Hunting PLC (“Hunting” or “the Company” or “the Group”) H1 2024 Trading Update
Highlights
-
Sales order book at
30 June 2024 was c.$700m compared to$565m at31 December 2023 , supported by orders totalling$231m fromKuwait Oil Company (“KOC”). -
H1 2024 trading has been ahead of management’s expectations driven by the strong performance in the Group’s OCTG,
Subsea and Advanced Manufacturing product groups. -
Perforating Systems reported headwinds in the period, leading to the implementation of a cost reduction programme that is projected to save c.
$6m-$7m annually. -
Good progress with Energy Transition strategy, with geothermal orders being secured in
Asia Pacific ,Europe andNorth America . -
EBITDA for the first half of 2024 is likely to be in the range of
$59m-$61m - ahead of management’s expectations and c.22% ahead of H1 2023 and c.13% ahead of H2 2023. - EBITDA margin of c.12% (H1 2023 – 10%; H2 2023 – 12%) delivered in the period and remains on track to achieve 12-13% for the full year.
-
Balance sheet remains robust with total cash and bank / (borrowings) expected to be
$(11)m-$(9)m at30 June 2024 , with a cash inflow of c.$23m in Q2, as cash generation increases.
Outlook
- Outlook for the full year 2024 and 2025 is positive given the KOC orders secured, which will be recognised beginning in Q4 2024 through H1 2025.
-
Group performance for H2 2024 is projected to be ahead of H1 based on performance and cost reduction measures, therefore management is increasing EBITDA guidance for the 2024 full-year to c.
$134m-$138m . -
Management anticipates EBITDA to Free Cash Flow conversion to be c.50% for the full year and are targeting total cash and bank / (borrowings) at
31 December 2024 of between$30m-$40m . -
Based on the quantum of the sales order book, which extends into 2026, management anticipates EBITDA to be in the range of
$160m-$175m for the year ended31 December 2025 . -
Capital expenditure for the full year 2024 is anticipated to be c.
$40m-$45m .
“At c.
“Our business success has supported strong delivery of the Hunting 2030 Strategy. Management remains confident of delivering our EBITDA to Free Cash Flow target of 50% based on our expected financial performance for the remainder of the year.”
H1 2024 Trading Statement
|
H1 2024 |
H2 2023 |
H1 2023 |
|
$m |
$m |
$m |
Sales orderbook |
700 |
565 |
530 |
Revenue |
492 |
451 |
478 |
EBITDAi |
59-61 |
53 |
49 |
EBITDA margin |
12% |
12% |
10% |
Total cash and bank / (borrowings)ii |
(11)-(9) |
(1) |
(52) |
- EBITDA for H1 and H2 2023 has been restated to include the Group’s share of associates’ and joint ventures’ results.
-
Q1 2024 total cash and bank / (borrowings)
$(34)m .
The Group’s sales order book is anticipated to be c.
The monthly revenue run rate in H1 2024 is expected to be c.
EBITDA in H1 2024 is expected to be in the range of
Working capital has increased marginally in the period, however, total cash and bank / (borrowings) is projected to be c.
During Q2 2024, the Company has commenced purchasing its ordinary shares at a monthly rate of c.
Outlook for 2024 and 2025
The outlook for the Group remains positive given the strength of international and offshore markets, which are the primary beneficiaries of global industry capital spend, which is driving momentum within Hunting’s OCTG and
With the inclusion of the impact of the KOC orders, management now anticipates 2024 full year EBITDA to be in the range of c.
In the second half of 2024, management projects that working capital will reduce, driving an EBITDA to Free Cash Flow conversion for 2024 of 50% or greater. Year-end total cash and bank / (borrowings) is now targeted at c.
Capital expenditure for the full year 2024 is anticipated to be c.
Based on the anticipated timing of the KOC order fulfilment, whereby the majority of the revenue and EBITDA will be recognised in in 2025, management anticipates full-year 2025 EBITDA to be in the range of c.
Product Summary
Hunting’s OCTG product group has recorded significant success during the reporting period, led by the two orders totalling
The Perforating Systems product group has reported trading headwinds during H1 2024, driven by industry capital discipline and the lower average natural gas price recorded across the period restricting drilling activity, which has led to a reduction in the US onshore rig count since the start of the year. Well completion activity, particularly in gas-focused shale basins, has reduced significantly with some oil-focused drilling also impacted as operators are unable to flare excess gas produced with crude oil offtake, which has led to the reduction in activity in the Permian basin. Partially offsetting this regional weakness is the strength of international sales totalling c.
Hunting’s
The Advanced Manufacturing product group has reported increased energy-related and non-oil and gas sales in the reporting period. The Electronics business unit has seen good demand for printed circuit boards to major energy services groups as well as demand for medical-related electronics in the period. The Dearborn business unit also reports good demand for its naval, power generation and aviation products, along with its energy-related sales. The Advanced Manufacturing sales order book remains solid, supporting a robust outlook for the second half.
Within Other Manufacturing, the Group’s Organic Oil Recovery Technology continues to be piloted on a number of wells across multiple reservoirs with large operators, enhancing oil recovery through the activation of microbial life within reservoirs.
Operating Segment Summary
As noted above, with the commentary on our Perforating Systems product group, the Hunting Titan operating segment has reported headwinds during the first half of 2024. Revenue is likely to be c.9% lower than in H1 2023, with EBITDA margins of c.2% reflecting lower activity in
The
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The EMEA operating segment has reported mixed results, due to subdued activity in the
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2024
An analyst presentation in respect of the 2024 Half Year Results has been arranged for
After this, Hunting’s management will provide a live presentation via the
https://www.investormeetcompany.com/hunting-plc/register-investor
Investors who already follow Hunting on the
Notes to Editors:
About
Hunting is a global engineering group that provides precision-manufactured equipment and premium services which adds 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;
The Group also reports revenue and EBITDA financial metrics based on five product groups: OCTG, Perforating Systems,
Hunting PLC’s Legal Entity Identifier is 2138008S5FL78ITZRN66.
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lon.ir@hunting-intl.com
Tel: +44 (0) 20 7466 5000
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