REG - Hunting PLC - AGM, Q1 2024 Trading Update & Directorate Change

HuntingAnnouncement

17/04/2024 07:01

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RNS Number : 8661K  Hunting PLC  17 April 2024

 For Immediate Release  17 April 2024

 

 

Hunting PLC

 

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

 

AGM and Q1 2024 Trading Update

and

Directorate Change

 

Hunting PLC (LSE:HTG), the global engineering group, issues the following
Trading Update for Q1 2024, ahead of its Annual General Meeting that will take
place today at 10:30a.m. BST in London.

 

Highlights

 

·          Positive start to the year, with EBITDA of c.$28.9
million during Q1 2024 (Q1 2023 - c.$22.4 million), marginally ahead of
management's expectations.

·          Sales order book remains healthy at c.$544.0 million (Q1
2023 - c.$492.9 million), with tender pipeline for new OCTG orders remaining
buoyant.

·          OCTG and Subsea product groups reporting a good first
quarter, ahead of management's expectations, as offshore and international
activity continues to be strong.

·          Advanced Manufacturing business also reporting a
positive quarter, with a good mix of energy and non-oil and gas sales.

·          Perforating Systems has reported a slower first quarter,
as US onshore markets remain soft; however, the outlook for H2 remains more
positive as international activity is projected to drive new drilling.

·          Total cash and bank / (borrowings) of c.$(33.6) million
at quarter-end reflecting new orders, which are driving higher inventory and
receivables.

·          Full-year guidance remains unchanged with both EBITDA of
c.$125-135 million and EBITDA margin of 12-13% targeted. EBITDA to Free Cash
Flow conversion of 50% still anticipated for the full year, driven by
increased EBITDA and robust working capital management.

 

Commenting on Q1 2024 trading and the market outlook, Hunting's Chief
Executive, Jim Johnson said:

 

"The year has started positively for the Group, with Q1 2024 results
marginally ahead of management's expectations, and well ahead of the Q1 2023
result, which demonstrates the continued growth momentum of the Group. Our
OCTG, Subsea and Advanced Manufacturing product groups are continuing to see
strong momentum as offshore and international activity remains robust. While
Perforating Systems has had a slow start to the year, H2 2024 is likely to see
stronger activity as increased LNG exports in the US drive natural gas demand.

 

"It is particularly pleasing to see our Q1 2024 EBITDA result surpassing the
Q4 2023 result, given the strong result delivered in the prior quarter, with
Subsea being our standout performer this quarter.

 

"2024 is likely to be a further year of growth for the industry driven by
geopolitical and macro-economic factors. Therefore, management remains
confident of delivering its current EBITDA guidance, given the broad-based
strength of the global oil and gas sector."

 

Trading Statement

 

 $ million                           Q1 2024  Q4 2023  Q1 2023
 Sales order book                    544.0    565.2    492.9

 Revenue                             244.9    228.1    211.5
 EBITDA                              28.9     28.2     22.4
 EBITDA margin                       12%      12%      11%

 Working Capital                     469.6    415.9    456.5

 Total cash and bank / (borrowings)  (33.6)   (0.8)    (59.8)

 

EBITDA in Q1 2024 was c.$28.9 million, which compares to c.$22.4 million in Q1
2023 and $28.2 million in Q4 2023. EBITDA margin remains in line with
management's expectations with full-year guidance remaining between 12-13%, as
product mix, some higher product pricing and stronger facility utilisation
continue to improve performance.

 

Driven by the current sales order book, coupled with some forward purchasing
of raw materials associated with imminent projects, working capital has
increased in the quarter. Management remains confident of delivering a
reduction in inventory throughout the balance of the year, which will release
cash and, coupled with the improved EBITDA, remains focused on delivering an
EBITDA to Free Cash Flow conversion of c.50%. The final dividend recommended
for 2023 of 5.0 cents per share is due for payment on 10 May 2024, following
shareholder approval on 17 April 2024, which will absorb c.$7.9 million.

 

The Group's OCTG product lines have commenced the year strongly, with activity
in North and South America and Asia Pacific supported by buoyant levels of
offshore and international projects. Tender activity across the Middle East
has remained very positive in the period, which supports the projected revenue
growth in this product line in the short to medium term. OCTG accessories
manufacturing has continued to deliver good results supported by strong
activity in South America, specifically in Guyana and Brazil.

 

Results for the Group's Subsea product lines have been strong during Q1 2024,
as orders for titanium and steel stress joints, hydraulic valves and couplings
and flow access modules have increased, given the strong offshore drilling
environment.

 

The Group's Advanced Manufacturing product lines continue to report good
growth as energy-related and non-oil and gas sales momentum continue to
increase.

 

Hunting's Perforating Systems product lines continue to target increasing
international sales as market activity in South America and the Middle East
continue to improve. The onshore US market has been less resilient in the
period due, in part, to the lower activity and soft pricing for natural gas.
However, activity levels are projected to improve in the second half of the
year as new LNG capacity comes on stream in the US, which will support higher
exports.

 

In summary, the majority of the Group's product lines have reported a positive
start to the year, leading to management retaining its full-year EBITDA
guidance of $125-135 million.

 

Directorate Change

 

As previously announced, Jay Glick, Company Chair, will be retiring as a
Director at the conclusion of the AGM with Stuart Brightman succeeding Mr
Glick as Hunting PLC's Company Chair.

 

The Board thanks Jay for his services to the Company since 2015, chairing the
Company from 2017 and overseeing the Group through the COVID-19 pandemic and
subsequent recovery. Jay has overseen the rollout of the Hunting 2030 Strategy
which was launched at the Company's Capital Markets Day in 2023 and which
continues to be executed by management.

 

Date of H1 2024 Trading Statement

 

Hunting PLC's next Trading Statement will be announced on Monday 8 July 2024.

 

For further information please contact:

 

 Hunting PLC                        Tel: +44 (0) 20 7321 0123

 Jim Johnson, Chief Executive

 Bruce Ferguson, Finance Director

 Buchanan                           Tel: +44 (0) 20 7466 5000

 Ben Romney

 Barry Archer

 

or

 

lon.IR@hunting-intl.com

 

Notes to Editors:

 

About Hunting PLC

 

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 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 China, 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.

 

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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