Hunting PLC (“Hunting” or “the Company” or “the Group”) Results for the year ended 31 December 2023
Strong year of revenue and profit growth, supported by international and offshore markets
Financial Highlights
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Order book increased by 19% to
$565.2m . -
Revenue increased by 28% to
$929.1m . -
Non-oil and gas revenue increased 59% from
$47.6m to$75.9m . - Gross margin improved to 25% from 24%.
-
EBITDA, ahead of previous guidance provided, and increased by 98% to
$103.0m . - EBITDA margin of 11% up from 7%.
-
$83.1m of previously unrecognised deferred tax assets recognised at year-end. -
Total dividends declared in the year of
10.0 cents per share, up from9.0 cents in 2022.
Commenting on the results
“Hunting has delivered a strong year of growth across most of its product groups, demonstrating the underlying strength of our market drivers, with security of supply and affordable energy remaining key investment themes.
“Our offshore and international businesses have delivered robust growth as we continue to build a more balanced and diversified business, underpinned by the strong technology and intellectual property that makes Hunting a market leader in precision engineered products across our markets.
“The growth and composition of our record order book demonstrates how much Hunting has evolved in terms of more diverse revenue and better visibility on earnings, and provides confidence in our near and longer-term outlook, as we deliver the Hunting 2030 Strategy.”
Strategic Highlights
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Launch of Hunting’s 2030 Strategy at the Capital Markets Day in
September 2023 which included:- Leveraging Hunting’s global presence and high-technology product offering, to drive multiple end-market sales growth.
- Delivering EBITDA margin growth through higher utilisation, stronger pricing and operating efficiencies.
- Improved shareholder returns, with increased return on capital, along with an 11% increase in total declared dividends in 2023.
- Driving sector leading technology delivered through innovation and supported by robust intellectual property.
- Progressing the sustainability agenda with positive trends in key non-financial metrics.
-
Strong progress on revenue diversification with non-oil and gas sales of
$75.9m . -
EBITDA conversion and good cash generation reported with
$50.9m inflow delivered in H2 2023.
Financial Summary
Financial Performance measures as defined by the Group*
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2023 |
2022 |
Variance |
Revenue |
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Non-oil and gas revenue |
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EBITDA** |
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EBITDA margin** |
11% |
7% |
+4pp |
Adjusted profit before tax** |
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Adjusted diluted earnings per share** |
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Free cash flow** |
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Total cash and bank** |
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- |
Net assets |
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ROCE** |
6% |
1% |
+5pp |
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Final dividend proposed*** |
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Financial Performance measures as derived from IFRS
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2023 |
2022 |
Variance |
Operating profit |
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Profit before tax |
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Diluted earnings per share |
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Net cash inflow (outflow) from operating activities |
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* Adjusted results exclude adjusting items agreed by the Audit Committee and Board.
** Non-GAAP measure. Please see the 2023 Annual Report and Accounts pages 239 to 244.
*** Payable on
Outlook Statement
The global outlook for energy in the year ahead will be driven by similar themes to those reported in 2023.
Geopolitical tensions and potential supply disruptions are a continuing threat to the oil and gas supply/demand balance, and while commodity prices trended lower in the past year, it is likely that they will remain in a range that supports sustained activity levels during 2024.
Offshore market momentum is poised to continue to increase in the coming years as major development cycles in
The North American onshore drilling market is likely to be stable during 2024, with the US more focused on oil production. Additional LNG capacity is likely to come on-stream later in the year, which will support new natural gas drilling in the second half. Projected growth in international sales should also offset shifts in US onshore market dynamics.
The
In
Across
For Hunting, the Group’s OCTG product group should deliver another year of growth, as activity in
Our Subsea Spring and
Hunting will continue to drive its non-oil and gas diversification through the Advanced Manufacturing businesses. Momentum remains strong, with opportunities in aerospace and defence being pursued, supporting our 2030 strategic objectives.
In summary, the Board sees a further year of growth ahead, given our diverse, international product offering, with management remaining comfortable with current market guidance.
Operational and Corporate Highlights - Delivering on the Hunting 2030 Strategy
Record
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On
30 May 2023 , the Company announced a record contract that management estimates to be worth up to$91m withCairn Oil and Gas , Vedanta Limited, for the supply of Hunting’s SEAL-LOCK XDTM premium connection along with OCTG.
Continued launch of new technology and innovative products
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The Group continues to develop and introduce new technology to clients. Research and development initiatives focus on increasing in-field safety, while also delivering completion efficiencies and lowering drilling and development costs for clients. With approximately one-third of North American horizontal wells relying exclusively on oriented perforating techniques, Hunting launched the H-4 Perforating System™ during the year, first to the US onshore and then in Q4 2023 to customers in
Canada .
Expansion into high growth Indian energy markets
-
In Q2 2023, the Company completed the construction and commissioning of its new threading facility at
Nashik Province ,India , with its joint venture partner, Jindal SAW Ltd. The official opening of the facility took place inSeptember 2023 . Hunting’s precision engineered premium connection technology will be applied to Jindal SAW’s premium seamless casing and tubing.
Strong growth in
-
The
Subsea Technologies operating segment was formed on1 January 2023 . The segment completed a number of significant orders in the year, especially inGuyana , as investment in offshore projects increased. Revenue increased 43% to$98.6m , with an EBITDA margin of 14% compared to 5% in 2022. The Spring business had a number of material order wins for its titanium stress joints in the year for floating production, storage and offloading vessels inGuyana and the Turkish area of theBlack Sea . The segment ended the year with an order book of$152.2m , including a strong backlog for Enpro.
Enhanced strategic supply channels for OCTG to support energy transition strategy
-
On
5 June 2023 , the Company announced a ten-year strategic alliance with Zhejiang Jiuli Hi-Tech Metals Co. Ltd (“Jiuli”), for the supply of corrosion resistant alloys (“CRA”) for OCTG, geothermal and carbon capture and storage (“CCUS”) applications. The partnership brings together Hunting’s SEAL-LOCKTM premium connection technology with Jiuli’s CRA, such as duplex/super duplex and high nickel-based alloys, for downhole casing and production tubing applications, which meet some of the harshest well conditions in the traditional oil and gas industry as well as the emerging CCUS and geothermal markets.
Entered new marketing, manufacturing and technology partnership to expand product offering
-
On
13 July 2023 , Hunting announced a collaboration agreement withCRA-Tubulars B.V. , to further develop the Company’s presence in energy transition markets. The collaboration provides the Company with access to novel titanium composite tubing technology, which is showing strong potential in CCUS project applications.
Continued restructuring to increase operational efficiencies and returns on capital
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Hunting is continuing to drive stronger internal operational efficiencies throughout its global footprint, which will lower our operating costs and lower our carbon footprint. During the year, Hunting Titan closed its
Oklahoma City operating site and transferred the manufacture of perforating systems to the Group’sPampa, Texas , andMonterrey, Mexico , facilities. A distribution centre has been retained inOklahoma City to continue to service clients in theMid-Continent Region of the US.
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Within the EMEA operating segment, the manufacturing and assembly operations of the Group’s main well testing site are to be transferred from
the Netherlands toDubai in 2024, which will lead to the closure of a facility at Velsen-Noord, with activities inthe Netherlands to be merged into a single location.
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In
January 2024 , further consolidation of our footprint and cost base in theUK continued as the Enpro operations were transferred to the existing Badentoy,Aberdeen facility.
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During H1 2023, the Group has completed a disposal process of all but one of its US onshore and offshore oil and gas producing assets, which are held by Hunting’s wholly owned subsidiary,
Tenkay Resources, Inc (“Tenkay”). The Group has negotiated the transfer of the majority of the non-producing assets and respective future plug and abandonment liabilities, which have reduced Hunting’s possible exposure to future decommissioning costs.
Group Results Narrative
For access to narrative on the Group’s results (incorporating the Company Chair’s and Chief Executive’s Statements, Outlook, Market Analysis, Product Line and Segmental Review and Group Financial Review) for the year ended
http://www.rns-pdf.londonstockexchange.com/rns/8690E_1-2024-2-28.pdf
Financial Statements and Notes to the Accounts
For access to the Financial Statements and Notes to the Accounts for the year ended
http://www.rns-pdf.londonstockexchange.com/rns/8690E_2-2024-2-28.pdf
Listing Rules / Disclosure Guidance and Transparency Rules Information
For access to Hunting’s Key Performance Indicators, Business Model and Strategy, ESG and Sustainability, Risk Management (including Principal Risks), and the Statement of the Directors’ Responsibilities for the year ended
http://www.rns-pdf.londonstockexchange.com/rns/8690E_3-2024-2-28.pdf
Page number references refer to the full Annual Report when available.
The linked documents provide access to all major financial and operational disclosures contained in the Group’s 2023 Annual Report and Accounts. The complete 2023 Annual Report and Accounts will be published on
The financial information set out in the above links does not constitute the Company’s statutory accounts for the years ended
Analyst Briefing and Webcast
The live webcast can be accessed by copying and pasting the following link into your browser:
https://stream.buchanan.uk.com/broadcast/65b93d2f6371e5b884f62831
Analysts and investors wishing to participate in a Q&A session can do so by submitting questions via the chat function of the webcast and these will be addressed by management during the live webcast. If you have any queries relating to this then please email hunting@buchanan.uk.com.
Notes to Editors:
About
Hunting is a global engineering group that provides precision-engineered equipment and premium services, which add value for our customers. Established in 1874, it is a premium listed public company traded on the
The Group reports in US dollars across five operating segments: Hunting Titan;
Hunting PLC’s Legal Entity Identifier is 2138008S5FL78ITZRN66.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229335201/en/
For further information please contact:
lon.ir@hunting-intl.com
Tel: +44 (0) 20 7321 0123
Buchanan
Tel: +44 (0) 20 7466 5000
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