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For
Immediate Release
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29 August
2024
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Hunting PLC
("Hunting" or "the Company" or "the Group")
Unaudited results for the six
months to 30 June 2024
Strong progress towards the
Hunting 2030 Strategic Objectives
Hunting PLC (LSE:HTG), the global,
precision engineering group, today announces its unaudited half
year results for the six months ended 30 June 2024.
Financial Highlights
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Order book increased by 32% to a
record level of $699.5m
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Revenue increased by 3% to
$493.8m
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Gross profit of $135.2m up 18% and
gross margin improved to 27% from 24%
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EBITDA of $60.3m up 23%, with
EBITDA margin of 12% up from 10% in H1 2023
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Adjusted operating profit $40.1m and
adjusted operating profit margin 8% up from 6%
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Adjusted diluted EPS of 15.5 cents
up from 9.6 cents
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Interim dividend declared 5.5 cents
per share (H1 2023 - 5.0 cents), an increase of 10%
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Commenting on the results Jim
Johnson, Chief Executive, said:
"Hunting's balanced and diversified product portfolio has been
decisive in delivering another set of strong results and securing a
record order book, helping to underpin Hunting's continued
growth.
"Over the period, there were strong performances from our
OCTG, Subsea and Advanced Manufacturing product groups. Today's
results demonstrate the strength of offshore and international
markets and steady progress in energy transition markets. Our
success with Kuwait Oil Company demonstrates Hunting's technology
and supply chain leadership, and we are looking to further build on
this success in the coming years. While our Perforating Systems
results have been impacted by the challenging onshore market in the
US, Hunting's technology offering remains compelling for clients,
and will see improvements as and when market conditions
recover.
"I
am delighted with the progress against our Hunting 2030 strategic
ambitions, with management already delivering on many of the key
areas we highlighted to our stakeholders - especially around
revenue diversification, profitability and progressive shareholder
returns. In addition, the acceleration of commercialisation of our
licensed Organic Oil Recovery technology is another great milestone
to report and showcases Hunting's ability to leverage its industry
leading IP to deliver value adding solutions to our global
clients.
"In summary, I would like to thank our leadership team and all
of our staff for their hard work and achievements in the period and
we look forward to the future with confidence."
Financial Summary
Financial Performance Measures
Derived from IFRS
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H1 2024
$m
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H1
2023
$m
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Variance
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Operating
profiti
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40.1
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19.2
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+109%
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Profit before
taxi
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36.2
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15.7
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+131%
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Diluted earnings per
shareii
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15.5c
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6.2c
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+150%
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Net cash inflow / (outflow) from
operating activities
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24.7
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(33.8)
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+173%
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Sales order book
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699.5
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529.7
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+32%
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i Restated for the import tax
provision.
ii. Restated for the import tax provision and associated tax
impact.
Financial Performance
Measures
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H1 2024
$m
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H1
2023
$m
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Variance
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Revenue
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493.8
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477.8
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+3%
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Non-oil and gas revenue
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36.0
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36.1
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EBITDAi/v
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60.3
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49.1
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+23%
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EBITDA
marginii
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12%
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10%
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Adjusted profit before
taxi/iii
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36.2
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23.1
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+57%
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Adjusted diluted earnings per
sharei/iii
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15.5c
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9.6c
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+61%
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Free cash
flowi
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2.8
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(59.5)
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Working capital to revenue
ratio
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46%
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42%
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Total cash and bank /
(borrowings)i
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(9.7)
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(51.7)
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Net assetsvi
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970.8
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850.3
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ROCEi
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8%
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4%
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Interim dividend per share
declared
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5.5c
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5.0c
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+10%
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i Non-GAAP measure ("NGM"). Please see the
2024 Half Year Report and Accounts pages 38 to
43.
ii EBITDA as a percentage of
revenue.
iii Adjusted results exclude adjusting
items.
iv Adjusted operating profit as a percentage of
revenue.
v
Restated following the inclusion of the results from
associates and joint ventures of $0.4m.
vi
Restated for the import tax provision and associated tax
impact.
Outlook Statement
As noted in our July 2024 Trading
Update, Hunting has raised its 2024 full-year EBITDA guidance to
c.$134-138m, reflecting the impact of the Kuwait Oil Company
("KOC") orders to be delivered prior to the year-end, offsetting
trading headwinds seen in the Perforating Systems product group.
The KOC orders will continue to be worked through during H1 2025,
which supports a positive outlook for the Group's trading well into
2025.
The Directors continue to see strong
international and offshore demand given the current price for WTI
crude oil, with tender activity for its OCTG product lines
remaining strong in the Middle East and Asia Pacific. Activity in
South America continues to be robust, while in Africa longer-term
growth opportunities are opening, following oil and gas discoveries
in Namibia and Mozambique.
Management anticipates a firming in
the Henry Hub natural gas price by 2025, which will support onshore
and gas-focused drilling activity in the US and Canada, which will
also enable oil focused drilling to increase given the limitations
on flaring in certain US onshore basins, such as the
Permian.
The Group's Subsea product lines are
pursuing new international opportunities across its three major
product families. Tender activity remains positive with South
America and West Africa remaining key areas of focus.
Energy Transition opportunities will
continue to be pursued, with the Group's focus to be more weighted
towards geothermal markets.
In summary, the Board remains
comfortable with current market consensus with the overall outlook
positive given the activity levels across multiple regions and
product groups and the diversity of Hunting's portfolio.
Corporate Highlights
Strong progress against Hunting 2030 strategic
objectives
The Group continued to deliver
against its 2030 strategic objectives, including progress within
our OCTG, Subsea, Advanced Manufacturing, and Other Manufacturing
product groups, including Energy Transition and non-oil and gas
diversification. Hunting delivered period-on-period revenue growth
of 3% to $493.8m; an EBITDA margin of 12% (H1 2023 - 10%); a
working capital to revenue ratio of 46%; and dividend growth of
10%, all in line with our targets announced at the Capital Markets
Day in 2023 and the Company is, therefore, on track to meet its
2025 financial objectives, which were communicated to stakeholders
last year.
$231 million of OCTG orders secured with KOC
Hunting announced in May and June
2024 that it had secured two orders with KOC for a total of
c.90,000 metric tonnes of OCTG, with the Group's SEAL-LOCK XD™
premium connection applied. The orders are a result of over six
years of collaboration between Hunting, KOC and Hengyang Valin
Steel in China to qualify the Group's connections and OCTG raw
material for the deep gas drilling programmes in Kuwait. The order
will be delivered between Q3 2024 and Q2 2025, with revenue being
recognised across this period.
$60 million of orders secured for the Group's licensed Organic
Oil Recovery technology
In August 2024, Hunting signed a
contract with a major North Sea operator for the treatment of a
number of fields on the UKCS. This order, together with a number of
other orders, have a combined value of up to $60m and are to be
completed over the coming five years. The Directors are delighted
with the commercial progress made in the past year.
Progress with the Energy Transition strategy
The Group has continued to secure
orders for geothermal projects in the US, Europe and Asia Pacific.
Interest and market momentum for geothermal projects continues to
accelerate in California, Germany, the Netherlands and in the
Philippines, with projects being commissioned. Hunting is focusing
its strategy on providing high-value alloy OCTG, tubulars and
premium connections.
Investment in CRA Tubulars B.V.
In August 2024, the Group invested
c.$0.3m in CRA Tubulars B.V. ("CRA"), a developer of novel titanium
and composite tubular technology, for application to energy
transition projects. The investment brings a closer relationship
between Hunting and CRA as its tubular technology is assessed
against stringent mechanical testing by a supermajor E&P
company.
Securing API threading licence at Nashik, India,
facility
The Group's joint venture facility
in Nashik, India, received its API threading licence in May 2024,
which will support new tender activity across India. Management
anticipates that the addressable market in India is c.$300-400m per
year for OCTG and accessories manufacturing, with the Jindal
Hunting Energy Services joint venture being an early mover
in-country, as local content requirements increase.
Continued roll out of new technology to support long-term
growth
The Group continued to introduce new
technologies to clients across most of its product groups
throughout the period. The Group completed qualification and
testing of new premium and semi-premium connections in support of
Hunting's energy-related and Energy Transition growth initiatives.
Hunting Titan is to introduce shortly a 'Tandem' H-4 Perforating
System variant to customers to support more complex well
completions. Subsea Technologies has introduced new stress joint
solutions in the period, supporting its access to new FPSO build
outs for deep and ultra deepwater projects.
Restructuring of Hunting Titan to save c.$6-7 million per
year
In July 2024, the Group announced a
cost saving programme within the Hunting Titan (Perforating
Systems) operating segment due to low market activity within the US
onshore market, which includes the closure of one operating site
and two distribution centres and a workforce reduction of up to 92
employees - being c.15% of Hunting Titan's headcount. The resultant
savings will be c.$6-7m per year, with a saving of c.$3m to be
realised in 2024, which will improve forward trading
performance.
Operational footprint
With the cost reduction programme
ongoing within Hunting Titan, at 30 June 2024, the Group has 25
operating sites (31 December 2023 - 27) and 15 distribution centres
(31 December 2023 - 16). The Nashik facility is not included in
this data as Hunting holds a 49% interest.
Half Year Management Report
For access to the Half Year
Management Report narrative for the six months to 30 June 2024
please click on the following link.
http://www.rns-pdf.londonstockexchange.com/rns/0680C_1-2024-8-28.pdf
The Company has changed its
accounting policies to include within operating profit the
contribution from its share of associates' and joint ventures'
results. The Company's definition of free cash flow has also been
amended to aid comparability, with tangible and intangible capital
expenditure now reported within the free cash flow figure. The
Company's financial statements have also been restated for the 2023
half year to reflect an increase of $7.6 million in provisions held
on the Company's consolidated balance sheet, in respect of the
import tax matter noted on page 4 of the 2024 Half Year
Report.
Financial Statements and Notes to the
Accounts
For access to the Financial
Statements and Notes to the Accounts for the half year ended 30
June 2024 please click on the following link.
http://www.rns-pdf.londonstockexchange.com/rns/0680C_2-2024-8-28.pdf
Page number references refer to the
full Half Year Report.
The linked documents provide access to all financial and
operational disclosures contained in the Group's 2024 Half Year
Report and Accounts and can be accessed at
www.huntingplc.com.
Half Year Results Analyst Briefing and
Webcast
Hunting PLC will host an analyst
briefing and webcast at 9:00am (UK) on
Thursday 29 August 2024, at the offices of CMS at Cannon
Place, 78 Cannon St, London, EC4N
6AF.
The live webcast can be accessed via
the following link.
https://webcasting.buchanan.uk.com/broadcast/66a0f81a27d380a9b7f03ee8
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.
Investor Meet Company Webcast
After this, Hunting's management
will provide a live presentation via the Investor Meet Company
platform commencing at 10:30am (UK). The presentation is open to
all existing and potential shareholders. Questions can be submitted
prior to this presentation via the Investor Meet Company dashboard
up until 9:00am the day before the meeting or at any time during
the live presentation. Investors can sign up to Investor Meet
Company for free and add to meet Hunting PLC at:
https://www.investormeetcompany.com/hunting-plc/register-investor
Investors who already follow Hunting
on the Investor Meet Company platform will automatically be
invited.
For further information please
contact:
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Hunting PLC
Jim Johnson, Chief
Executive
Bruce Ferguson, Finance
Director
lon.ir@hunting-intl.com
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Tel: +44 (0) 20 7321
0123
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Buchanan
Ben Romney
Barry Archer
George Pope
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Tel: +44 (0) 20 7466
5000
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Notes to Editors:
About Hunting PLC
Hunting is a global, precision
engineering group that provides precision-manufactured equipment
and premium services, which add value for our customers.
Established in 1874, it is a listed public company, quoted on the
London Stock Exchange in the Equity Shares in Commercial Companies
("ESCC") category. The Company maintains a corporate office in
Houston and is headquartered in London. As well as the United
Kingdom, the Company has operations in China, India, Indonesia,
Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab
Emirates and the United States of America.
The Group reports in US dollars
across five operating segments: Hunting Titan; North America;
Subsea Technologies; Europe, Middle East and Africa ("EMEA") and
Asia Pacific.
The Group also reports revenue and
EBITDA financial metrics based on five product groups: OCTG,
Perforating Systems, Subsea, Advanced Manufacturing and Other
Manufacturing.
Hunting PLC's Legal Entity
Identifier is 2138008S5FL78ITZRN66.