Seatrium hit by US$475 million contract termination for nearly completed wind vessel; shares drop 7%
The company says that it will ‘explore viable solutions’, including talks with the end-customer, Empire Offshore Wind
[SINGAPORE] Seatrium on Friday (Oct 10) announced that it had received a termination notice for a US$475 million contract inked with a Maersk Offshore Wind affiliate in 2022.
The contract was for the construction of a wind turbine installation vessel at the US offshore wind farm, Empire Wind 1. It is about 98.9 per cent complete.
The company said that it will “explore viable solutions”, including talks with the end-customer, Empire Offshore Wind, a joint venture between Equinor and BP. It did not elaborate on the “allegations” received within the notice of termination.
Shares of Seatrium plunged by as much as 7.8 per cent to S$2.25 in the first 40 minutes of trading on Friday, before inching up to S$2.27 as at 11.05 am. The counter ended on Thursday 0.8 per cent or S$0.02 lower at S$2.44.
The marine engineering company added that it is evaluating its legal and commercial options, including the possibility of legal proceedings for “wrongful termination”. It declined to comment on how much of the contract amount has been paid out so far in response to a query from The Business Times.
The vessel was set to be based on Sembcorp Marine’s in-house design in collaboration with Maersk Supply Service.
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Empire Wind 1 was originally part of a two-phase offshore wind project with Empire Wind 2. Seatrium said earlier that the project was expected to power more than one million New York homes and play a key role in advancing the US’ clean-energy transition.
Seatrium had also won the contracts for the engineering, procurement, construction, offshore hook-up and commissioning of two offshore substations for the Empire Wind 1 and Empire Wind 2 farms.
However, its Empire Wind 2 contract, valued at more than S$250 million, was cancelled in 2024 by Empire Offshore Wind “as a result of the significant macroeconomic conditions”. Still, Empire Offshore Wind had said that the Empire Wind 1 project contract remained “unaffected”.
“We believe the development is likely to have a negative near-term impact on the share price,” said Citi analyst Luis Hilado. “The emergence of any remedies and/or damage control with future disclosure from Seatrium and/or Equinor would be key to watch out for.”
Hilado added that Citi is waiting for data on how much progressive payments were already made, as well as what percentage of completion was reflected in Seatrium’s first-half revenues and profits in 2025.
Seatrium’s net profit for the first half of 2025 grew more than three times to S$144.4 million, up from S$36 million during the same period last year.
