Singapore offshore and marine firms enjoy winds of recovery

The Sue-Ann Tan Business Correspondent Offshore and marine (O&M) companies listed here have bright prospects ahead, as they are well positioned to take on projects in the growing renewables space while also benefiting from their existing order books, experts said.

- Sue-Ann Tan

These companies revealed good results in the latest earnings season, when many reported profits for the April to June quarter and the first half of 2024.

This trend is expected to continue in the months ahead, experts added, with the firms enjoying a strong pipeline of work and the capabilities to take on greener projects as well.

OCBC Investment Research head Carmen Lee said: "In general, the O&M sector has seen a continued recovery and this is also seen in the share price performance of a number of names in the sector." For example, Dyna-Mac and Yangzijiang Shipbuilding have delivered total returns of 74 per cent and 64 per cent respectively year to date, based on Sept 6's closing prices.

She noted that other names such as Beng Kuang Marine and Mermaid Maritime have also performed well.

Maybank Securities analyst Jarick Seet pointed out that the floating production storage and offloading (FPSO) space continues to be robust, as well as offshore support vessel charters for oil and gas.

He added that renewable energy opportunities, such as wind farms, continue to be bright spots for Singapore's O&M companies.

DBS analyst Ho Pei Hwa said O&M firms are positioning themselves to benefit from the clean energy transition by leveraging their offshore engineering capabilities in wind farms and other offshore renewables projects.

Investors also continue to focus on Seatrium, which returned to profitability with a net profit of $36 million in the first half of 2024. It has secured $13.4 billion worth of new orders from new and repeat customers over that same period.

Ms Ho noted that Seatrium is active in areas like providing highvoltage direct current transmission systems.