Year-End Trading Update

RNS Number : 7476J

Hunting PLC

15 December 2022

 

For Immediate Release

15 December 2022

Hunting PLC

("Hunting" or "the Company" or "the Group")

Year-End Trading Update

Hunting PLC (LSE: HTG), the international energy services group, today issues a year-end trading update ahead of announcing its 2022 Final Results on Thursday 2 March 2023.

Highlights

· 2022 trading and financial outturn remains in line with market expectations, with an EBITDA of c.$50m projected.

· Hunting's sales order book continues to improve following further order wins within the Subsea Technologies business group. The Group's total sales order book now approaches c.$500m.

· 2023 market expectations raised with an EBITDA target in the range of c.$85m-$90m - previously c.$80m.

· Formation of global Energy Transition sales group to pursue carbon capture, geothermal and other low carbon technologies.

Jim Johnson, Chief Executive of Hunting, commented:

"2022 has been a year of rebuilding for the industry with 2023 now likely to be a strong year of growth for the Group. All of our operating segments are reporting good levels of enquiries, and with our order book now approaching $500m, our earnings visibility for the year ahead is robust, despite recessionary fears.

"The formation of our Energy Transition global sales group is another step in our strategy to expand our revenue base to new and complementary sub-sectors of the energy industry. Hunting is well placed to capture a meaningful market share in the component supply chain for many low carbon projects, given the alignment of current technologies with the traditional oil and gas industry and the international commitments made by governments to reduce carbon emissions."

Trading Statement

Trading in Q4 2022 has remained in line with management's expectations with EBITDA still anticipated to be c.$50m for the full year.

The Group's sales order book has continued to strengthen through the quarter and now approaches record levels of c.$500m, following a further large order win for titanium stress joints and accessories for a client operating in South America. This order book will mainly be delivered during 2023; however, due to the long delivery cycles of certain product lines, a proportion of sales will be recognised in 2024 and 2025.

Hunting Titan continues to report steady sales across North America as clients maintain activity levels. New opportunities continue to be pursued in South America, with drilling and completion activity accelerating as unconventional resources are developed, coupled with the continued migration of clients to new technology. In the coming months, Titan is to launch the H-4 perforating system, which is a self-orientating system that improves the accuracy of completions and which will provide new sales opportunities in Titan's core markets of the US and Canada.

Within the North America operating segment, the Premium Connection, Accessories Manufacturing and Subsea business units continue to report strong momentum. Further, the performance of the Advanced Manufacturing group has continued to report improving results through the quarter, as supply chain constraints lessen.

The EMEA operating segment also reports improving results, supported by the Tubacex contract for Brazil. The Group's Netherlands facility is now operating three shifts in support of this contract, with a second shift being added in Aberdeen in support of the order, and as broader activity levels increase across the region.

In Asia Pacific, the segment has reported steadily improving performance since the middle of the year as drilling activity in the Middle East and South East Asia increases. The segment has commenced the CNOOC order, which will see revenue and profits being recognised in 2023.

The Group's balance sheet remains strong, with net assets as at 30 November 2022 of c.$847m. Cash and bank was $24m as at 30 November 2022, with a year-end position likely to be c.$20m as raw material purchases continue to support the Group's order book. Capital expenditure for the full year is now anticipated to be up to c.$20m.

2023 Trading Expectations

Given the record sales order book noted above, the Board now believes that 2023 will see a stronger performance than anticipated previously. EBITDA for the year ahead is now targeted at $85m-$90m - previously c.$80m.

Formation of Energy Transition Sales Group

The Board of Hunting PLC is pleased to announce the formation of a new Energy Transition global sales group to pursue energy transition opportunities. Following a review of its portfolio of products and geographical presence, the Group has formed the new sales group under the leadership of Sean O'Shea. Sean has a strong engineering and sales background and has worked within Hunting's EMEA and Asia Pacific operating segments developing the Group's international sales presence across many of Hunting's product lines.

Given the opportunities to participate in geothermal and carbon capture projects, with many initiatives being announced in Asia Pacific, Europe and the US, the Group will utilise its engineering expertise across all of its current operating segments to participate in this important market segment.

Hunting's key product lines, which naturally align with energy transition markets, include the Group's broad range of premium and semi-premium connections; its pipe supply businesses and supply chain channels; its accessories manufacturing capabilities, including couplings and valves; in addition to existing intervention and subsea products, all of which align with both onshore and offshore carbon capture and geothermal projects. Furthermore, the Group's licenced Organic Oil Recovery technology will form part of the business group, which continues to see high levels of interest with major oil and gas companies.

For further information please contact:

Hunting PLC Jim Johnson, Chief Executive Bruce Ferguson, Finance Director [e-mail]	Tel: [phone]
Buchanan Ben Romney Jon Krinks	Tel: [phone]

Notes to Editors:

About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.

The Group reports in US dollars across four segments: Hunting Titan, North America, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

From 1 January 2023, the Group will be reporting across five segments: Hunting Titan, North America, Subsea Technologies, EMEA and Asia Pacific.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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