SG Movers for Wednesday: Seatrium Ltd's Share Price Surge

Seatrium Ltd (SGX: 5E2) was the standout performer on the Singapore Exchange (SGX) on Wednesday, with its share price surging by 4.08% to close at S$2.04. The company's strong orderbook and operational excellence have contributed to its impressive share price appreciation in recent months, and investors are optimistic about its prospects in the near to medium term. In this article, we will explore the key factors driving Seatrium's share price increase and the potential catalysts for further growth.

Seatrium Ltd's share price surge can be attributed to several key factors:

1. Strong 1Q23 operational performance: Seatrium reported a spectacular order win of S$500-600 million for the engineering, procurement, construction, and commissioning (EPCC) of BP's Kaskida project in the Gulf of Mexico. This contract enhances its robust net orderbook, which stood at S$24.4 billion at the end of 3Q24, with project deliveries scheduled until 2031 (Source: UOB Kay Hian Report, Jan 3, 2025).
2. Successful project deliveries: Seatrium demonstrated its operational excellence with the delivery of two jack-up rigs to Borr Drilling in 2024. The "Var" jack-up rig was delivered nearly a year ahead of schedule, contributing approximately S$200-210 million in final payments, while the "Vali" jack-up rig also contributed to the company's sequential EBITDA improvement in the second half of 2024 (Source: UOB Kay Hian Report, Jan 3, 2025).
3. Strategic expansion into the Indian market: Seatrium's memorandum of understanding (MOU) with Cochin Shipyard, an Indian government enterprise, marks a strategic entry into the busy Indian offshore oil and gas market. This partnership focuses on jointly designing and supplying critical equipment for jack-up rigs and mobile offshore drilling units, positioning Seatrium well to benefit from India's growing demand for oil and gas production (Source: UOB Kay Hian Report, Jan 3, 2025).
4. Share buyback program: Seatrium demonstrated its commitment to shareholder value through an aggressive share buyback program in 2024, spending over S$43 million to repurchase approximately 25.2 million shares at an average price of around S$1.72. With less than 44% of its authorized buyback amount utilized, further buybacks are anticipated in the lead-up to the 2024 results announcement in late February 2025 (Source: UOB Kay Hian Report, Jan 3, 2025).

In conclusion, Seatrium Ltd's share price surge on Wednesday reflects the company's strong operational performance, strategic expansion, and commitment to shareholder value. With a robust orderbook and promising opportunities in both the offshore oil and gas and renewables sectors, Seatrium is well-positioned for further growth in the near to medium term. Investors should continue to monitor the company's progress and developments in the offshore and marine industries to assess the long-term sustainability of its share price growth.