REG - Hunting PLC - Results for the year ended 31 December 2022

HuntingAnnouncement

02/03/2023 07:01

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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
(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
(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
(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 (http://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
(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 hunting@buchanan.uk.com
(mailto:hunting@buchanan.uk.com) .

 

For further information please contact:

 

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

 Jim Johnson, Chief Executive

 Bruce Ferguson, Finance Director

 lon.ir@hunting-intl.com

 Buchanan                           Tel: +44 (0) 20 7466 5000

 Ben Romney

 Jon Krinks

 

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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