an afterthought. It is part of our business. And we have implemented the integrated assurance framework that will take care of all the risk and compliance issues and you'll be critically debated not only at management, but also at the Board. Now, I guess, before this session, a lot of the discussion is around this slide. Many are already egging us to overperform. Well, not to forget last year in 2023, we are still in a net loss position. And this, to me, is a very, very ambitious target. We are not giving any projection. We are saying that this is a stretched target that we are building the business to hit towards. And remember, the team. We are building a profitable and resilient business. We aim to target to deliver EBITDA of more than $1 billion. Consistently. And the full of last year when I engaged all of you, many of you asked me, how about your ROE number. And we're saying that ROE number will come. We target to return more than 8%. And of course, to keep us disciplined. But at the same time, balance between investing in the business and total shareholder return. We keep -- we want to sustain a net debt-to-EBITDA level almost constant. Then the next question has always been asked. So how are the management kept in check and aligned with this target to achieve this target? This is in our scorecard. More than 50% of our scorecard is on financials. We talk about order books. We talk about profitability. We talk about cash management. We talk about balance sheet. But there are many other factors to deliver a resilient business. We talk about people that I mentioned. We talk about operation. The key thing moving forward is operational excellence. Deliver on what we promise, deliver on what we predict. So this is the key with the integration. We want to unlock the value in Seatrium. Value creation for shareholders. Without saying the business has to return to the shareholders, and we thank our shareholders for being very patient with this part of the business. ESG is one of the key focus, and it's been part of the business and part of the strategy. We have already been able to demonstrate that actually ESG plays a big part in Seatrium strategy moving forward. And today, we are already in play through the whole cycle of energy transition, and we'll continue to build on that track record. So the key takeaway. It is only one year since we merged, and we have achieved a One Seatrium global delivery with returning customer, believing in that and giving us business to help them solve their problem. We have core values and now we have an organization with a shared purpose, and we want to build a profitable but a resilient business. And we want to be sustainable as a business, responsible as a business, where we take sustainability as a business. And we'll continue to transform our business, focusing on total shareholder return. Adrian will share the metrics that will help us achieve that. And I will catch up with all of you during the Q&A session. And I will touch base also with all of you. The setup today is all about experience. I hope you enjoy the experience that the team has worked very hard to put up for you, and we'll catch up during lunch in [indiscernible] Thank you.

You guys had a very fantastic presentation on our strategic road map, direction and focus. Today, I'm going to talk about financial and capital management. A very good morning to everyone. A lot of familiar faces. Some goes back many, many years when I was wearing different hats. So very good to see you coming out to the West. In this segment on financial and capital management, I'm going to share Seatrium's financial road map, which entails 3 points: firstly, our path to profitability; second, how we will have a resilient balance sheet and optimal capital structure to support our business through cycles; and third, how we plan to allocate our capital for growth. Our path to profitability starts with revenue. In the early 2010s, the combined revenues of KOM and SCM averaged $9 billion to $12 billion annually. Both companies were primarily dependent on one product, drilling solutions, resulting in volatility and high correlation to the oil cycle. Today, we have diversified our revenue stream, primarily across oil and gas and renewables, underpinned by a strong baseload of repairs and upgrades. In the next 5 years, our revenues will be higher and more diversified. While revenue -- whilst renewables is still relatively small compared to oil and gas in '23, we expect it to grow exponentially to be comparable to our oil and gas business in 5 years' time. Oil and gas contributed the bulk of our revenues last year. As we see significant opportunities in the near term, we expect oil and gas revenue to remain sizable even 5 years out, although the contribution to our overall top line will be smaller. Repairs and upgrades will grow steadily as we expand our global reach along shipping lanes and increase our value-add per vessel. Lastly, while revenue contribution from new energies and carbon capture storage looks relatively immaterial in 5 years, we are very excited by the potential opportunity from these segments and we expect its contribution to increase post 2028. By 2028, Seatrium targets a turnover of $10 billion to $12 billion, with a more resilient and diversified portfolio, with improved contract terms, which includes better risk sharing with our customers and improved cash flow profile with milestone payments. On the back of our higher expected revenue, our first target is to achieve higher and sustainable EBITDA of $1 billion per year or more. This will be realized through 3 levers: one, delivering on our legacy projects, a bulk of which will be completed this year; two, higher margins from more productive and efficient execution, enabled by our One Seatrium delivery model; and three, a more streamlined and rationalized asset base, leading to an optimized cost structure going forward. With higher profitability driving higher returns and more healthy cash flows, we target to achieve a return on equity of 8% or more and net leverage at around 2x to 3x through a cycle. A key driver to improving our EBITDA margin is the financial discipline in ensuring that new orders across all businesses meet our project [ holo ] rate of mid-teens gross margin. Coupled with synergies from the combination and further cost optimization on cash and CapEx, we expect to see margin uplift over time. The merger has allowed us to realize savings from synergies and cost optimization effort as one combined entity. We are implementing $300 million of savings, which we expect to fully realize on a recurring basis by end 2025. These savings were identified across a wide range of items through a comprehensive bottoms-up process and some examples include: one, standardized pricing terms with our customers; two, reduction in overheads, such as removing duplications; three, a more disciplined corporate spend, volume pooling and more efficient processes of doing things; and lastly, asset realization. To date, we have also additionally identified procurement savings of $200 million from existing projects to be realized progressively as projects are executed over the next 4 years. These savings are driven by 2 key factors: one, centralized procurement, including volume bundling and pricing harmonization; second, improved supply chain management, leading to better project margins. However, these savings are just the beginning as we continue to thrive and evaluate further opportunities for synergies and opportunities to do more across our businesses in the coming months. As you may have seen in our '23 full year results, we successfully strengthened our balance sheet and improved our liquidity including the early collection of more receivables. With the support of our lenders, and many of you are sitting in the audience and online, we secured more than $3.5 billion of new loans, refinancing and trade financing. And we recalibrated our debt profile, with average loan maturities extended by almost 2 years. Our balance sheet is now more robust, with net debt of less than $1 billion, ample liquidity of $2 billion to call on to support our operational needs. In addition to our financial discipline and ensuring that new orders are on progressive payment terms, thus reducing working capital requirements and contributing to our target of sustaining a healthy leverage ratio. As such, we will continue to maintain a very disciplined approach to cash flow and liquidity management. Looking ahead, we will continue the good work on the capital management front and proactively manage our balance sheet, including pursuing bilateral and syndicated financing. So many opportunities to engage us from the banking community. As we build our strong track record of financial performance, we will tap the capital markets in the near future, keeping in mind our overarching aim of maintaining a strong credit profile with net leverage between 2 to 3x. This allows us to achieve a capital structure that balances resiliency whilst optimizing our cost of capital. Given our greener order book and ESG targets, we are also seeing increased appetite and interest from lenders to provide sustainability-linked or green financing to Seatrium. For example, in the past year, we successfully secured a $400 million green facility from UOB, in addition to our other sustainability-linked financing from DBS, OCBC, Standard Chartered and others. For those banks that I did not mention, you have one more year to get your names on our books so that next year in our CMD, your names will be loudly mentioned in this presentation. So again, it's an opportunity. Our target is for 50% of our borrowings to be sustainability linked, all green in 5 years' time, anchoring our ESG commitments, up from 35% at the end of last year. While we exercise financial prudence, we will not shy from deploying capital in a disciplined manner to achieve our strategic goals. Over the next 5 years, we will continue to invest into 3 key areas: first, investing in capabilities to support our business growth and increase productivity, such as investing in load-out capacity for the execution of more HVDC projects in parallel, workflow digitalization and artificial intelligence to improve execution and productivity; two, targeted acquisitions that can accelerate our breakthrough into new growth engines, including new energies and carbon capture and storage solution; and third, once we are able to attain a sustainable level of profitability and growth, we will look to increase total shareholder returns through dividends and/or buybacks. These capital needs in turn will be supported by the following 3 items: firstly, a wider, more diversified lender base and capital markets access; second, positive cash flows from delivering better margins and securing progressive payment terms; and third, capital recycling from the monetization of our noncore assets, inventories and intellectual property rights. To sum up, I would like to again reiterate 3 points: firstly, we have a clear path to profitability, and that is a very important message, and achieving our financial targets; second, our balance sheet is stronger than before, with a healthy debt maturity profile and ample liquidity to support our growth; and last but not least, we will work towards enhancing our investment profile and delivering enhanced total shareholder returns to our stakeholders. Thank you very much for coming today. Very happy to answer any questions during the panel discussion. Please enjoy yourself, enjoy the view, and I'll speak to you later. Thank you.

And a very good morning to all of you. It's great to see all of you here today, and give me a chance to share with you Seatrium's business in the oil and gas space. Now let me start off talking about the global energy trend. In the coming decades, the escalating geopolitical tension such as the ongoing Russian-Ukraine and Israeli-Hamas conflict, OPEC's announcement to extend production cuts and the rise in energy security concerns has all reinvigorated the search for more hydrocarbon. As a result, the oil and gas industry is turning to floating production system to develop new projects. From the peak upstream investment of close to $900 billion in 2014 to the current level of around $580 billion, there's a need to increase the E&P investment to around $640 billion annually by 2030 to meet our future demands and offset declining production. Cumulatively, we are talking about $4.9 trillion that is needed between 2023 and 2030 to meet market needs, even if the demand growth slows down to a plateau. Now in the current scenario, the global oil demand is forecasted to peak at 102 million barrels per day before 2030 and begin a slow decline to around 97 million barrels per day by 2050. Even with a further accelerated energy transition scenario, oil and natural gas are still projected to meet more than half of the world's energy need in 2050. And based on our research, the key basins in Brazil and Guyana will continue to be -- to present new opportunities, and FPSO in particular are attractive as they are proven production assets in this area. And hence, offshore deepwater oil remains attractive in the near to medium term. My colleague, Alvin will touch on the LNG market later on in his presentation. Well, when it comes to the track record of Seatrium, I think this is second to none. Right? I will touch on a number of salient ones. The FPSO, FSO, as the first shipyard in Asia to convert a tanker to an FPSO in 1981, we have since advanced to complete the most number of FPSO and FSO in the world. We have also delivered a number of milestone RPU projects, from the series build franchise of the Petrobras P-52, P-51 and P-56 project, where P-56 was completely built in Brazil, with high local content of between 55% to 65% and where the first marine meeting was carried out of the top site in Brazil. Shell Whale is another FPU project where a game-changing methodology was implemented. The entire top side was erected using our 30,000-tonne gantry crane in a single lift, truly amazing. We have also delivered the world's first FSRU conversion, the Golar Spirit in 2008 and the world's only 2 FLNG conversions: the Hili and the Gimi back in 2017 and 2023, respectively. And with over 400 newbuilds offshore drilling rigs delivered, Seatrium is by far the world's leading designer and builder of offshore rigs. And more than 60% of the offshore rigs built in the world today are Seatrium's proprietary designs. We have over 90 high-performance proprietary designs that will cater to a broad spectrum of operating conditions and specifications. And since the '70s, we have been providing turnkey fixed platform solutions to our customers in Asia Pacific, Middle East and the North Sea. And as you can see from our solid track record, you'll see that we have won the trust and confidence of our long-term customers as the preferred partner for our projects, with high level of quality, reliability, safety, and of course, project turnaround. Well, next, I will touch on our FPSO market opportunities. Over the next 5 years, we are expecting to see over $150 billion of CapEx on FPSO to support the offshore oil and gas market. The South America represents 60% of the global investment and Brazil is expected to continue to lead the market with 12 FPSO, mainly coming from Petrobras and other IOCs. Seatrium has a strong footprint and operating heritage in Brazil. This enable us to understand our customers' requirement and fulfill the local content. And this is where the first -- the Seatrium -- the one Seatrium delivery model will come into play, right? And this is the one that provides us to win the strong competitive edge to win new contracts as we are able to scale and fabricate across our network of yards, including our partner yards in Asia and we are able to integrate them in Singapore and in Brazil. And in fact, Seatrium have 60% to 70% of the operating yard capacity in Brazil. This will allow us to fulfill the stringent local content requirement, and this is what sets us apart from our competition. In addition, our Nantong yard and our Singapore yard are also production center of excellence for our module fabrication for FPSOs. Besides FPSO that I've touched on earlier, we are also looking at various market opportunities in other production assets such as FPU and FLNG and FSRU conversions that Seatrium is well known for in the market. Seatrium has built a strong franchise in the series built FPU projects for Shell and the Shell FPU is conceived as a replicable project to leverage on Seatrium's top site one single lift integration methodology following the Vito and the Shell Whale newbuilds, and benefiting from the operational synergies. This is certainly a game changer for FPU project execution. Seatrium is the World's #1 in FLNG conversion and the only organization in the world that have delivered 2. Our proprietary FLNG conversion solution are quick to market and promote circular economy, resulting in the reduction of GHG emission by up to 33% on average compared to newbuild option. We will continue to capture opportunities and built momentum in the gas value chain to expand our FLNG conversion franchise. And to sum up, Seatrium has established a strong track record and market reputation in the oil and gas business. We believe we can continue to reinforce our market leadership in oil production assets as a turnkey solution provider of choice, focusing on serious build opportunities in FPSO, FPU and others for greater synergies and project repeatability. We will pursue new EPC opportunities from other IOCs and NOCs, leveraging on our P-Series orders to develop EPC, playbook and project management capabilities as we scale up. We will continue to build our momentum in the gas value chain with a focus on FLNG, FSRU conversion that contribute towards reduction in carbon footprint and a faster to market for our customer with high level of customization and bespoke solution. And last but not least, we will leverage proprietary designs to strengthen our track record and develop environmentally sustainable cleaner solutions that incorporates decarbonization technology and electrification features. Thank you very much.

Good morning, everyone. I'm Samuel here, and I'm going to share with you on Seatrium's offshore wind business. My coverage will be on the market, our products and also on our competitive differentiators. The global offshore wind market, it is forecasted to grow strongly from now to 2040s. In this decade, the main play is on fixed wind solution. And coming towards the end of the decade, we're going to see the floating wind solutions come into play. And that's where we believe there's also going to be a tick off from there. This growth that we -- that's being forecasted, it is supported by strong fundamentals. Basically, it is underpinned by the commitments of the government to green energy and energy transition. Yes, I know that among you all here, we know that there are blips in this market right now. There are project cancellations and project delays. However, we see that there is the will among all the key stakeholders to come up with solution so as to move the development forward and the projects forward. Take, for example, in this first Q on the New York off ground, the PPAs or the ORECs that has been awarded are the revised ones, and they reflect the rising cost. And another example is on the U.K. market. The CFDs ceiling has also been revised, and that is to reflect the rising cost challenges. So all these taken together, it bodes well for the offshore global wind market. Our Seatrium offshore wind business has 3 products. The main one, which is the biggest, it is our fixed substation. This is our bread and butter right now, right? We have a strong track record of executing and delivering these projects. In fact, I would say we are the leaders. For WTIV, we are pioneers. We designed and built the first one in 2012. And currently, we're executing 2. For the offshore wind solutions, yes, it is about the future. But then what we are doing now? It is preparing ourselves for commercialization so that we are ready when the market opportunity comes. We are leaders in the fixed substations. And our leadership is reflected in the strong track record that we have in terms of delivery and execution. And this leadership is also recognized by the top-tier TSOs and developers. They recognize our leadership and they entrusted to ask their projects to execute and to deliver. In addition, these leadership is also recognized by our HV partners. They are very comfortable working with us, these top-tier players. And we, in turn, are very comfortable working with them, working together to deliver the project successfully. And lastly, if you take a look in terms of how we started from 2009 to now, we have seen that we have grown many folds, and it's not just in terms of the number of projects, but in terms of the skill and complexity, how is this possible? It's because of our ability to execute and deliver underpin by our one Seatrium delivery model. This attests to our leadership in fixed substations. We see a huge market opportunities for fixed substations in the key markets that we are in, in Europe, in Americas and Asia. So how do we maintain and grow our leadership and penetrate these markets further? We have 3 key success factors that enable us to do so. The first is that we have the presence in all of these regions. What do I mean by that? It's basically having a base that is already there, that's executing, that's operating. And from there, we expand it further and penetrate the market. We have ORS U.K. in Europe. We have NFL in U.S. We have [ blast cells ] and drawn our cruise in Brazil. And our very own Singapore hub for Asia. Second, the second success factor, it is we have the advanced yard load out for these mega platforms. We belong to a very exclusive class of the fuel in the world that have these facilities because this is the key criteria for our clients when they entrust the project to us. And in fact, we not just have only 1 of this facility. We have 4. Two are currently in use, 1 in Singapore and 1 in Batam. And there's another plus 2 where we have 1 here in DC and 1 in Batam where the facilities is ready to be upgraded. So all together, we have these 4 facilities. And this gives a lot of flexibility for us that to meet especially to the needs of the schedule of our clients, the TSOs and developers who entrust these projects to us. And I will say, too, we are the only one among our competitors who has these 4 facilities. None of our competitors have this. They may have one, they may have two, but not this four. The third success factor, it is our global execution model with end-to-end EPCICM. Global execution basically is where we execute well the projects underpinned by one Seatrium delivery order. And for end-to-end EPCIC, you can see that there's added on M. The M is where the maintenance part. This is an added value, a benefit which our clients are able to see. Why is that so? We are the designers and builders of these substations. So it made a lot of sense for us or the client for us to continue to care for their substations when in operation. So taken together, these three factors, the combination of it, I believe, Seatrium, honestly is second to none. None of our competitors, whether it be in Korea, whether it be in Europe, whether even for the Chinese, they don't have a combination of these 3 success factors for fixed substations. They may have 1 or 2, but we are the only ones who have 3. And that set us apart to be in the league of our own. In addition to the 3 success factors for our fixed substation, we also have strategic initiatives for our products to continue to penetrate these opportunities across the global offshore wind market. Two of that is with the fixed substation. We are looking at repeatability, series builds fixed substations. And this repeatability, it is a value benefit for the clients because it gives them predictability and certainty in terms of schedule, quality, safety and their budget. And of course, these benefits also is spread towards all the key stakeholders involved, including ourselves who are the executor. The other point, strategic initiatives for fixed substation is Brazil. Brazil, we see that there's a huge opportunity for fixed substation. You don't see right now but it is an emerging market. And we, as Marlin have said, inherently, we have a big advantage. None of our competitors have such a presence in Brazil, and we're going to write on it and build on it so that we can be first movers when the opportunity arises, and we want to dominate this market in Brazil. For the WTIVs, our strategic initiative is more down to earth, it's quite simple. We are only going to design and build WTIVs where the clients can recognize and appreciate the value from us. It is going -- this project has to be equitable for us in terms of returns, in terms of risk, and in terms of cash flow. We will design will not just for proprietary design but also with other designs when it's required. Floating offshore wind solutions. Our last initiative is on commercialization, commercialization and commercialization. And it's not just about the design, but it is about putting in place the production model. And this is with the aim when the opportunities arise. We are there to seize it, and to seize it not in a small way but to seize it in a big way. That is the -- thank you for everyone. That is the end of my presentation. And I'll be happy to take your questions later on in the Q&A and also in -- when we're discussing over lunch. So thank you.

Good morning, ladies and gentlemen, and many of you I've just met first time today. So happy, weather is super, it's a beautiful day. Welcome to our Tuas Boulevard yard, our flagship yard for Seatrium. Now you have heard about team earlier on driving our strategy, our ambition in mega EPC front. Let me before I start my presentation paint you a picture ahead. You coming back from overseas, there is the plane just landing into Changi Airport, you look out the window, you look at the thousands of ships docked in the sea at the southern coast of Singapore. Will you not be amazed by how beautiful this site is. That is the opportunity we see in Seatrium. Now if you look at the thousands of ships, you multiply it by many thousands. That is the scale, that is the global fleet that brings the trade 80% of the goods around the world every single day. There's about 118,000 ships doing that work. And with that, these ships requires maintenance like our cars, requires upgrading when you intend to change the sport streams. Then we need to go to the COE renewal at the age of 10, that is where you get the life extension, you get your conversion and things like that. So these lines, it just captures some of the essence of what we are trying to do in the repairs and upgrades. It's a huge market size of close to $30 billion per year. And with the maintenance portion, with the life extension portion, we are sitting at the strategic location with track records what we have just heard from our team about the ability, about track records, about performance, about reputation, these sits so well. And we, in the repairs and advice team is driving that idea, the agenda. Now earlier, I mentioned about the 118,000 vessels that trading around the world. We also mentioned and heard from our team about the decarbonization, the bass word, that is driving the market, the climate agenda. The shipping community, the 118,000 ships contributes to 3% of the global emissions that tells us something. If you don't do anything on the gray line, the emission we will never achieve. But fortunately, at the recent IMO milestone date set for net 0 by 2050, that accelerate every single urgency of technology, of ambition, of investment by ship owner to get their ex ready. Again, that is opportunity for us. And we are at a very forefront of the position because this at the end of the date is our bread and butter. If you remember, like 5, 6 years ago, there was this drive about NOx and SOx. Seatrium delivered close to 200 set of scrubbers, ballast water. That is the kind of value scale and the solutions we are able to for our partners. And I will explain why I keep -- I'll keep mentioning about partners in this segment. So just again, to say regarding the number of ships that requires the retrofitting, we estimate about 58,000. Of course, there will be shipped that going through scrapping and things like that by 2040, but the value estimated is $90 billion. So that is the size of the market. Now this is a story I tell regarding what we do, providing the comprehensive suite of solutions for regular maintenance, upgrading, life extension and conversion. This particular beautiful ship here you see on the screen, we started the basic maintenance for her when we won the contract from the Japanese shipyards. It was $2 million. And I came through big upgrading regular maintenance $5 million, life extension, $30 million, conversion, another $30 million. If you look at the entire life cycle of this ship, Seatrium, we have been able to capture the value of up to $100 million for one single ship. Again, I need to qualify, not all categories of ships are going through this kind of expensive life extension because they are expensive ships. They are carrying a cargo of minus 163 degrees. Therefore, they are special. And I'm very pleased to say Seatrium converted her as FSRU. She is now 33 years old, working very well in Brazil for another 20 years. So the entire life cycle of the ship is by us. We are the home doctor. The term we use to say we service our partners' assets. We know, we diagnose, we provide engineering solutions. We say, look, what are the plans for you to keep your technology, we can do it for you, in-house, one-stop solution end-to-end. Now this is the slide to capture some of the -- why we are a leader. We are leaders in the LNGCs. If you look at this impressive track record since 1979, we have docked about 935 repairs. On average, we are doing about 7,000 to 9,000 ships LNG. We are the world #1. A pioneer in FSRU/FSU conversion since 2007, 20 of them, and we are very excited to -- we'll have some good news to share in this front, but this is a segment where -- because the ships are expensive. The ability to then for owners to continue to convert and utilize, repurpose the ships, it is more relevant. Therefore, we have this -- we are able to capture this market well. Asia's leader in cruise ship. Later part, you had experience to visit the ship, but I'll explain in detail because earlier on in [indiscernible], some of you are very interested to know what the intricacy of discount, I'll explain in the next slide. Regional Navy MRO strategic partner. We have been the -- like a strategic partner for the U.S. Navy, Singapore Navy, and very soon, we can have a few more. We will share with some of these news with you as we come. In terms of alliances, we have 26 best-in-class. They are the best in their business, BP, Shell, Chevron and the cruises are -- we are a long-term exclusive partner with the 3 cruise groups, which among the 3, they control about 15 big cruise brands, mega cruise brands, so they are all exclusively talking with us in Singapore. And again later part I'll share with you why. So these are exclusive clubs, and we are looking to explore to see expand be very clear about how we can work on win-win, how we can then -- after you partner with that exclusively, you offer the Seatrium 1 stock solution to them. And you are always -- by doing that, you are the front mover of many of the technology fund in retrofit, for example, therefore, you are able to expand and capture higher value. Now competitive advantages, deep partnership is how it brought us today. We are able to build trust to say, look, I got this technology I want to put on a ship. We say, why don't you come to ask one-stop solution. We have deep engineering, we are able to engage OEMs, equipment manufacturers. Why do you need to go to every single source for doing that? We can do it for you? And by doing so, you're able to cut down the time, you are able to better plan, we are able to better look at the -- optimize the whole concept. That is why the concept of alliance search, favorite customer contract is so attractive to some of these leading shipping folks when they wanted to come to -- either talk to us about long-term partnership. We have exclusive agents or marketing representatives at the key markets, say, by example, in U.S., Europe, Australia, in the Mediterranean. Those are the key markets. They continue to meet our powers on the ground to understand the customer. For example, in Japan, the culture requires certain communication locally. And then those are the sensing, the feedback that we get, first hand, very important. Now Singapore, needless to say, we are the leading reputable hub with proven track records. I will not explain -- I will not go deeper into it, but I'll explain something any bit, capable executing model. And the other reason why customers always choose Seatrium is because of our safety, project execution and the cost optimization. We are able to think on behalf of our customers. We are experts in high-value markets in gas and offshore and things like that. Now let me look at these 3 or 4 circles here. I'll pick 3 to talk about each individual unique segments, the kind of unique elements differentiating from 1 to the general, say, a general kind of conventional cargo ships. Now LNG, we broke through this market 25 years ago. It was all about how do we do? Can we do something different for our competitors. This market was all Japanese market. And you are so high end, very complex. It requires perfect project execution, perfect process management, perfect cleanliness on the ship because once the cargo tank gets dirty, the $100 million cargo will be rejected. So the process of the cleanliness of doing project management is so key in this segment. And along the way, you can see earlier, 935 vessels to date is impressive. Now on the cruise, many of you where we engaged this morning and talk about some of these elements. If you think about ships, if you think about cargo, you think about oil, goods, iPhone, cars. But this segment includes the cargo is probably you and me, the passengers. Navigator sees 3,800 passengers. What it means? It is about experience, leisure. You go to the cruise, you want to have that full suite of experience, everything beautiful, clean and sexy. What it means as a service provider? Every single time when we carry a job like this, it has to be perfect. It has to be timely. It has to be -- it has to be 24 hours -- from start to finish perfect. Just look at this vessel right now here. She's now dry. Dry means is coming up and see in the dry dock. Imagine the entire hotel services need to be running when she's dry, there's no water, no sea, that is the magic of Seatrium. We're able to provide the service to be able to cater for the hotel management, for example. Think about another scenario. We have all this at the back end the theme parks. And then the cabins, you have car pads, you have your furnitures, you have odd accessories, need to go to very specific rooms or the restaurants at the hall. And sometimes when these kind of cruises come here, it requires 700 or more 40-footer containers to be managed. Each container has got a specific item for which cabin, for which restaurant, for which captains and things like that. So just imagine, a 25 days operation, it has to be mega, mega, precise. That is how the scale of things that we are looking at. Within 25 days, it's not a year, 25 days. So that is -- then you multiply by the need for them to come in every 2.5 years or 5 years to do the kind of job. Again, the opportunities for Seatrium is so huge and that we are perfectly positioned because our -- the size of our doc, our team, knowledge, project management, our safety performance and the entire ecosystem that carries with it. It is so unique. Now the Navy. The Navy, why is the U.S. Navy, Singapore Navy it choose us as exclusive partner. Nothing but the ability for us to say, provide the safe environment, looking at the security element of the vessels. So in this space it's also quite exciting because we're going to have a few more regional Navy coming to us, and sometimes it's also geopolitical. We have seen more and more ship coming and say, we thank you very much, we like more. So this is the opportunity for us. FPSO, I think earlier, our team has elaborated a lot more on this space. So this is exciting part of it that we are able to offer the end-to-end solution, one-stop solution by building on what we call the deep partnership. So before I leave -- my presentation ends here, but before I leave, I would like to leave you 3 things on how we are able then to provide the baseload. Are you typically, it just is providing the steady base load for the group. Now 3 things, how are we going to do it? We're going to scale the franchise globally to extend our long-term partnership arrangement with customers throughout our other footprints, yet along the major ship, shipping line like Philippines, America, for that matter. Pursue higher-value projects in key markets. Yes, we see the opportunity there. The vessel get itch, you get the accelerated value in some of these bigger jobs. Now the carbon or capture -- decarb space is exciting. The decarb space, we will see closer to the decade -- end of the decade, this thing will accelerate because of the time line by the IMO. That is for sure. So how we do it well? We then fall back to what I have mentioned earlier, continue to build that deep partnership with our customers. I'll share one more example if you time allow me, the LNG side, the relic, the lower carbon -- the lower carbon relinked retrofit. We were able to do a series with our partners. The first one, it's a multiple of tens of millions, the first job -- I mean the series of ship. The first one was 45 days. The second one was 42 days. The last one was 38 days. What does it tell you? Through the partnership, through working a series, through constant good planning with our team and partners, we are able to save about a week for a very expensive chapter. So it's a win for us because we are able to effectively manage our costs better. For the owner, they have a week more to chatter out their vessel. But they say $100,000. There's $700,000 to the pocket of the owner. So that kind of concept of win-win and partnership we have been building with our customers, and that trust has been tremendous to the success of this team. Thank you very much.

CCS and the new energy is exciting up and the coming business opportunity for the world and the Seatrium. I'm William Gu. Today, I will take you to Seatrium's view and our preparation for these opportunities. Before I start my presentation, I would like to recap to the fundamental strength which presented earlier by other business colleagues. As described by Marlin, Seatrium has a proven capability in research and product development as well as capability to do large EPC project for oil and gas industry. Now the new energy product is an extension from the oil and gas floaters. With the same underlying marine technology, share the same DNA and the common execution methodology by the year. Samuel also touched on our experience in extending our capability to perform end-to-end EPCICM contracts beyond traditional ex-yard delivery. As a main player in CCS, new energy, a new customer to Seatrium. We believe the end-to-end capability combined with one Seatrium global delivery model are the key differentiation factor to capture this opportunity to come. A win covers the importance and our willingness to FRs and remain relevant and flexible to new and the continuous evolving market needs as we have a long history of the repair and through the decades, the customer evolving. We are more focusing to the high-value work. This requires us to be on the market, understand the competition and capture the market ahead of our competitors. These are the Seatrium's 3 key strengths which lay the foundation for the company to venture into new business ahead. It is not a single business unit effort for all 4 business units are pursuing within their respective doming and the coverage. Let me now take you through to focus area with great potential. The first is the market for carbon capture, storage and injection business. With the existing CCS capacity installed at 40 mtpa as shown on the dark blue part, the industry committed an upcoming project are estimated to grow to slightly above 1,000 mtpa or 20x the current install capacity by 2050 as shown on the light blue bar. Furthermore, there is already a challenge to keep the global temperature rise within 1.5 degree target even to keep a 2.5-degree rise -- in the global temperature rise, an additional 4,000 capacity beyond the current committed project will be required as shown on the bottom bar. Although the current in-store CCS capacity is mainly onshore base, but offshore nearshore CCS is estimated to take up 85% of the market share in 2050. Based on the above, Seatrium therefore strongly advocating the development in in-house products in the following. First, nearshore CO2 collection, storage and exporting hub. This is where the world needs. Second, CO2 transportation vessel. Third, offshore Co2 receiving storage and injection units. Leveraging on our R&D and product development capability and through early engagement with the market. Seatrium is also actively exploring new business model to offer end-to-end offshore CCS as a service to fill the present gap in the market, basically is from the collection, transport to the offshore and inject to the reservoir. There is no clear leader in display. The second block market definitely related to power to X economy, which take on renewable energy to produce hydrogen and ammonia for cross-border sea transport. According to a study conducted by the Danish Energy Agency in 2021, the power to X-market size is estimated to range between 0.2 trillion to 2.3 trillion by 2035. Although the majority of the business is a land base. But Seatrium believe that excess energy generated from the rapid growth of offshore wind will require power to X offshore and onshore solution. We already see current install offshore wind during the peak season, the access power, the grid cannot take. So there's already many pilot initiative research on this field to capture these access power in the market. On the other hand, by introduce hydrogen and ammonia as alternative fuel will create a tremendous opportunity for transport vessel, receiving storage, bunkering terminal and new low-carbon power generation business. The industry has witnessed similar opportunity in the LNG value chain since 20 years ago. Hydrogen and ammonia as alternative field is expected to drive a similar boom in the future. With our best experience in LNG receiving an export terminal, including FSRU, FMG, and our continuous investment into IP products like Power barge, Sevan Offshore station, [indiscernible] solution. Seatrium is well positioned to capture the growth potential in the new energy business. Now in our journey to prepare new product and solution, to penetrate the offshore, nearshore, upstream, downstream, value chain of hydrogen and ammonia. Seatrium has already established a design for liquid hydrogen carrier as shown on the left. And our [indiscernible] already did the electrification, hydrogen fuel cell under a pilot project with a shell, which is shown on the middle. Seatrium is also actively involved in the industry collaborating with multi stakeholder group to develop ammonia ecosystem in Singapore as shown on the right. Seatrium is a founding member for [ seabulk ] consortium here. Here are some of the CCS new energy product Seatrium is developing at a various stage. The underlaying marine solution is not new to Seatrium. For example, picture 2 shows an offshore CO2 injection unit, which is based on the similar Seatrium oil and gas production floater or leading in the water. The difference is that oil and gas floater is used to extract oil and gas from the reservoir while the offshore CO2 injection is a reverse process to inject CO2 into offshore field. The same also applies to the offshore nearshore new energy infrastructure as shown in picture 5 and 6, which are [ UC trim ] proprietary offshore, nearshore solution for LNG storage and terminal. Let me sum up what I have shared and the key takeaways. First, to continue our research and product development effort by establishing and commercialized Seatrium's IP product in the new business area. Second, to actively establish strategical partner and collaborating across the supply chain. Third, to keep an eye on the rapid evolving market dynamic and to explore end-to-end business model beyond traditional EPC play. Last but not least, you have seen Seatrium's slogan in the first video where we started this presentation. Seatrium, Engineer our Future Together. And this is exactly what we are doing every day. That's the end of the presentation. Thank you for your attention.