Seatrium shares hit after customer terminates $616m contract for almost completed wind vessel
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Seatrium said the vessel, which was slated for use in a US offshore wind farm, is already 98.9 per cent completed.
PHOTO: MAERSK SUPPLY SERVICE
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SINGAPORE – Seatrium said on Oct 10 that its customer Maersk Offshore Wind sent a notice of termination a day earlier for a US$475 million (S$616.2 million) contract to build a vessel that is already 98.9 per cent completed.
The company’s shares sank on the news, closing down 6.6 per cent, or 16 cents, to $2.28 on Oct 10. The stock was the most heavily traded by value, with 57.2 million shares changing hands.
The contract was won by subsidiary Sembcorp Marine Rigs & Floaters, now known as Seatrium Energy (International), back in March 2022.
The wind turbine installation vessel was slated for use in a US offshore wind farm, Empire Wind 1.
Seatrium said it will explore viable solutions, including with the end customer, Empire Offshore Wind. It is currently reviewing the validity of the notice of termination, as well as the allegations within, the company said.
Seatrium also said it is evaluating its legal and commercial options, including the right to contest the notice of termination and/or begin legal proceedings for wrongful termination.
The company said it will make announcements when there are material developments and advised shareholders to exercise caution when dealing with its shares.
Seatrium posted a 301 per cent jump in net profit to $144 million for the first half of 2025.
As at end-June, its net order book stood at $18.6 billion, of which $6.3 billion was for renewables and cleaner/green solutions, comprising 25 projects with deliveries until 2031.
The once-promising US wind energy industry has come under attack by US President Donald Trump, who has cancelled millions in funding for offshore wind projects.
Adverse economic developments, including inflation and high interest rates, have also eroded profitability for offshore wind farms, which cost billions of dollars to build.
Orsted, the world’s biggest offshore wind farm developer, announced on Oct 9 it will cut about 2,000 jobs
Investment company A.P. Moller Holding in 2023 acquired Maersk Supply Service, which included the offshore wind business. In 2024, it sold the majority of Maersk Supply Service to Oslo-listed offshore company DOF but retained the offshore wind business, which was launched as Maersk Offshore Wind.
The vessel Seatrium was building was for the Empire Wind offshore wind farm being developed by Norwegian energy giant Equinor off the coast of Long Island, New York, to power approximately 500,000 homes with clean energy.
In April, the Trump administration halted construction of the wind farm to conduct a further review of the project. After this, Equinor said the project may miss its construction window in 2025 and subsequently enter commercial operation later. However, in May, the US government allowed the project to resume offshore work.
