Seatrium Limited (5E2) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us at Seatrium's Third Quarter Update Call. My name is Amelia, and I take care of Investor Relations and Corporate Communications for Seatrium. I joined the company in August, and I look forward to working closely with all of you. On our panel today, we have with us Mr. Chris Ong, our CEO; and Dr. Stephen Lu, our CFO. We'd like to start the call with opening remarks from Chris and Stephen. Chris, over to you, please.

Thanks, Amelia. Good morning, and thank you for joining us today. Before we move into Q&A, I'd like to offer some quick comments on our 3Q 2025 business and operational performance, key developments and management views on outlook and priorities. Now first, we continued the strong momentum from first half 2025 into 3Q 2025, backed by robust project execution. We are also enhancing operational efficiency and unlocking value through divestment on noncore assets. Stephen will later elaborate on these efforts a little bit clearer. Project execution remains strong. During the quarter, we cleared the required classification and regulatory certifications and successfully delivered WTIV Charybdis in early September. We have also delivered HVAC Offshore Substation Changhua 2b and 4. Three FPSO for Petrobras are undergoing integration at Tuas Boulevard Yard, while works on the fifth and sixth FPSO for Guyana are advancing at Benoi and Pioneer Yard, respectively. Based on what you all visited us the very last time, I think we welcome all of you to visit us again. Tuas Boulevard Yard is now filled with activities. Now replenishing order book remains a priority backed by robust pipeline and industry tailwinds. We are a diversified business today across oil and gas and renewables as well as establishing early leadership in new energies, which will be critical to position us well amidst global energy transition. While we cannot control the timing of FIDs, the pipeline and market outlooks remain robust, and we believe we are well positioned to capture our share of these opportunities. For oil and gas, we are actively pursuing new build and EPC opportunities in Americas and beyond, including the second FPU new build for BP following the recent FID for BP's Tiber Deepwater project, several FPSO tenders in Brazil and Guyana, while also seeing demand for oil and gas production assets globally. In the renewable space, energy security is still a prevailing theme in Europe, and we see growth opportunities in Asia, driving series build opportunities for both HVDC and HVAC platforms. Repair and upgrades continue to enjoy strong repeat businesses, providing earning resilience. We will leverage our track record on developing complex solutions to pursue higher-value work. The most important, execution discipline and risk management continues to be the core pillar for us as we strive to complete most legacy premerger contracts by financial year 2026. There are 3 more projects remaining on track for 4Q 2025, first Q 2026 delivery, including our final project at AmFELS yard, the dredger for Manson Construction. Regarding WTIV Sturgeon, arbitration proceedings are underway. We have rejected the buyer's notice of termination and reserve our rights for wrongful termination. We will defend vigorously while striving to secure the best possible outcome that will safeguard shareholders' interest. This is a premerger contract and is the last contract in our order book on 20:80 payment term. Post-merger, we have been very disciplined to ensure contracts are on progressive milestone payment with risk-adjusted margins of about mid-teens. Ensuring that the projects are cash flow neutral or positive is also a key priority. We are committed to transparency by providing accurate guidance and timely updates to the market. Upfront financial impact of the developing situation is uncertain at this juncture and will depend heavily on the final outcome, but we will provide guidance when visibility improves. Our strategic priorities remain consistent and aligned with shareholder interests, uphold customer trust by prioritizing safety and delivering projects with reliability and excellence, convert pipeline opportunities into firm orders, expand margins through series build projects, disciplined execution, continued cost optimization and divestments, progress towards our 2028 steady-state financial targets and drive long-term total shareholder returns. I will now hand over to Stephen before we move into Q&A. Stephen?

Thank you, Chris. Good morning, everyone. Just a few additional comments before we move to the Q&A. Firstly, our current net order book stands at $16.6 billion, which remains healthy and above 1.5x our trailing 12 months revenue, excluding R&U, thus providing near-term revenue visibility. Secondly, we have been accelerating our ongoing asset portfolio optimization efforts in the third quarter of 2025. As a reminder, asset portfolio optimization is the third lever in our value creation framework, alongside order book growth and resilience and margin expansion. The divestment of noncore assets and surplus yards is a key part of the strategy. These actions help to reduce operating costs, improve asset utilization and enhance margins. We have recently announced the divestment of our U.S. yard and platform supply vessels in Brazil. While we expect to book gains on these divestments, more importantly, these divestments will generate sustainable annual operating cost savings of at least $30 million upon completion. We have identified other noncore assets include surplus yards, PP&E and investments for potential divestments. While we are clear on what we intend to divest, we'll take a considered approach to ensure that we maximize value for each, and we'll provide further updates as and when material transactions occur. Lastly, to supplement Chris' earlier point on execution, discipline and risk management, financial prudence and discipline is also of paramount importance. We are confident in the execution and cash flow generation of our post-merger contracts. At the same time, we have also been transparent about the challenges associated with the legacy pre-merger contracts. While some of these, as Chris mentioned, may result in upfront financial impact, we are actively managing our risk to minimize net effect and to protect shareholder value. To close, Seatrium is in a significantly stronger position today with combined expertise and track record, we are now harnessing the scale and synergies more effectively across our global presence, underpinned by the One Seatrium Delivery Model. Our world-class customers continue to place their trust in us, and we are uniquely positioned to capitalize on opportunities in the global offshore and marine and energy sectors. Our fundamentals remain strong, and we are committed to drive long-term shareholder returns through growth, discipline and strategic execution. With that, let's move to the Q&A session.

[Operator Instructions] We'll take the first question from the Q&A box from Ryan, who is asking about getting some color on how the interest cost has moved for the quarter and the outlook for the rest of the year?

Thank you, Ryan. This is Stephen here. As you know, we don't provide guidance on specific numbers in Q3. However, our cost of debt has decreased in the last quarter due to lower baseline risk-free rates and our improving credit profile has enabled us to secure low margins on our borrowings. We have been also expanding our network of lenders to secure competitive rates. Hopefully, that answers your question.

Thanks, Stephen. Our first question in the queue first in the queue, Luis.

I had 3 questions initially. The first one is regarding the Maersk case. Is it impacting the FID timings you're seeing or your negotiations at this moment? Or is it just business as usual? And related to that, is the primary client of Empire Wind, Equinor, proposed any solution for the newly completed vessel since they have their own timetable to meet. So your vessel is right there and ready. And the third question is just to clarify on what Stephen had mentioned, the $30 million in potential savings, that's only for the 2 yards that you have already disclosed that are up for sale or that includes future yards?

Luis, I'll take the first question. I think, the Maersk WTIV case is a business as usual. It does not impact and it's not considered inside our $30 billion targeted future projects because this $30 billion is the pipeline, what we are chasing. And your second question, we can't disclose right now because we are focused on executing the project, how and when will there be a potential settlement? I think our primary contract party is Maersk Offshore Wind. So that's a primary channel that we are actually talking.

Just a clarification on the first question. Actually, it was more towards -- is there any like new negotiations for the $30 billion project? Is the termination becoming an issue or it's essentially accepted by your counterparties that the issue is with Maersk?

I wouldn't say the counterparty will think that it is Maersk or us. I think it's a standalone project, and I would call it difference in view, but it's not impacting us for future projects.

Luis, on your third question, the $30 million I mentioned relates specifically to the annual cost savings for AmFELS Yard as well as the PSVs that we recently divested. And it doesn't include anything in the future.

Next in the queue, we've got Siew Khee.

Just wanted to get a little bit more clarity on the Maersk cancellation. Maybe you can just walk us through, does the customer actually sign up progressively when you achieve certain milestone? And what is the basis of the contract cancellation? I'll move on to my second one after this.

Siew Khee, you want me to answer or you would...

Yes. I think you answered this one by one. I think it's easier.

I reckon you have a lot, but let me answer the first one first. I think that this -- that there were exchanges in our announcement. First, of course, what we are refuting is that it's a wrongful termination, because our view is that we do have regular project meetings that state that there are exchanges as usual in any of the projects that we have. But anything more, I think that the situation right now is rather sensitive, but what -- the main thing that Seatrium is very focused to make sure that we refute it. And at the same time, not to forget that we have a deadline to deliver this. So we are heading towards 30th of January for the contract.

Okay. You mentioned that you are working towards the best outcome. What is the best outcome?

The best outcome at this present moment is for us to complete the projects and be ready to deliver on the 30th of January. I mean, while there are different exchanges, I think the most important thing is for us to complete the asset so that there is a completed asset for the field.

Sorry, because they have -- because, I'm not really understanding how the cancellation procedure will work. So they have already canceled, and you still complete, you mean you will actually tow the vessel to the site. How does that work?

My delivery obligation is ex-yard, all right? So when we say that we refute and say that this is a wrongful termination, I still have to basically honor the contract and complete the contract.

Okay. So the vessel could still be sitting in your yard, but you just completed, but do they not need to actually sign off to say that you complete?

Well, we still continue to invite our clients for any of the inspections. We still have class in the yard that will take a look at all the tests that we are doing. So I think at the end of the day, there are deliverables to state that the vessel is actually completed. So we are following the protocol.

Okay. Just to check that in the event that they -- this is prolonged and then you can't really complete it, that is -- I mean, just as with usual cancellation risk in such work, you can take ownership and sell, right?

Let's not speculate, Siew Khee. When you mentioned that if we cannot complete, we will complete on the 30th of January.

Okay. Then what is the impact of your working capital if they don't pay up the 80%?

I mean, this is a 20:80 contract. In the first place, 80% working capital has been financed by the yard. Then of course, come 30th of January, we will assess the impact accordingly because there's still -- the situation is still very fluid. And from now to then, I said, besides focusing on the delivery of the vessel, of course, there will be different scenarios that we are working towards.

Okay. Sorry, just one more relating to this kind of question, this issue. Are you in talks with them -- sorry, actually 2 more. Are you in talks with them or are you just focusing on delivering? Or are you in talks with the Equinor?

As mentioned, Maersk Offshore Wind is our primary contract party, and it's not surprising that we are in conversation, whether it's due to the project or whether it's due to the case. But please understand because the situation is rather fluid right now, I think besides preserving our legal rights, the main focus is to complete the project, which then would be gainful for conversation because whether the asset can go or cannot go to operate, really depends on whether it's completed or not. So that doesn't change.

Okay. Last on this, do you have any other contracts in the order book that has 20:80 payment terms?

This is the last of the legacy project that has a 20:80 payment term.

Can I just ask my last 2 questions, then I will jump in again. Just to confirm the order win during the quarter is less than 300 million.

It has -- in terms of order win, it has been rather quiet, of course. But again, I just want to remind, I can't control the FID pace of my customers. So I'm just trying to confirm the number right now for the last quarter. So the last quarter, I believe, just from a quarter angle, there is a $94 million FLNG upgrade.

And also the Manson is still in the yard. Any major challenge that you're actually facing right now? Like why is it still in the yard? And maybe just -- I just wanted to check whether there will be sudden provision that you need to do in second half relating to that?

As mentioned, I believe, I shared before, the final stage of testing. We believe that we achieved all engines online, and the team is targeting to complete 4Q 2025, if not first Q1 2026.

Any risk of cancellation?

At this moment, no. Not at all.

Next in the queue, we have Sumedh.

Can you hear me?

Yes.

Just a couple of questions. I guess, firstly, on the WTIV cancellation again. Just considering the situation is fluid, you do have at least 2 or 3 scenarios in mind, potentially. Could you please walk us through potential scenarios, and financial impact that you can share just from a generic standpoint, that's also helpful. And my second question is just on the Tiber FID. We understand the FID was taken a month back or so. How long would it take for the order to reflect in the order book?

I think that the Maersk, as I mentioned, is quite early and fluid to actually talk about the potential outcome. As mentioned, 30th of January, complete the vessel, be ready to deploy, filling which then, of course, there's always the arbitration route that the 2 parties will have to take. But at this moment, that's around about what we are working towards. Now your second question on Tiber. Yes, Tiber BP has FID, the development. I think we are one of the contracts, I guess, they will be in the market to take a look at. Just to remind, we signed an MOU earlier this year. So there's a certain timeline that we are working towards. So we still need to conclude paperwork. We don't have a fixed date right now. But I said good observation, it is great that the development has been FID. So as soon as we sign the contract, then that will reflect in our order book.

I understand. And just a quick one. The MOU means that Seatrium will get the contract. It's just a matter of timing. Is that fair to say? Or are there still some other part?

This is the same question, right, that you asked, but in any case, the MOU was to take a look at repeat of the Kaskida that we are already building, I guess, of course, to harness on the efficiency of having a second repeat build as a franchise. I won't say that it will confirm that Seatrium will be the only party to win this, but all I can say is that we are in discussion with BP at the present moment.

We have a question in the Q&A box from Ada. She has 2 questions. First question on the margin trend this quarter. And second question on customer sentiment that we're seeing on the ground this quarter. Maybe, Stephen, you can take the first question and then Chris on the second.

Thanks for that. As you know, we don't provide guidance on margins, but if you look back at our first half '25 gross profit margins more than doubled versus the first half '24, reflecting our strong core performance. Of course, we continue to focus on margin expansion through a higher share of higher margin projects, great operating leverage as we grow the top line. And of course, as I mentioned in the opening address around continuing to optimize our cost structure, enhancing productivity, and to further improve our utilization. And of course, as we have discussed previously, there is also a margin upside for projects with contingencies are released as milestones.

I will take the second question that Ada has asked. I think, sentiment-wise, largely positive. We -- of course, there are definitely some challenges in the market that's not only faced by Seatrium. We have, of course, have the trade tariffs. We have certain supply chain challenges. But I think at this present moment, we have a healthy pipeline across all the segments, whether it is oil and gas, offshore wind or even new energy retrofits. But the key thing that I want to remind is that the long-term structural demand for energy infrastructure remains strong. We all know that right now, besides growing population or rather structural changes of population growth in more populated cities is now worsened at the end of the day by energy need by data centers, especially with AI adoption. Now -- and of course, we all know that the geopolitical challenges around the present administration in the U.S., we can see that energy security also becomes a lot more important right now. Countries are taking a look at how they can be self-reliant in terms of energy, which is a fundamental driver of any technology advancements and also any of the economic ambition that they need to achieve. So we see opportunities in the current environment. And of course, the main thing is that Seatrium will continue to put ourselves in front of the queue with our ability to deliver complex products, and also be a solution provider for energy products.

Next, we have Luis.

Just one follow-up question from me. If you can remind us the $30 billion targeted future projects, is there a rough split between which is oil and gas versus offshore wind in terms of percentage or any rough guidance?

I believe that we shared before, I think in the first half that there's $19 billion oil and gas and $11 billion of offshore wind.

Siew Khee, I think you have more questions for us.

Just wanted to just follow up on the $11 billion offshore wind in the $30 billion future projects. Is that mainly in Europe and Asia?

Yes. Most -- I think that the mature market in Europe, and of course, in Asia, mainly Taiwan, they're still seeing strong demand for offshore wind products.

Okay. Just on the OSS 2 projects in U.S., I know that it is only less than 1% of your order book. Any risk of cancellation?

You're referring to a substation in the U.S.

Yes.

So basically all the -- I call it the substations are actually on site in the U.S. So they're going through installation stage. We do not foresee there's any risk of cancellation.

Why I'm asking is because it's just that the changes in U.S. overall sentiment, whether the owner would need to look at impairing the cost or whatever that would -- even though you are there, there is a risk of cancellation.

Yes. But a point to note is that the two OSS that we are building this despite the present U.S. administration, it is very clear in the market that these two are being approved. So the customers in the so-called, even in the results, have said that these 2 projects are going on, right? So one is the Revolution Wind.

Yes. And then also just wanted to just check, you gave some details on what you have actually delivered or rather executed this quarter. Just because we don't really know how much is the revenue you don't really disclose. And I appreciate Stephen talking about your efforts of trying to still improve margin. But just on the overall revenue recognition side, are we seeing any like weaker trend whether in the second half or just stable in case there's anything that you are in engineering stage or cannot recognize. Just want to get a feel of the overall revenue in second half, like the trend are stable or any risk that you are looking at?

Revenue angle because it is dependent on the POC of the projects that we have, it is stable because right now, we are focused on execution of the projects. So I don't think that we will see -- I don't know what's the extent that you are seeing on any hiccups, but yes, to us, it's stable because we are clocking the POC that's required.

Okay. And also just on -- I know you don't comment on competitors, but just wanted to check that you did consider to take over the Petrofac contract and what happened if you did consider why did you not get it?

I remember you asked this a few times, but I'm going to repeat what I said. At the end of the day, for the TenneT project itself, the way it was set up is that there's 3 consortiums, right, largely driven by both execution centers and also HD provider. So for this Petrofac, I cannot comment because purely, it is between TenneT and Petrofac-Hitachi. So the strategy that they are basically going on, I can't comment on that. All I said was that if they need our involvement, we will be there. But saying that we are also pursuing our own consortium prospects in this angle.

Next in line, we have Zhiwei.

Right. I just want to ask to delve a little bit more into your contracting outlook and probably get some color, right? You talked about your $30 billion of targeted opportunities, your offshore wind opportunity, and how energy security is kind of driving all these demands and needs. But specifically on the offshore wind, we have seen an increasing number of zero bids for the wind tender, the Dutch one being the latest, right? Are you not concerned? Or how should we think about it like beyond the next 12 months? Is offshore wind an opportunity that -- a space that you continue to see opportunity and contracts that you can secure to fill your order book? And if there's so much demand for all these energy security, then why aren't we seeing a faster pace of contract wins and inquiries on your end?

Zhiwei, maybe I will reply that first. I think that structurally, when we take a look at energy transition, I think the view of the energy transition trend, we are still bullish about it. Key thing is that when we look at prospects, the key thing is that we are looking at HVDC prospect, especially in the Europe. Those are with TSOs, and TSOs is largely linked to how the government and how the TSOs are preparing to basically bring electrons into the grid. So that itself and the tender basically around developers are slightly different. If you take a look in September 2025, TenneT actually announced a landmark EUR 9.5 billion investment. So from that angle, it is still a very bullish and bright forward trajectory of how they want to develop offshore wind, both in Holland and in Germany. And besides those tenders, they are mainly for the developer angle. We also know that BalWin 5 tender for 2 gigawatt HVDCs in the market for the German sector. So from that angle, you can see that there's still a healthy pipeline that's moving. And we believe that for the Holland HVDC site, there should be allocation in 2026, if not 2027. So from that angle, I reckon that the EU plans mainly for energy security, and an alternative to Russian gas is clearly moving in tandem with both energy security and energy transition.

So in short, you believe that the government will continue to push this directive forward. But what if -- have you thought about what if they start to take queue from all these lack of tenders and then redecide that maybe they don't want to do as much. Therefore, your TAMS kind of shrinks. And then if that happens, what will Seatrium then pursue to fill its order book? Because this offshore wind is what's really filling your order book. There's nothing else really in the oil and gas space.

Well, if you take a look at our split in terms of not only order book and also in the pipeline that we have just shared, actually, oil and gas is something that is still very buoyant. I think it's still going very strong. There are projects that are out there in the market and upcoming. So that one, I think we'll continue to chase. We shared that there's $19 billion of pipeline that we're chasing right now. Well, just very specific on offshore wind, I think that fundamentally, if you take a look at the last few years, it is a -- I think it's more on the structure and also repricing. I think in the Europe and also Asia, the sentiment around offshore wind probably doesn't do justice because of the U.S. present administration. So I still firmly believe that based on that, the split of energy mix is still going to create healthy growth in all areas.

We have a question in the question box from Philip. He's asking about the 5 or 6 completed Brazil building drillships and whether or not we have any intention to scrap or monetize them in some way.

Philip, actually, those drillships were at different levels of completion. But for the -- we actually scrapped the hulls that we can last year already.

Thanks, Stephen. Another question in the question box from Ada. Will Seatrium look to be prudent and take provisions for the WTIB Sturgeon and the Keppel indemnity dispute in FY '25 or '26?

Maybe I'll take this, Chris. On the WTIV, as Chris mentioned, it is still a current -- currently still a fluid situation. And so we'll make assessment once we have a little bit more certainty around that. On the Keppel indemnity dispute, you may have noted in the first half, we actually -- last year, we reversed the provision that were made in this. And so based on the legal opinion that we have received, we are not going to make any more provisions on this one.

Thanks, Stephen. I think that was the last question that we have. We don't have any more hands in the queue. So if there are no further questions -- sorry, Siew Khee has another question.

Can you hear me?

Yes, we can.

Just on the Maersk side, I know that you are focusing on delivering. And Stephen, you did mention that you will assess and we'll see whether you see any certainty of provision. So given that the completion is on 30th January, if there was any provision that is required, it would be taken in for 2025? Or yes, just maybe help us on that.

Siew Khee, we'll update you, as I mentioned up, once we have more certainty.

We have a question from Philip.

Can you hear me?

Yes.

Yes. So just I was asking about the 5 or 6 drillships that was half completed during the Sembcorp Marine era that -- it was mentioned that one of them has been scrapped, but what about the rest? I want to just know like what are the intentions? Is it like also planning to scrap the rest or we try to maybe still try to monetize them in some ways? Yes, that's my question.

Thanks, Philip. Sorry, maybe I wasn't clear. For the hulls that can be scrapped, we've already scrapped last year. Because the project -- the 6 projects were at very different levels of completion.

What about those that are very nearer to like more advanced stage of construction? Are they also going to be scrapped? Or is there opportunity to monetize them?

I think we are keeping our options open. The 2 -- I believe the 2 that are more completed one, they are still around. So basically, largely, we are also waiting for settlement of the charter that was still in place. So I think that one, we will have to just wait a while and see how it comes, but we are open to options as we always are, whether to scrap it or whether to redeploy it, it will have to come after the settlement.

It seems like we have more questions coming in. Next question, we will take Pei Hwa's call.

Just a follow-up on -- can you hear me?

Yes.

Just a follow-up on contract wins. So on FPSO. I think you mentioned about Brazil side, we are still seeing still active tendering. I mean we saw some -- we saw a cancellation on the P86 tender a few months I mean in August. Can you give us a bit more color on the activity level in terms of tendering, what are the key projects that we could expect from Petrobras is one. I think secondly, also just trying to understand because we already have a series of FPSO building for Petrobras, if, in event they would like to diversify the concentration risk at one shipyard, what alternatives they have at this juncture?

If I get your question right, Pei Hwa, you mentioned about the prospects in Brazil. I think that in the market, there are quite a number of ongoing tender upcoming. And there are also tender that has concluded, but discussions are still in progress, just like the SEAP 1 and 2, I believe that it was that announced that SBM, it has the lowest bid. So discussions are ongoing. Well, for us in this type of BOT tender, we are basically the EPC part. So we are not funding it, but we are working with our regular customers to take a look at how we can add value, all right? And if you want to ask our involvement, it can range from a full EPC to local content involvement. So yes, that is quite varied. But when it comes to activities, going forward, we have shared. I think Petrobras on their development plan, they are quite clear. If I still remember correctly, there's no less than 7 until end of 2030. Please check that out. I think that's what they said. But if you take a look, I believe it's in the market that Albacora and Buzios 12 will be upcoming. Those are BOT format. So we will foresee that the ongoing tenders are mainly BOT in nature. I believe Albacora is P-88 and Buzios 12 is P-91. So you mentioned about competitive landscape for this. From -- of course, BOTs are all the operators-led. So there's a usual name out there. I can't comment on their strategy, which tender they go for. We work with all of them because we're in the business of building. But based on recent tender, we can see that I think in the news is stated, I'm also reading from the news, I think Hanwha is also looking at building and us. And of course, Chinese are also involved...

Next question from Siew Khee.

Sorry, can I just check because earlier on, you mentioned that the 2028 target is still on track despite what is happening, I guess, in U.S. side, just in general. So in there, I remember, we said that our revenue will reach 10 billion to 12 billion by 2028. How does the change in the overall sentiment and what's happening to the customers' FID impact will have any impact in your order win assumption? Because in order to achieve $10 billion to $12 billion by 2028, we probably have to actually start working very hard to $6 billion, $7 billion by next year.

Siew Khee, you can trust us that we are working very, very hard always. But just to give all of you a little bit on the sentiment. There's a few mention about ongoing customer sentiment and all this. I think the key thing is to really take a look, I think all of you are quite well versed on all the tenders that are ongoing right across the spectrum of energy. If you take a look at oil, there are Brazil prospects, there are African prospects for production asset. In the Gulf of America, the FPU formula seems to be in favor. We are still executing one for Shell and one for BP. And I believe that it's also mentioned that Tier is on the way. So technically, we still see a strong robust requirement on the oil sector. Now for gas, there are a few ways that we are playing, right, the FSRU conversion and also on top of that FLNG prospects, those are still worthy chase list, and that's why it's all in our pipeline. Now for offshore wind, like what I mentioned just now, probably the sentiment is slightly driven by the U.S. administration, the market in the U.S., which is decent in the first place. And of course, some field tender in Europe like U.K. and Holland. But as mentioned, what we have in place today is quite a diversified angle of approach. One of the best one that is reaping good return for us is a franchise built on HVAC and HVDC. And we do believe that there are tenders right now ongoing that we are hopeful, but of course, in any tender, it all boils down to economics and also our ability to deliver. So I think that right across the value chain of energy transition, there's still a lot of projects going on. Now for 2028 targets, our view is that we are making steady progress. We are not changing our ability to meet that by 2028. So based on the order book that we have, based on our operational efficiency that we have been working on largely for the last few years, plus one of the very important factor is on our cost and our bandwidth, divesting the noncore plays a very important role also, not only on management bandwidth, but also on our running costs at the end of the day. So I think all these factors have always been in play, and we have communicated that. And I think firing on all cylinders, we will be able to meet our 2028 target, as what we have mentioned.

We have a question in the question box from Adrian asking about the Guyana opportunities that we referred to earlier one is the rough time line and potential order book that could look like within the $19 billion of oil and gas.

For Guyana, we have basically integrated all of the FPSOs. We have 2 of the FPSO that we are working on right now in the yard, one for MODEC and one for SBM. Those are integration projects. And we -- the projects are working along fine. And basically, those projects have gone in series, and the certainty of execution is well demonstrated. So I can say that we are the preferred integration company for Exxon and the contractors. What proportion of the order, it depends. That one will really depend on what formula or how you dice up the projects and what part of the project that will be involved in, and that's not certain at the present moment, because I believe that Exxon has not came up with the next one, right? So based on the $19 billion, the prospect is largely still fluid at this present moment.

Thanks, Chris. That was the last question in the question box, and I don't see any more virtual hands. I'm going to give you 3 more seconds. Otherwise, we're actually quite close to time. And we can end the call now. Okay. So sorry, so we have a question. Maybe we take the last question, Zhiwei.

I just want to go back to Siew Khee's discussion about your 2028 targets, right? Given that you have an estimated run rate of $10 billion to $12 billion revenue, and I think right now, you're going to do about $10 billion revenue, you have a $16.6 billion order book. You're going to deplete it by the end of next year unless you have some serious big contract wins. So assuming you secure your $30 billion next year, right? I mean, you secure a portion of the $30 billion opportunity next year, and that fills your order book again. It is to note that these big orders have come in like once every 2 years or so just based on the pattern we've been seeing. So given the changes in the environment, are you still confident that you can still secure this sort of like $8 billion, $10 billion contract wins per annum to sustain your targeted run rate going beyond 2026, because it's looking a little bit challenging from our standpoint here.

Yes. Zhiwei, of course, we don't forecast -- give forecast on what's the order that's important. But like what we mentioned, why we are sharing the pipeline was exactly the question that was asked on us to say whether there are even prospects of being able to secure. So if we take a look, at the end of the day, again, the FID movement is largely dependent on field development and whether the customer FID them. But if you take a look at the prospects itself, even with a fraction of it, it will keep continue to build up the $16 billion that we have. Now the question would be, well, we have been burning off the order book for a while right now. But as mentioned, there are a few immediate prospects that are already near or already FID. So we'll continue to add on that order book. Now, for this business itself is largely order-book driven. And it is not practical for us to really forecast what is the sentiment, and how much are we going to secure in the next 1, 2 years. But suffice to say that the $16 billion order book itself is comfortable for us to execute in the next few years because we will continue to add on that, whether it is the $8 billion or $10 billion we are talking about, whether it's $4 billion to $5 billion, we will continue to add on it. And not to mention the order book itself also don't include R&U business by itself. So there are a lot of factors that are going on, but as mentioned, once the pipeline is as such in the market, we will do our best to basically add on to the order book to make sure that there's better visibility as we move along.

I'll just give you a little bit more time to see if we have more questions. Otherwise, we'll end the call here. Okay. I think we'll end the call here for today. If you have any more follow-up questions, please feel free to reach out to us at the e-mail listed on the screen. Thank you for joining us this morning. Until the next quarter, take care, and we wish you a very lovely day ahead. Thank you. Bye.