REG - Hunting PLC - Results for the year ended 31 December 2024

HuntingAnnouncement

06/03/2025 07:15

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RNS Number : 5493Z  Hunting PLC  06 March 2025

 For Immediate Release  6 March 2025

 

Hunting PLC

 

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

 

Results for the year ended 31 December 2024

 

Strong year of revenue and profit growth, supported by international and
offshore markets

 

LONDON, England. Hunting PLC (LSE:HTG), the precision engineering group, today
announces its results for the year ended 31 December 2024.

 

Financial Highlights

 

 ·                 Sales order book $508.6m.
 ·                 Revenue increased by 13% to $1,048.9m.
 ·                 Non-oil and gas revenue $75.1m.
 ·                 Gross margin improved to 26%.
 ·                 EBITDA increased by 23% to $126.3m.
 ·                 EBITDA margin of 12% up from 11%.
 ·                 Adjusted diluted earnings per share 31.4 cents, up 11.1 cents.
 ·                 Free cash flow of $139.7m.
 ·                 Cash and bank / (borrowings) $104.7m, an increase of $105.5m from $(0.8)m.
 ·                 Total dividends declared in the year up 15% to 11.5 cents per share, up from
                   10.0 cents in 2023. The dividend payment date will be 9 May 2025, with a
                   record date of 11 April 2025 and an ex-dividend date of 10 April 2025.
 ·                 Non-cash impairment recorded within the Hunting Titan operating segment,
                   totalling $109.1m.
 ·                 Adjusted profit before tax of $75.6m in 2024, compared to $50.0m in the prior
                   year. Statutory loss before tax, after impairment, of $(33.5)m, compared to a
                   profit before tax of $41.1m in 2023.
 ·                 2025 EBITDA guidance of $135-$145m retained, with EBITDA to Free Cash Flow
                   conversion targeted at 50%.

 

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

 

"I would like to thank our workforce and senior leadership team for delivering
a further year of revenue, EBITDA and adjusted earnings growth, despite the
volatile energy markets reported in 2024. Hunting continues to deliver on its
2030 strategic objectives, supported by strong offshore and international
markets. Our cash generation in the year has also been outstanding, and we now
look to deploy this to acquisitive growth and investments to enhance
productivity and stronger dividend distributions."

 

2024 Strategic and Operational Highlights

 

 1.                            Retain focus on global oil and gas opportunities, specifically growing
                               international, subsea and offshore business

 ·                             $231m of contracts secured with Kuwait Oil Company
                               Product group: OCTG

                               In H1 2024, the Group announced the securing of record orders with KOC for
                               OCTG threaded with Hunting's proprietary SEAL-LOCK XD™ premium connection.
                               The orders are a result of over five years of collaboration between Hunting,
                               KOC and Hengyang Valin Steel in China to qualify the Group's connections and
                               OCTG raw material. The order commenced in July 2024 and will continue into
                               2025.

 ·                             Continuation of major orders from ExxonMobil and TPAO for Hunting's titanium
                               and steel stress joints
                               Product group: Subsea

                               Throughout 2024, the Group continued to execute on major orders for its
                               titanium and steel stress joints ("TSJs"). The large orders for TSJs received
                               in 2023 were worked on through the year for Guyana and the Black Sea. Orders
                               were completed for the Yellowtail project in Guyana in the year, with work on
                               the Uaru and Whiptail projects continuing into 2025.

 ·                             API threading licence at Nashik, India, facility secured
                               Product group: OCTG

                               The Group's joint venture facility in Nashik, India, received its API
                               threading licence in May 2024, which will support new tender activity across
                               India. Management anticipates that the addressable market in India is
                               c.$300-$400m per year for OCTG and accessories manufacturing, with the Jindal
                               Hunting Energy Services joint venture being an early mover in-country, as
                               local content requirements increase to meet India's growing energy
                               requirements.

 ·                             Five-year manufacturing agreement with Chevron
                               Product group: OCTG

                               Hunting's US OCTG business entered into a new five-year manufacturing
                               agreement with Chevron in the Gulf of Mexico, which will support the OCTG
                               product group to the end of the decade.

 2.                            Deliver sales order book and revenue progress in non-oil and gas, energy
                               transition and low carbon solutions

 ·                             Orders with an expected total value of $60m for licensed Organic Oil Recovery
                               technology
                               Product group: Other Manufacturing

                               In August 2024, the Group received orders which, dependent on volumes and
                               assumed extensions, could result in up to $60m of revenue for the deployment
                               of its licensed OOR technology into the North Sea. The orders were secured
                               with two major operators on the UK Continental Shelf and will be delivered
                               over the next five years.

 ·                             $14.7m of energy transition sales completed in the year
                               Product group: OCTG

                               Hunting continued to win OCTG orders for geothermal and carbon capture
                               projects in North America, Europe and Asia Pacific in the year. Orders for
                               projects in the utility and agriculture sectors were won in the Netherlands,
                               supporting Hunting's long-term strategy of revenue diversification.

 ·                             Strategic partnership expansion with CRA-Tubulars B.V.
                               Product group: OCTG

                               In August 2024, Hunting secured the exclusive sales, manufacturing, and
                               distribution rights for $0.3m for CRA-Tubular's novel titanium-lined carbon
                               fibre tubing, which has strong long-term market growth opportunities in carbon
                               capture projects in North America and Europe, for five years. The
                               collaboration will enable the Company to accelerate further testing of
                               tubulars and connections against key connection standards, which is being
                               assessed by a super major.

 ·                             $0.9m investment in Cumberland Additive
                               Product group: Advanced Manufacturing

                               In September 2024, Hunting invested a further $0.9m in Cumberland Additive,
                               taking our interest to 30.7%, which will enable us to access 3D manufacturing
                               opportunities across multiple sectors and applications.

 3.                            Strong focus on long-term profitability of the Group

 ·                             Restructuring of the Hunting Titan operating segment
                               Product group: Perforating Systems

                               Over the last 12 months Hunting has delivered cost savings in the segment to
                               align with the long-term outlook for the US onshore completions market. The
                               Wichita Falls operating site and a number of distribution centres were closed
                               in the year. In March 2025 as part of wider cost savings initiatives, further
                               restructuring was announced which included a 5% reduction in headcount to
                               deliver additional SG&A savings.

 ·                             Restructuring of the EMEA operating segment
                               Product group: OCTG

                               With the further decline in North Sea oil and gas activity, primarily driven
                               by UK political ambitions to decarbonise its energy supply chain, a
                               restructuring of the Group's EMEA operations was announced in January 2025.
                               Annual cost savings are expected to be c.$8-$9m.

 

 ·                 Expansion of manufacturing in Dubai
                   Product group: OCTG / Other Manufacturing

                   During the year, the well testing product line continued its move from the
                   Netherlands facility to Dubai together with Singapore's well intervention
                   product line to increase efficiencies and to be closer to our customers and
                   pipeline of opportunities.

 ·                 Expansion of collection of greenhouse gas data
                   Product group: All product groups

                   The Group expanded its scope 3 greenhouse gas data collection to include the
                   Subsea Technologies, EMEA and Asia Pacific operating segments following on
                   from the collection of Hunting Titan's scope 3 data for the first time in
                   2023.

 

Financial Summary

 

Financial Performance measures as defined by the Group*

 

                                        2024        2023*       Variance
 Revenue                                $1,048.9m   $929.1m     +$119.8m
 Non-oil and gas revenue                $75.1m      $75.9m      -$0.8m
 EBITDA**                               $126.3m     $102.4m     +$23.9m
 EBITDA margin**                        12%         11%         +1pp
 Adjusted profit before tax**           $75.6m      $50.0m      +$25.6m
 Adjusted diluted earnings per share**  31.4 cents  20.3 cents  +11.1 cents
 Free cash flow**                       $139.7m     $(0.5)m     +$140.2m
 Total cash and bank / (borrowings)**   $104.7m     $(0.8)m     +$105.5m
 Net assets                             $902.3m     $950.1m     -$47.8m
 ROCE**                                 9%          6%          +3pp

 Final dividend proposed                6.0 cents   5.0 cents   +1.0 cents

*restated

**non-GAAP measure see pages 255 to 262 of the 2024 Annual Report and
Accounts.

 

Financial Performance measures as derived from IFRS

 

                                                      2024          2023*       Variance
 Non-cash goodwill impairment                         $109.1m       $nil        +$109.1m
 Operating (loss) profit                              $(21.1)m      $51.5m      -$72.6m
 (Loss) profit before tax                             $(33.5)m      $41.1m      -$74.6m
 Diluted (loss) earnings per share                    (17.6) cents  65.9 cents  -83.5 cents
 Net cash inflow (outflow) from operating activities  $188.5m       $49.3m      +$139.2m

*restated

 

Outlook Statement

 

The Group has delivered excellent growth in adjusted earnings in 2024.

 

2025 should see steady growth in revenue and adjusted earnings as all market
indicators point to further progress due to prevailing energy demand. The
Directors anticipate an acceleration in activity in the second half of the
year and into 2026, as market and geopolitical tail winds increase with robust
commodity supply and demand dynamics supporting activity in the year ahead.

 

In the US, the new administration is indicating robust support for oil and
gas, with energy security and appropriate pricing to drive economic growth.
This will likely lead to continued activity across North America, but also new
opportunities offshore as Gulf of Mexico licensing and LNG capacity permitting
should increase to support broad-based upstream and downstream growth. While
the political narrative is strong, company-level narrative indicates that the
industry will likely retain capital discipline.

 

Balancing this growth drive, OPEC+ countries will likely unwind their
production cuts during 2025, but at a rate which maintains stability across
the market. The ongoing conflict in Ukraine and fragile peace across the
Middle East will also be key factors in commodity pricing. Drilling discipline
across North America will likely be balanced by pricing discipline.

 

A further factor is the introduction of international tariffs. This area is
highly dynamic at the time of writing. While the Directors do not see an
impact on our businesses given how our segments and supply channels are
structured, the disruption across international markets in general may lead to
unforeseen challenges.

 

For Hunting, the senior leadership team and Directors will continue to focus
on those areas which are within our control.

 

As demonstrated in 2024, we have made solid progress on our 2030 journey, but
there is still much to do in the coming year to continue this momentum. The
Company is committed to capitalising on its proven precision engineering
capabilities in energy services to drive growth and earnings, while further
diversifying its revenue streams. As previously outlined, we have a
disciplined capital allocation policy and our strong balance sheet gives us
firepower to pursue value accretive M&A in the year ahead to grow and
diversify our portfolio and revenue and earnings in line with the strategic
goals outlined at Hunting's Capital Markets Day in September

2023. The Group has evaluated numerous acquisition opportunities and continues
to adopt a disciplined approach to M&A. The Board continues to look at
subsea, intelligent well completions, and complementary non-oil and gas
opportunities to drive increased EBITDA and capital returns in line with our
2030 targets.

 

We are excited about our position within global OCTG markets and see new
Subsea opportunities opening up around the middle of the year. The Middle East
and South America remain key areas of growth, given the tender activity across
these regions. Management is focused on optimising the performance of our
Perforating Systems business. Hunting Titan continues to deliver strong
technology and services to our clients, and with a higher natural gas price,
coupled with the completion of targeted cost cutting measures, a good increase
in profitability within this important product group should be delivered.
Steady progress within the Advanced Manufacturing group is also anticipated as
more non-oil and gas opportunities are captured.

 

The Directors are also excited about the prospects of the Organic Oil Recovery
technology. Our progress with clients in the North Sea in 2024 should lead to
more orders in the region and internationally as customer acceptance
accelerates.

 

In the year ahead we also hope to make further progress in our chosen Energy
Transition markets as the number of geothermal projects continues to increase
and carbon capture projects are further progressed.

 

The Company continues to make progress towards the medium-term EBITDA margin
target of 15% and is pleased to announce a 15% increase in the total dividend
declared, ahead of our 2030 target of c.10% per annum. We have been pleased
with the Group's strong improvement in ROCE and we continue to target at least
15% as a short range target.

 

Finally, the management team remains focused on cost reduction and efficiency
gains across our asset base. With the restructuring of our EMEA operating
segment, which will remove a drag on the Group's earnings and returns, coupled
with the cost reduction initiatives within Hunting Titan and our Head Office
functions, further gains in profitability should be captured in the year
ahead.

 

In summary, the Directors see good progress in the year ahead to deliver our
growth objectives.

 

We look to the future with confidence.

 

Group Results Narrative

 

For access to narrative on the Group's results (incorporating the Company
Chair's and Chief Executive's Statements, Outlook, Market Analysis, Product
Line and Segmental Review and Group Financial Review) for the year ended 31
December 2024 please click on the following link.

 

http://www.rns-pdf.londonstockexchange.com/rns/5493Z_1-2025-3-5.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5493Z_1-2025-3-5.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 2024 please click on the following link.

 

 

http://www.rns-pdf.londonstockexchange.com/rns/5493Z_2-2025-3-5.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5493Z_2-2025-3-5.pdf)

 

Listing Rules / Disclosure Guidance and Transparency Rules Information

 

For access to Hunting's Key Performance Indicators, Business Model and
Strategy, ESG and Sustainability, Risk Management (including Principal Risks),
and the Statement of the Directors' Responsibilities for the year ended 31
December 2024, please click on the following link.

 

http://www.rns-pdf.londonstockexchange.com/rns/5493Z_3-2025-3-5.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5493Z_3-2025-3-5.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 2024 Annual Report and Accounts. The
complete 2024 Annual Report and Accounts will be published on 18 March 2025
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 2024 or 31
December 2023, but is extracted from those accounts. Statutory accounts for
2023 have been delivered to the Registrar of Companies and those for 2024 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
UK adopted 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 RBC,
100 Bishopsgate, London, EC2M 1GT on 6 March 2025 commencing at 9:00a.m. GMT.

 

Attendees should arrive by 8:45a.m. to clear building security in good time.

 

The live webcast can be accessed by copying and pasting the following link
into your browser:

 

https://webcasting.buchanan.uk.com/broadcast/67976d68f6f7a6723286c20c
(https://url.usb.m.mimecastprotect.com/s/hnk3Cxo02OSJkNmJt8fQTyT2AJ?domain=webcasting.buchanan.uk.com)

 

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

 Barry Archer

 or
 lon.IR@hunting-intl.com

 

 

About Hunting PLC

 

Hunting is a global, precision engineering group that provides
precision-manufactured equipment and premium services, which add value for our
customers. Established in 1874, it is a listed public company, quoted on the
London Stock Exchange in the Equity Shares in Commercial Companies ("ESCC")
category. 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, India, 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.

 

The Group also reports revenue and EBITDA financial metrics based on five
product groups: OCTG, Perforating Systems, Subsea, Advanced Manufacturing and
Other Manufacturing.

 

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

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