Singapore’s Seatrium has cautioned that its 2023 loss will be significantly higher than in the previous year, as it expects to make a “material non-cash write-down” pertaining to the surplus non-core assets, and excess and obsolete inventories as the company positions itself for future value creation.

Seatrium, the nation’s leading offshore, marine and energy contractor — which came into being last year following the merger of Sembcorp Marine and Keppel Offshore & Marine — on Tuesday confirmed that while the company anticipates operational and financial performance to continue to improve, it expects to make a net loss for the 2023 financial year.

Seatrium made a 2022 net loss of S$261 million (US$195 million) at the current Forex rate, while the company was in the red to the tune of S$264.4 million for the first half of 2023 on the back of revenues totalling S$2.9 billion for the six months ended 30 June last year.

“In line with the group’s business transformation, management undertook a strategic review of its business focus, operational footprint and assets required to support its strategy of building a profitable and resilient business going forward. It has since completed the review, and identified core assets which bring synergies to the group, as well as non-core assets which are surplus to its operations that would be written down,” said Seatrium.

The company added that as a result of the strategic review, the closure of surplus non-core assets and write-down of excess and obsolete inventories are expected to improve its productivity, optimise its cost structure and reduce cash operating expenses, resulting in significant value creation in the medium to long term.

“Accordingly, the group is expected to make a material non-cash write-down pertaining to the surplus non-core assets and excess and obsolete inventories in the current financial year. This will result in a financial loss that is significantly higher than the previous year.”

Seatrium is in the process of finalising the unaudited consolidated financial results for the six months and full year ended 31 December 2023, which will take into account this assessment, and will be released on 26 February.

The company further advised shareholders and investors to exercise caution when dealing in the group’s shares.

“In the event of any doubt, they should consult their stockbrokers, bank managers, solicitors or other professional advisors,” said Seatrium.