Results for the year ended 31 December 2022

RNS Number : 5926R

Hunting PLC

02 March 2023

 

For Immediate Release

2 March 2023

Hunting PLC

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

Results for the year ended 31 December 2022

Strong performance in 2022 and well positioned for 2023 with demand

 continuing to improve for all segments

Hunting PLC (LSE:HTG), the international energy services group, today announces its results for the year ended 31 December 2022.

Financial Highlights

· Order book increased by 124% to $473.0m.

· Revenue increased by 39% to $725.8m.

· Gross margin improved to 24% from 12%.

· Return to profitability with EBITDA of $52.0m and adjusted profit from operations of $14.6m.

· Total dividends declared in the year of 9.0 cents per share.

Financial Summary

Financial Performance measures as defined by the Group*

	2022	2021	Variance
Revenue	$725.8m	$521.6m	+39%
EBITDA**	$52.0m	$3.1m	+$48.9m
Adjusted profit (loss) from operations**	$14.6m	$(35.1)m	+$49.7m
Net assets	$846.2m	$871.3m	-$25.1m
Total cash and bank**	$24.5m	$114.2m	-$89.7m
Adjusted diluted earnings per share**	4.7 cents	(27.1) cents	+31.8 cents
Final dividend proposed***	4.5 cents	4.0 cents	+0.5 cents

Financial Performance measures as derived from IFRS

	2022	2021	Variance
Profit (loss) from operations	$2.0m	$(79.7)m	+$81.7m
Diluted earnings per share	(2.8) cents	(53.2) cents	+50.4 cents

* Adjusted results exclude adjusting items agreed by the Audit Committee and Board.

** Non-GAAP measure ("NGM"). Please see the 2022 Annual Report and Accounts pages 240 to 246.

*** Payable on 12 May 2023 to shareholders on the register on 21 April 2023, subject to approval at the Company's AGM.

Commenting on the results Jim Johnson, Chief Executive, said:

"I am pleased with the Group's performance this year, delivering good results in a period of commodity price volatility and macro-economic uncertainty. Whilst certain challenges remain, we are confident that we will deliver a strong performance in the year ahead, with Hunting exceptionally well positioned to benefit from increased investment in energy security and higher demand for energy as China continues to re-open post COVID.

"Whilst our commitment to our growth plans in oilfield services remains rock solid, I am delighted to be launching our Hunting 2030 Strategy today that includes increased investment to enhance our growth in other complementary markets, including the energy transition."

Operational and Corporate Highlights

Strong increases in activity across all operating segments as higher commodity prices support new global drilling projects.
· External sales order book increased 124% during the year to $473.0m (2021 - $211.5m).
· Revenue visibility increased due to level of order book, which now extends into 2025.
139% increase in sales order book within the Subsea Technologies division to $105.1m.
· The Subsea Spring business unit has grown materially during the year, following new orders for steel and titanium stress joints for the Gulf of Mexico and South America.
· Record $48m order received in October 2022 to apply stress joints to FPSO units.
Record OCTG contract awarded by CNOOC for Premium Connections and Accessories.
· In August 2022, the Group's Asia Pacific operating segment was awarded a contract for OCTG that management estimates to be worth up to $86m for Hunting's proprietary SEAL-LOCK XD™ premium connection.
· Vast majority of order to be delivered in 2023.

Strong development of non-oil and gas sales order book within the Advanced Manufacturing group.
· The Dearborn business now has a sales order book of $71.3m, which comprises c.68% of non-oil and gas sales.
· The Electronics business now has a sales order book of $49.8m, which comprises c.14% of non-oil and gas sales.
Construction of a new threading facility in India commenced with Jindal SAW to support domestic activity.
· Facility to be operational during Q2 2023 with three premium connection threading lines.
· 162,000 sqft facility is located in Nashik Province, adjacent to Jindal's steel mill.
· Hiring of employees and QA training underway.
Formation of global Energy Transition group to build sales in geothermal and carbon capture market sub-sectors.
· Hunting is pursuing a broad range of sales opportunities in these growing low carbon sub-sectors, leveraging its position in OCTG and accessories, valves and couplings and subsea products to drive growth.
· The Board has set a revenue target of $100m of sales within this area by the end of the decade.
$150m Asset Based Lending facility agreed in February 2022 .
· Borrowing base secured against certain North American freehold property, inventories and trade receivables.
· Facility agreed with four-year tenor.
· The facility provides an appropriate funding base to pursue growth opportunities.

Outlook Statement

The outlook for energy continues to be highly robust, given the demand projections for the year ahead, which continue to indicate a daily requirement of c.102m barrels of crude oil per day - or an increase of c.1.5m to 2.0m barrels per day over what was seen in 2022. The outlook for natural gas remains strong, as customers of Russia-origin natural gas move to other global LNG suppliers.

Despite some macro-economic concerns, the re-opening of China and material under investment in new oil and gas production since 2019 will likely lead to continued growth for all industry participants.

Commentators continue to project an average oil price for the year ahead of between $75 to $100 per barrel, which is a range that will support new activity in all basins globally. Overall, the short to medium term market outlook remains strongly positive given the economic fundamentals driving the global demand for oil and gas.

For Hunting, all the Group's businesses are seeing improving demand as onshore and offshore projects increase.

Across North America, investment in drilling is projected to grow further, following a strong performance in 2022. This will lead to a steady growth in the demand for our perforating systems, OCTG and accessories businesses.

Our newly formed Subsea Technologies operating segment has delivered strong growth in its revenue profile and sales order book over the past two years. This has been predominantly driven by the Subsea Spring business unit, but with strong market projections for subsea trees and SURF products, Hunting is well placed to capture strong growth in all of our deep water orientated technologies. These opportunities also extend to Hunting's OCTG and accessories businesses, which supply many offshore clients with critical components.

The Advanced Manufacturing group has built a robust sales order book during 2022, which reflects our pursuit of non-oil and gas sales as well as our existing energy-focused product lines.

With the newly formed Energy Transition sales group, Hunting is also well placed to drive a further diversification in our revenue profile, with a primary focus on geothermal and carbon capture projects, as announced separately today.

The EMEA and Asia Pacific operating segments continue to see strong increases in enquiries. There is likely to be good progress in the Middle East, as drilling investment increases, which will drive a return to profitability in the year ahead for these segments.

In summary, Hunting remains in a good position to invest in the market upturn to grow revenue and profitability in the year ahead. Management is targeting further EBITDA margin expansion as price increases, improved facility utilisation and production efficiencies continue to be pursued.

Overall, Hunting has demonstrated its resilience during the industry challenges associated with the effect of COVID-19, which is due to Hunting's committed and skilled workforce, underpinned by a world class HSE performance.

I would like to thank all of our employees for helping to guide Hunting through a particularly challenging period, but now look forward to a new growth phase in our chosen industry and our Company.

Group Results Narrative

For access to narrative on the Group's results (incorporating the Chairman's and Chief Executive's Statements, Outlook, Market Analysis, Group Review and Segmental Review) for the year ended 31 December 2022 please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/5926R_1-2023-3-1.pdf

Financial Statements and Notes to the Accounts

For access to the Financial Statements and Notes to the Accounts for the year ended 31 December 2022 please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/5926R_2-2023-3-1.pdf

 

Listing Rules / Disclosure Guidance and Transparency Rules Information

For access to Hunting's Key Performance Indicators, Business Model and Strategy, ESG, Risk Management (including Principal Risks), and the Statement of the Directors' Responsibilities for the year ended 31 December 2022, please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/5926R_3-2023-3-1.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 2022 Annual Report and Accounts. The complete 2022 Annual Report and Accounts will be published on 16 March 2023 and can then be accessed at www.huntingplc.com .

The financial information set out in the above links does not constitute the Company's statutory accounts for the years ended 31 December 2022 or 31 December 2021, but is extracted from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were unqualified, did not draw attention to any matter by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) of the Companies Act 2006. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with IFRS.

Analyst Briefing and Webcast

Hunting PLC will host an analyst briefing and webcast at the offices of Buchanan (107 Cheapside, London, EC2V 6DN) on 2 March 2023 commencing at 9:30a.m. GMT.

The live webcast can be accessed via the following link:

https://webcasting.buchanan.uk.com/broadcast/63bd5edbdd6e71503201641c

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 [e-mail] .

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 principal operations in Canada, China, Indonesia, Mexico, Netherlands, Singapore, United Arab Emirates and the United States of America.

For the year ended 31 December 2022, the Group reports across four segments: Hunting Titan, North America, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

From 1 January 2023, the Group is reporting across five segments: Hunting Titan, North America, Subsea Technologies, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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