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Amelia Lee: Good morning, everyone. Thank you for joining us at Seatrium's Full Year 2025 Results Briefing. My name is Amelia, and I take care of Investor Relations for Seatrium. This morning, we have with us our CEO, Mr. Chris Ong; CFO, Dr. Stephen Lu. Chris and Stephen will bring us through a short presentation before we open the floor to questions. Chris, please?
Leng Yeow Ong: Thank you, Amelia. Good morning, and thank you for joining us today at Seatrium's Full Year 2025 Results Briefing. Before I start, I'd like to wish everybody a very happy and a healthy Lunar New Year, good year ahead. I'm pleased to report a strong set of results in our second full year since merger with robust revenue growth driven by strong project progress and doubled the net profit that is an undeniable reflection of our laser-sharp focus on driving margin efficiencies and execution. For the first time, we have recorded a positive 1-year total shareholder return of 5.2% as we strive to continue driving lasting value for all shareholders on strengthened fundamentals. Our strong performance also comes on the back of heightened geopolitical and macroeconomic uncertainties that companies around the world had to grapple with. Despite some delays in investment decisions in several markets in the first half of 2025, we still secured over $4 billion of new orders in FY 2025. This replenished our net order book that stands strongly at $17.8 billion as at 31st of December 2025. Meanwhile, we are actively pursuing more than $32 billion in pipeline deals, which reflects sustained investments by our customers to meet growing energy demand that is fueled by technological advancements, including AI. Third, we are today stronger and leaner than before. We have spent the last few years transforming our business and cost model, the way we work and the way we do business. 95% of our net order book today is made up of Series-Build projects that offer lower execution risk for both ourselves and our customers. Non-FPSO legacy projects, which are relatively lower margin and higher risk compared to post-merger contracts now constitute just over 1% of our net order book. We have also achieved our synergy and cost saving targets, accelerated noncore divestment to reduce overheads and importantly, brought closure to Operation Car Wash in FY 2025. This allowed us to move forward with greater clarity and step forward with larger strides as we leave legacy issues behind us. Today, these achievements reflect the merits of our strategy and that we are ready to build real sustainable momentum for the future. Turning to our financial performance. We delivered a second consecutive year of strong top line growth with revenue growing 24% to $11.5 billion from $9.2 billion a year ago. This reflects the strength of our order book and the disciplined execution that continues to drive reliable delivery to our customers. Net profit came in at $324 million, more than double of $157 million in FY 2024, outpacing revenue growth and underscoring the strong progress that we are making in expanding margins, which Stephen will talk about in greater detail. Our progress is best reflected in how we execute for our customers. Let me now highlight 2 projects that showcase the power of our One Seatrium global delivery model. First, FPSO P-78. We have achieved first oil in record time on 31st of December 2025, and first gas is expected in first Q 2026. Being built across our yards in Brazil, China and integrated in Singapore, this accelerated progress is a strong testament of our One Seatrium global delivery model and also showcases the expansion of our end-to-end delivery capabilities from engineering to offshore commissioning. P-78 is the first of 6 advanced greener P-Series FPSOs and it sets a strong benchmark for subsequent units. Next, on Empire Wind. The project is now over 97% complete and is situated on site in U.S., on track for delivery this year. Once operational, it will deliver 810 megawatts of clean energy to New York, enough power to power more than 500,000 homes. Both the topsides and jacket were built across our Singapore and Batam yards, demonstrating our integrated delivery capability. The remaining exposure in our net order book to the U.S. offshore wind has reduced to less than $10 million with Empire Wind and offshore substation for [indiscernible] very close to completion. The WTIV for Maersk Offshore targeted to complete end of the month. In fact, we are in discussion to deliver her within the next few days. Our future is taking shape with clarity, strong order book today for near-term earnings visibility and a resilient pipeline that sets us up for sustained growth tomorrow. We have been disciplined in ensuring we win high-quality contracts with world-class customers, with mid-teens risk-adjusted project margins and progressive milestone payments. Our ability to win these projects reflect the strong trust customers place in us across conventional energy and renewables. Amidst a tough macro environment, we secured over $4 billion of new orders, supported by returning customers and new partnerships. This include our first collaboration with Penta Ocean Construction, marking our entry into Japanese offshore wind market and DolWin 5, our fourth 2-gigawatt HVDC project with TenneT and our first for Germany under the 2-gigawatt program. Next, our net order book of over $17 billion is equivalent to over 1.5x of our very strong FY 2025 revenue. 6 P-Series FPSOs, 3 U.S.-bound FPUs and major HVDC and HVAC platforms are all progressing well, demonstrating the strength and depth of global delivery model. We have been transparent about the challenges we face from non-FPSO legacy projects, which now constitute just over 1% of our net order book. In the same spirit of transparency, we also like to share that the delivery of Naval project NApAnt has been delayed to 2027 instead of the original 2026 schedule. We are working closely with the customer to navigate this specialized shipbuilding project to manage execution risk. With a declining proportion of lower-margin non-FPSO legacy projects, we expect an improving mix of higher-margin post-merger contracts and a reducing trend of provisions moving ahead. Moving ahead, we still see ample market opportunities as we actively pursue $32 billion in the pipeline deals. Despite the lower oil price environment, it is widely established that the breakeven price of deepwater fields remain well below prevailing oil prices. Alongside strong demand for energy, the ongoing energy transition and the need for energy security, especially in Europe, where we are seeing some favorable wind developments for offshore wind, this gives us a long runway to capture high-value work across the full energy spectrum. We have been asked how are we positioned competitively to capture a good share of these pipeline opportunities. Despite being just formed 3 years ago during the merger, we have under our belt 60 years of proven track record and a unique ability to deliver projects with consistent safety standards and quality across a large global manufacturing footprint that presents scalability, geopolitical diversity and some cost arbitrage opportunities. These are not competitive levers that many players around the world have, but we do not ever stop evolving. We have been in business for over 60 years. We are not new to change. We are still standing strong today because we have successfully evolved alongside the industry, which is essentially critical now as the whole world is in transition towards cleaner energy sources. This is only possible with robust capabilities in technology development, where we take a practical market-led approach to innovation, to stay ahead and maintain our long-term competitive edge. Today, we own proprietary designs such as FlexHull that we are already using in active FPSO tenders to sharpen our competitive edge where proposed designs are evaluated as part of the bid. We also developed our own designs for FLNG and offshore substation, which has recently attained AIP. Longer term, we are also developing solutions for floating wind and other emerging energies to ensure we remain ahead of the curve. Our Series-Build approach, design once do many reduces execution risk, short-term schedules and improve margins, ensuring projects are delivered safely, on time, on quality and within budget. Today, about 95% of our net order book comprises Series-Build projects, underscoring the strength and scalability of this approach. On top of the existing franchises in gray, where we established the Series-Build strategy, we're expanding this to powerships where we see strong potential as well as applying the same principle to FSU FSRU conversion, especially since we already done 90% of the world's FSU FSRU conversion, which is an unparalleled track record worldwide. Last August, we signed an LOI with a long-term partner, Karpowership for the integration of 4 new generation powerships plus the option for 2 more, a strong endorsement of our capability and scalability in this adjacent segment. Integration works will start 1Q 2027. The LOI also includes conversion, life extension and repairs of 3 LNG carriers into FSRUs. These are examples of higher value work that we are refocusing our repair and upgrade business on. These capabilities and high-value franchises will position us well for the next wave of opportunities. Our $32 billion opportunity pipeline over the next 24 months is diversified across segments, geography and asset types, some of which offer distinct market cycles for business resilience. Many of these opportunities are also aligned to our Series-Build franchises. Over the next 24 months, we are pursuing $23 billion in oil and gas opportunities, driven mainly by Americas region. We still see strong opportunities in Brazil where our long-term customer has disclosed its pipeline for the next 5 years. This is also where we have strong leadership for local content through our 3 established yards. We are also well positioned in Guyana for high-value integration work and topside fabrication, where we have participated in all of the FPSO work for the Stabroek Block so far. Apart from the usual opportunities that the market expects, we are also pursuing opportunities in FLNGs and fixed platform in the Middle East and Africa region, and to a smaller extent in Europe and Asia Pacific. For offshore wind, Europe remains the largest and the most developed market, driven by its energy security needs. TenneT continues to be an important customer for us as we pursue opportunities in both Netherlands and Germany. With the award of DolWin 5, it demonstrates TenneT's confidence in our ability to deliver, and we are ready to scale up and take on more HVDC projects when the opportunity arises. Meanwhile, we will also continue to pursue opportunities from other European TSOs as well as HVAC deals in Asia. We have also identified $2 billion in conversion opportunities such as those with Karpowership that I mentioned earlier. All in all, we are well positioned and confident in our ability to capture a healthy share of these pipeline opportunities that will fuel our ability to deliver consistent performance. I shall now hand over to Stephen to bring you through the financial review.
Hsueh-Jeng Lu: Thanks, Chris. Next, I will dive deeper into our financial performance for FY 2025 and highlight the progress that we have made to shape a stronger, leaner and more competitive Seatrium. We delivered a set of solid numbers for 2025. The 25% rise in revenue was driven by a steadfast execution of a healthy, well-diversified order book, which provides strong visibility and resilience amid the evolving market conditions. Our gross margin, which I think is a reflection of the true operational performance has more than doubled to 7.4% in FY 2025 from 3.1% last year. We've continued to make significant progress in streamlining G&A expenses and lowering finance costs. As a result, net profit has also doubled to $324 million in FY 2025, up from $157 million in FY 2024. We also saw operating cash flow grow by about 4.5x to $440 million from $97 million, excluding one-off payments relating to legacy issues. And on the same basis, FCF doubled to $443 million. After taking into account these one-off payments, we still generated almost 46% more cash from operations year-on-year of $142 million from $97 million a year ago. We have also taken decisive steps to streamline our asset base by divesting noncore assets. This disciplined approach sharpens our focus, enhances operational and cost efficiencies. Diving straight into the key revenue growth drivers. The 24% growth year-on-year was mainly driven by a strong progress registered by both the offshore wind -- the oil and gas and offshore wind segments. Revenue from Oil & Gas Solutions grew 24% to $8.1 billion, underpinned by steady execution, progressive revenue recognition of the 6 new build Petrobras FPSOs. Notably, P-84 and P-85, which commenced work in the second half of '24. Offshore Wind Solutions also increased its revenue to $2.1 billion, driven by our 3 TenneT 2-gigawatt HVDC platform projects. The repairs and upgrade business registered lower volume and revenue due mainly to trade-related uncertainties and weaknesses in the LNGC market. We are, however, continuing to focus the business towards higher value projects, such as FSRU conversions and the integration of powerships that Chris mentioned earlier. In the meantime, our 23 long-standing strategic partnerships with large global customers continue to provide a steady baseload revenue of a more recurring nature. In the other segments, increased contributions from specialized shipbuilding, chartering as well as rig kit sales and MRO projects delivered through Seatrium offshore technology or SOT led to a 55% jump in revenue. While this business is small today, SOT capitalizes on our unparalleled track record and rigs expertise to monetize proven design IPs. It delivers a healthy margin, and we see growth potential ahead. Next, let's take a look at gross margin. Year-on-year, gross profit increased to $848 million in FY 2025 from $291 million, and gross margin increased sharply by 430 bps to 7.4%, driven by an improved mix of higher-margin projects, higher asset utilization, improved productivity as well as cost discipline. This was partially offset by provisions to the U.S. projects, where the final project was delivered subsequent to year-end and a little bit from a NApAnt, which Chris mentioned earlier. Other operating income was lower in FY 2025, mainly due to a one-off provision relating to the Admiralty Yard restoration before its return to authorities in 2028, net FX movement, lower scrap sales and a nonrecurring settlement gains that was recognized in 2024. G&A expenses as a percentage of revenue declined by 50 basis points to 3% compared to 3.5% in FY 2024 as we benefited from the continued cost optimization activities. Net finance costs also dropped by 18%, driven by debt repayment and lower financing costs, offset by a decreased interest and dividend income from equity investments such as the Golar Hilli, which we divested in 2024. Overall, net profit more than doubled to $324 million in FY 2025 from $157 million in FY 2024, underscoring the significant uplift in our core performance powered by revenue growth, stronger margins, sustained cost optimization and disciplined execution. As mentioned, we also reported much stronger cash flows in FY 2025, which is the reflection of the discipline that goes into ensuring that all our projects on our progressive milestone payment terms and robust project cash flow management throughout each project. Consequently, operating cash flow increased to $142 million in FY 2025 from $97 million. Excluding the effect of one-off legacy payments, operating cash flow rose 4.5x to $440 million, reflecting the level of cash generation that we expect moving forward. Investing cash flow was largely neutral with $122 million of project and safety-related CapEx, such as that for Batam yard to prepare for the 2-gigawatt HVDC projects, balanced by asset divestment proceeds. We will continue to be measured in our capital expenditure, which is mostly focused on investments that will enable growth. All in all, we generated $443 million in free cash flow excluding one-off legacy payments. This is more than double that of FY 2024. And we are confident in the execution and the cash flow of our post-merger contracts. Moving on to capital structure. We continue to adopt a prudent and disciplined approach to enhance resilience and afford us the financial agility to position for growth. Our gross debt decreased 5% year-on-year to $2.5 billion as at end December 2025. And through active refinancing, our cost of debt has declined from 4.9% at end December 2024 to 3.4% at end December 2025, driven both by lower base rates and tighter margins. We continue to broaden our funding sources and leverage our improved credit profile to secure favorable refinancing outcomes. Our liquidity position remains strong with $3.1 billion in cash and undrawn committed facilities, giving us ample headroom to support operations, pursue growth opportunities and other capital allocation requirements. In summary, our balance sheet remains robust with a low net leverage ratio of 0.8x and a net gearing of 0.1x as at 31st December 2025. With the FY 2025 performance covered, I'd like to touch on the efforts that we've been taking to transform our cost and margin profiles that will have lasting impact into the future. If we take a step back in FY 2023, when both companies first came together, Seatrium have focused on integration and harmonization. And so the new company can start on a clean slate. In FY 2024, our full financial year since merger, we quantified the benefits and scale of coming together, providing market guidance on 2 targets, $300 million on synergies, on cost savings and $200 million in procurement savings. These targets reflect the efforts that started from the moment the 2 companies came together. We looked at our cost items line by line removing what we didn't need and leveraging our combined scale for economic benefits. These changes have fundamentally reduced our cost levels and will continue to have a lasting impact moving forward. We are today in year 3, and we are pleased to share that we have exceeded those targets and the proof is in the numbers. Gross margins has turned from negative 2.9% at FY 2023 to 7.4% in FY 2025, alongside an improved mix of higher-margin Series-Build projects. G&A expenses as a percentage of revenue has also declined from 5% in FY 2023 to 3% in FY 2025. And as mentioned earlier, the cost of debt has also significantly declined from 5.7% to 3.4%. And we are not done yet. Initiatives implemented late last year have not seen its benefits fully baked into our financial numbers yet, and we also continue to drive greater cost discipline and internal efficiencies by embedding digitalization, AI and machine learning meaningfully into the way we work across our global business. We believe this will greatly improve visibility, control, risk management and operational efficiencies that will reflect in our margins and financial performance in the time to come. As I've alluded earlier, gross margin is an indication of our operational performance. And we are starting to see the fruits of our labor in FY 2025, and our reported gross margin of 7.4% is a vast improvement from where we started. But it is a reflection of what Seatrium is capable of. We are just getting started. As we continue to streamline operations and tighten overheads, we see accelerated pathways to further expansion through our ongoing divestments of noncore assets. This is an important lever to really reshape our cost structure to unlock efficiencies that will strengthen our long-term resilience and competitiveness. Since 2023, we started divesting assets on our books that are not really required for our global operations. And these assets are broadly categorized into yards and other assets such as vessels and floating cranes. We've accelerated the pace of these divestments in FY 2025, including Amfels and Karimun yards, GNL, our PSV vessel fleet of tugboats, floating docks and the Crescent yard that is expected to complete very soon. The sale of the Amfels yard and GNL vessels have already been completed and the rest are expected to complete by first half 2026. These transactions will deliver more than $50 million in annualized cost savings. These assets would have otherwise laid idle on our books are also expected to unlock more than $230 million in gross gains and over $330 million in cash proceeds, of which $110 million was received in FY 2025. We plan to do more, having identified more than $200 million additional noncore assets to divest by 2028, alongside the scheduled return of Admiralty Yard. Together, the transactions already -- with the transactions already announced, we expected the cumulative to generate cost savings over $100 million by FY 2028. As our business needs evolve, we will continue to review and evaluate opportunities to drive greater efficiencies. These structural improvements will enable us to reduce overheads and drive operating efficiencies, which will, in turn, bring us closer to our target margins, enhancing our business resilience and offering stronger fundamentals, which will deliver sustainable long-term returns. With that, let me now pass back the time back to Chris.
Leng Yeow Ong: Thanks, Stephen. To reiterate, Seatrium is at an inflection point today, and we are now ready to commit to creating tangible lasting value for our customers, shareholders and other stakeholders. This year, we are proposing to double the dividend to $0.03 per share, in line with doubling of our net profit in FY 2025. We also plan to continue our share buyback under our existing $100 million program, reflecting our confidence in the business and in the momentum ahead. You can clearly see the fruits of our labor. Total shareholder returns have turned positive at 5.2% and ROE has nearly doubled to 4.9% in FY 2025. These are early signs of the value we are unlocking as our strategy takes hold and we believe that there's further room for growth. Most importantly, we are balancing reinvestment for growth with consistent capital returns. This is how we will drive long-term durable value creation for our shareholders. Let me close by bringing this all together. Our strategy has always been clear and consistent from driving organic growth to executing strongly and transforming our cost structure for margin expansion, ongoing financial discipline and allocating capital prudently to enable sustainable long-term returns. Our value creation framework captures all of this, aligning everything we do from the way we deliver projects for our customers to how we manage costs to how we plan to deploy capital for sustainable return. On capital allocation, our priorities are disciplined and focused, investing for growth in areas where we have clear competitive advantage, optimizing our balance sheet, ensuring the right debt structure to support long-term value creation, returning capital through dividends on share buyback as we grow and exploring strategic M&As that strengthen our long-term position and business resilience. This framework keeps us focused with clear progression towards our FY 2028 steady-state financial targets, we are on the right trajectory to building a stronger Seatrium designed to outperform for the longer term. Thank you.
Amelia Lee: Thank you, Chris. We'll now open the floor to questions. For those of you in the room with us, please raise your hand to ask a question. Zhiwei please.
Zhiwei Foo: Zhiwei from Macquarie. Congrats on a wonderful set of results. Two questions from me. The first one is regarding your order book, right? I think you're roughly about $17 billion of order book and you have a revenue run rate of about $11 billion this year. So how do we think about your revenue run rate and your order replacement rate? Because from the looks of it you'll run down this by if you don't have a similar amount of order intake? The second question is more on your margins. Now your gross margin is what -- I think you reported 7.4%. And then if you were to just look at second half and net out the provision on onerous contracts to get to about 9%. Then assuming you execute on all your cost savings, that's another $100 million. And then if I'm generous, that adds another 1% of gross margin, which takes us to 10%. So assuming that your cost saving programs work through, you don't -- have no recurrence of provisions. Does that mean that we can start to anchor our thinking of 10% gross margins going forward?
Leng Yeow Ong: I think I'll take the order book question. I think you asked the same question the last half, I remember. And I think that the key thing is about getting close to the customers and home running the opportunities that are out there. This is order book business. And the key thing is about how do we take a look at getting quality -- balance between quality projects that we can get and get it in. The $11 billion, I will say that it will roughly be around there moving forward. This shows that the capacity -- our capacity management has been very sharp because I believe that about 2 years ago, the question from all of you was that, are you sure you can consistently produce $10 billion. So that's out of question. But it will basically hover around there. We think that the capacity would allow us to do that. And if you look at the burn rate, it's not linear. The $17 billion doesn't burn down just like that. So technically, it's also a mix of building up to the order book. And as mentioned last year, even as a very challenging year, we're almost half a year or more than that, that are quiet because of obvious reasons. We still manage the home run quite a bit towards the end of the year. So technically, there are good pipelines in the market. And again, I always said I can't control the FID timing. But we are quite confident that based on the diverse product line that we have now and the franchises that we have seen, we will continue to be the go-to person for some of these more complex projects. So it is a zero-sum game. You have mentioned that we are confident that we are able to maintain that resilience when the projects -- I guess the real answer is that when the projects come into the order book.
Hsueh-Jeng Lu: So on the second question, let me take this. I think if you look at FY 2025, your calculation is correct, right? But I think the bigger picture is this. There are a few factors that we are -- that move in our favor, right? One is you would have seen the legacy projects, the proportion of that is coming down. The contracts that we secured post merger with risk-adjusted mid-teen returns are becoming more important, two. Three, the cost and productivity measures, I think you talked about with the divestment of the yards and all that, that will take out costs directly from overheads. I think the other factor that you have to consider is as projects move along. I think we mentioned this before, when you hit critical milestones, the contingencies that we -- which are costs that we've set aside for certain risks that we anticipated, if they don't materialize, then that will also be released. So I think the margins will continue to improve from where we have achieved today. I think it will -- we've guided towards a project margin of mid-teens. But as you know, there are some overheads in production side, which is related to basically underutilized capacity. So there will -- the number will move towards 15%, but it won't hit 15%. So I think that's the -- that's where we're looking at right now.
Leng Yeow Ong: And just to touch -- come back to the point on order book. At $17 billion, if we've taken a look back in history, it is still one of the highest for the last 10 to 12 years, both combined. But what is different today is that I think you all will appreciate that it's not based on one product. And it is based on milestone payment that it basically is a high-quality order book right now for us to execute. The other thing -- the other point is that we have also been sharing that getting on to the franchise when we signed the very first or the second FPSO or HVDC, there were also a lot of doubts and question whether is it -- are we capable to build on that? I think today, that should put it to rest. What we are -- what I hope everybody sees that the ability to actually deliver a very complex product straight to Brazil field and start operating in 2 months, that actually builds on the reputation and our ability to get the customers on the table in a very short time.
Zhiwei Foo: If I have 2 follow-up questions. You mentioned the contingencies. I understand that they are significant. Could you share some color about how big it may be so that we can appreciate what that actual underlying margin is? Otherwise, the second question is, what would your underlying gross margin be if we were to just look at your project and take out all your other inefficiencies right now?
Hsueh-Jeng Lu: Contingency is commercially sensitive, because -- but there are risks. So each contingency item is tagged to amount, right? And so when the risk goes away, it will be released.
Amelia Lee: Next question from Mayank, please.
Mayank Maheshwari: Yes. Chris, a question -- more subjective question here. There has been a lot of commentary by your largest customer around how they are tightening their screws at their end. Like in terms of conversations you had and considering you were showing the order book being a large part still sitting in LatAm. How do you think about the path going forward? And what are the kind of conversations you're having with them around their objectives and how you are aligning to it? So that was the first question. And the second one, to the CFO, I think congratulations on reducing the interest cost quite a bit. But if you think about it, your interest cost and the finance cost still has a reasonable gap. I think there are lease liabilities and a few other things in there, which are still quite chunky. Can you just give us a bit of an outlook of how you're kind of tightening your screws there?
Leng Yeow Ong: I will take the part on customer conversations. I think tightening of screw whether it is a challenging environment, my customers always tell them that their screws are very tight with us. The key thing is about how then do we sit across the table and determine the work value because it's a balance for them also. There's no lack of competitors and especially after we have proven that our formula worked and we are able to deliver a functioning FPSO directly to the field and startup, and that's a very powerful signal. If you talk about LatAm, obviously, you're talking about mainly Brazil. Of course, they have various different formula now. One is the build, operate and transfer. And it is now mixed with eventual EPC projects coming online. The key thing is about it has different risks, it has different approach. But the fundamental is the ability to execute because all these projects takes many years to execute. And you can see that from their ambition, they have printed out the 5 years of ambition. To be very honest, one of the biggest questions that they had to ask themselves is that can I expect the FPSO to arrive because right now, especially so when you talked about the challenges of the market is very unpredictable and oil prices it can fluctuate and volatility is quite high. But they have their investment case all set up. So I think that you will come online. But the key question is that when will the cash flow be realized, and that is really around the assets that's going to flow there. So I think we have proven ourselves that we are able to execute right on time and able to deliver compared to our competitors deliver something that operates directly with them. The key right now is of course strategy around who we partner up for BOT, the strategy around how can we also make sure that it's seamless. And then for EPC, of course, it's all about cost and price. So I think that, that part itself, I'm happy that we are not starting from ground zero. I think that we have now a very clear database and the organization is very clear on how to execute these type projects. So that is the type of conversations. And even with or out of LatAm, it's the same conversation with majors like Exxon, for Guyana, even new prospects in Africa is basically down to certainty, the ability to provide solution because mega projects, you will have excitement of technology hiccups and all this, how do you then help them to overcome that and still be able to maintain the predictability at the end of the day. That, I think, is a huge value.
Hsueh-Jeng Lu: Mayank, on the second question, look, I think if you look at our finance costs, the largest component is still interest costs, right, to banks and et cetera. I think the key focus for us here is actually around deleveraging. I think we've done a substantial amount of refinancing with the support of our banking partners, but we have to delever. I think you would have seen the operating cash flow significantly improve so then we had to think about where we can allocate capital. Do we use that for growth because we're returning capital to shareholders, but it's also important to delever over time because I think the leverage on a gross level is still relatively high.
Amelia Lee: Next question from Pei Hwa.
Pei Hwa Ho: This is Pei Hwa from DBS. Congrats on the strong results. Just 2 questions from me. One is for Stephen, it's on the provision for your onerous contracts, this is amounted to $96.5 million. Could you give us a bit more color on the breakdown of all this, especially for legacy contracts, it was so close to completion that we didn't expect to have this much. I think second is on the project pipeline, especially from Petrobras and TenneT. Maybe you could give us a bit more color and how based on a conversation with our customer is TenneT on track? Or they still as per plan, will continue to award some contract this year? And also maybe some -- also, I mean, in general, how we think about your order pipeline and the conversion from the $32 billion pipeline to this year?
Hsueh-Jeng Lu: Chris, maybe I'll take the first question first. I think the provisions of our $96 million that relates principally to 3 projects. That's the 2 U.S. projects, which we have since delivered. So you can think of that risk as have gone away, right? I think the reason for additional provisions is because the project took a little bit longer than we wanted, and so there were additional costs associated with that. On the third project, which I mentioned in my speech earlier, was around NApAnt, which was a legacy specialized ship building project that we're delivering in Brazil. And so there were -- the project has delayed and so there are some provisions relating to that. But it's a relatively small project. I think its our initial contract value was about $200 million. And so we're working very closely with the customer to sort of manage that risk going forward.
Pei Hwa Ho: When is this project going to be delivered?
Hsueh-Jeng Lu: 2027. So initially, it was supposed to be end 2026. Now it looks like 2027.
Leng Yeow Ong: I guess for Petrobras, TenneT, and you mentioned about conversion pipeline I wouldn't repeat what I said for Petrobras. I think that's very clear on their development plan and what's going to come online. For TenneT, your question was around whether they are still on track. And the short answer is that as far as we know, yes, because as promised they have gone through the same allocation and competition end of last year. We're quite happy that we are able to land DolWin 5 for -- that's the first Germany unit that we are getting. So that also sets up our potential and production line for both the Netherlands projects and the Germany projects. This year, if my memory serves me correct, and please check and don't quote me because there will be projects coming online for tender in Germany and also followed by Netherlands. When they were FID that when they will start engaging us, that depends on when they are ready. But those projects are real through our conversation. Now on conversion pipeline. As mentioned, the team has worked very hard to deliver value to the customer. We have proven that when we said that we will deliver this way and when we have proven to the customer as One Seatrium, we are able to do that. Customers are also seeing that they are able to assess the different capabilities of different facilities and different teams within the group. So in a very short time within 3 years, we have come together and delivered very differentiating value in terms of being able to provide solutions to the customer. And that's not all talk, and we have delivered that to them. The key thing around conversion of cost is also the -- because of this ability to prove that we are able to do this. There are many people that are trying to come online as competition. So that segment actually is -- but as mentioned in my speech, there are certain segments that we have a very commanding track record. Again, there's no difference from the new build because it's complex, because it requires capability, it requires safety, basically practices within and quality, ability to deliver quality products. We think that this is an exciting area every year. As mentioned, Powership, if you take a look at this segment, why we highlight that, if we believe that the world is starved of power and also digital, AI, the growth of it, I think the floating assets is something that is very sound. The concept is sound. We just have to make sure that our customers are able to take a look at the financial ability around the economics around that. There's also a floating data center. There's many things that in the market that may be too premature for us to say. But all this $2 billion of conversion prospects, I think it ties into the whole energy type of products. And why conversion is because the speed to market is very important. So again, the ability to execute, the ability to engineer on the go and deliver them safely with quality is our hallmark and customers know why they come to Seatrium and why we're able to build on that will be then a track record in the convergence space.
Amelia Lee: Thanks, Chris. Pei Hwa, I hope that answers your question. Next, we will take a question from online. Luis from Citi.
Luis Hilado: Congrats on the good set of results. I just had -- most of everything has been asked. Just 2 housekeeping questions, please. Just to clarify on the $50 million annualized cost savings. Since most of the -- it will conclude in the first half. So it's essentially $25 million savings in the second half. So -- at least in the second half. Is that the way to look at it? And the second question is just I know it's difficult to discuss arbitration cases in terms of timing, but we have a feel for amongst those, which ones can resolve sooner, not when, but which would resolve sooner? And are your legal fees material at all on an annual basis?
Hsueh-Jeng Lu: Luis, you had 2 questions, right? Okay. On the first question on -- sorry, what was that?
Leng Yeow Ong: $50 million.
Hsueh-Jeng Lu: $50 million. Yes, $50 million. A part of that divestments were completed towards the end of '25, right? So that -- a portion of that will be fully baked in from the 1st of January. The MFLs you would have seen we completed in January, and so that will be another component. So I think if you're looking at it over the full year period, it's probably -- if we can complete everything this month, it will be closer to the $50 million than the $25 million.
Leng Yeow Ong: Arbitration, depends, but if you want to ask for which one would probably be settled first. It is all basically time based, right? P-52 will probably be the first one. that will be settled, and we hope that we will have a conclusion this year. You asked whether the legal fees is material? It depends on material against what. But it's never -- of course, that's not always the first avenue that we will go for. But I just want to impress upon that. Actually, arbitration is a professional way of basically settling differences. And usually in this industry, we are able to differentiate what we need to settle while we professionally advance on our both interests on ongoing projects. So yes, P-52 will probably be the first one that we are targeting.
Amelia Lee: Thanks, Luis. Next question, also online from Amanda.
Amanda Battersby: Yes, I'm here. Great. Amanda Battersby from Upstream. Thank you very much for the frank results, statements and sharing as always, Chris and Stephen. A couple of questions, if I may, please. You mentioned that the potential for BOT FPSO contracts, specifically in Latin America and one would think with Petrobras. Are you actively bidding for any BOT work for floaters? And if so, would you be looking for a partner on a project-by-project basis or perhaps a more formal arrangement to allow you to tender to go forwards, please? And the other 2 shorter questions, if I may, do you foresee any more sort of legacy arbitration contracts lurking in the wood work after sometimes more than a decade? And thirdly, please any more plans to rightsize the headcount as some of your projects come to completion?
Leng Yeow Ong: Well, I'll take those questions. Thanks, Amanda. We are missing you here. Well, for BOT contracts, we will definitely need to have a partner and bidding strategy. Whether you'll be project-by-project basis or whether there is a long-term type of tie-up, we have both strategies in place. And it depends on time and space also, right? We have to look at -- I guess the fundamental is that we are in for the bid, and our focus is to win. So it's likewise for partners. Our operating partner would also have the same driver. So it will depend because timing of the tender and potential on both sides on the tender really decides how we choose our partners. Whether we will partner somebody for long term and across all projects, it depends whether the interests align at a point where we are signing up. So I can't have a clear answer, but we are in on the BOT bid for the BOT projects and definitely with an operating partner. On arbitration legacy, I think what I can promise you is transparency. As of now, as mentioned, we do not see that there are any that are lurking. But like what we mentioned, when there are any disagreement that we need to settle is always professionally been elevated to settle an arbitration if we cannot come to terms. So it's very hard for us to actually forecast. But all I can say is as of now, we don't see any. Now about rightsizing I would actually approach the rightsizing question as less of a manpower issue than I think more on the operational excellence angle. I think we have always mentioned about what is our strategy going forward. And I remember 3 years ago, when we talked about integration topic and we talked about how we optimize and during the first year, we did not even remove any headcount. And I think that all of that has basically actually worked out. Our first stance is always to make sure that we take care of our people. When projects are completed or when we get more efficient and our processes get more efficient, retraining has always been the first one, all right? So we are not approaching from a headcount and hire fire approach. But of course, when we look at our yards and our future footprint, which we have always been very transparent in sharing, that is strategic, right? That's strategic. And it's about trimming down the noncore, building on the core and, of course, have an eye of capability building, depending on what products that we are looking at. As we have mentioned, we further invested in the Batam yard to make sure that we have lines ready for offloading -- building and offloading 30,000 tonnes of topsides, which is mainly our HVDC today. We expect to eagerly contest to build a more stronger pipeline behind each of them. So there are a lot of ways that we are looking at rightsizing. The other thing is that one of the actions that we are taking, of course, is in the national news that Admiralty Yard is going to be redeveloped. And we knew that even way before Seatrium was formed. So we are taking that proactive step to actually rechannel resources. And that's the strength of the One Seatrium delivery model. We actually rechannel resources not only to Tuas Boulevard, but also a lot of our high ports and young managers are now in Batam, helping to build up the capabilities over there. So there's many dimensions to that. But I guess the main driver of this question is, I guess, about cost efficiency. And I think that has been the top line strategy that we have always said. We are very sensitive to cost but we are also very sensitive to capabilities, retaining capabilities, retraining capabilities and getting ahead of the curve to be able to service our customers. I think that will differentiate us very strongly.
Amelia Lee: Next question, Siew Khee, please?
Lim Siew Khee: Can I just follow up on the onerous contracts? So given that the U.S. projects have been delivered, can we expect a significant drop in the overall provision for onerous contract?
Hsueh-Jeng Lu: Yes.
Lim Siew Khee: Will it be lower than 2024 because 2023 was high and in 2024, it was not?
Hsueh-Jeng Lu: As I explained earlier, I think there were 3 projects, right? So the remaining risk around NApAnt, but as far as we can see today, there is no need for additional provisions.
Lim Siew Khee: Okay. So within your order book, there's nothing that is looking that you think could delay? So therefore, that would actually help to pave the way for better margins as you execute.
Leng Yeow Ong: Yes. So as I explained earlier, right, I think the key risk was always around the premerger contracts, I think that portion has come down significantly.
Lim Siew Khee: Okay. And just wanted to just check, you mentioned that you hope to all settle the arbitration. Is there a need for any provisions if it's concluded this year?
Leng Yeow Ong: No.
Lim Siew Khee: Is there any need for provisions for any other litigation that you might see be in negotiation?
Leng Yeow Ong: No. Usually, when we talk about provisions, it's about legal opinion on the chances, right? So as of now, whatever that we reported that there's no need for further provision.
Lim Siew Khee: And then just on your order pipeline target. Why did you raise from $30 billion to $32 billion so specific? What's that $2 billion?
Leng Yeow Ong: Well, the other pipeline depends on what projects come into the market. We didn't raise it. It's a customer wanting in the market to basically look at development. These are real projects that are out there.
Lim Siew Khee: Is there anything significantly different or new from compared to when you told us vessels of $30 billion now arriving to $32 billion. So what is the optimism coming from?
Hsueh-Jeng Lu: Maybe I'll take that. So in that...
Leng Yeow Ong: Hang on. It's not optimism. Again, I say that it is the projects that are out there and the real targets that we are going after. So when you talk about what are there any difference, of course, there is no secret that there are a lot more production assets, contracts that are foreseeable in the market and that is basically public. The other point that we are trying to make is, of course, there are also conversion projects. As we mentioned, they are out there in the market. So as we get knowledge and those are the projects that we are going after, we actually actively put it in the pipeline and say that, okay, these are all the go get, but that's to convert into order book.
Hsueh-Jeng Lu: If I may add, the number there is we have an internal pipeline that we track and our commercial teams update very regularly. And so we just summed up that total and then gave that to the market. So these are all actual projects that we are chasing, right? So I think if you were talking about the change, I think, between the $30 billion and the $32 billion, there were some projects that we won, DolWin and then the BP project. And then those were replaced by other projects that customers have now inquired with us on, we want you to submit a bid or we're in bilateral negotiations with them. So it's our actual projects that we are chasing and not managed up, that's what we were trying to say earlier.
Lim Siew Khee: Okay. Just last 2 questions, just on housekeeping wise. So the $50 million cost savings you mentioned, where can we actually see it more significantly, in G&A or of sales?
Hsueh-Jeng Lu: It is in a different -- some of it will be in cost of sales, some of it will be in G&A and some of it will be other operating income. So it's actually in different areas.
Lim Siew Khee: Is there any -- is there one that is like maybe higher, perhaps in cost of sales?
Hsueh-Jeng Lu: It's mostly in the cost of sales because if it's relating to the yard, all of that goes into the COGS line.
Lim Siew Khee: And my last question is, so the divestment gain that you actually guided. $160 million, if it is completed in 2026 will be recognized in 2026, is that right?
Hsueh-Jeng Lu: $150 million.
Lim Siew Khee: $150 milliion will be recognized in 2026.
Hsueh-Jeng Lu: Yes. So $70 million was recognized in FY 2025, another 50 -- and $150 million in 2026.
Amelia Lee: Thanks, Siew Khee. With that, we've come to the end of the briefing. Unfortunately, we've run out of time. For the 2 questions that we received online, we will reach out to you directly on e-mail. For further questions, if you require any further clarifications, please feel free to contact us at our Investor Relations e-mail address. Thank you very much for joining us this morning, and we wish you a very pleasant day ahead. Thank you. Bye.