REG - Hunting PLC - Unaudited results for the six months to 30/06/22

HuntingAnnouncement

25/08/2022 07:00

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RNS Number : 1424X  Hunting PLC  25 August 2022

 For Immediate Release  25 August 2022

 

Hunting PLC

 

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

 

Unaudited results for the six months to 30 June 2022

 

Hunting PLC (LSE:HTG), the international energy services group, today
announces its results for the six months to 30 June 2022.

 

Financial Summary *

 

 ·        Revenue $336.1m (H2 2021 - $277.2m; H1 2021 - $244.4m)

 ·        Gross profit $75.8m (H2 2021 - $20.9m; H1 2021 - $44.0m)
 ·        Profit from operations $1.7m (H2 2021 - $53.2m loss; H1 2021
 - $26.5m loss)
 ·        Diluted loss per share 2.4 cents (H2 2021 - 34.3 cents LPS;
 H1 2021 - 18.9 cents LPS)

 ·        EBITDA $20.6m (H2 2021 - $6.7m; H1 2021 - $3.6m loss) **
 ·        Adjusting items totalling $nil (H2 2021 - $41.1m; H1 2021 -
 $3.5m)

 ·        Adjusted gross profit $75.8m (H2 2021 - $56.5m; H1 2021 -
 $44.1m)
 ·        Adjusted profit from operations $1.7m (H2 2021 - $12.1m loss;
 H1 2021 - $23.0m loss)
 ·        Adjusted diluted LPS per share 2.4 cents (H2 2021 - 11.0
 cents LPS; H1 2021 - 16.1 cents LPS)

 ·        Total cash and bank of $85.6m (31 December 2021 - $114.2m)***
 ·        Net assets per share 517.4 cents (31 December 2021 - 528.4
 cents)

 ·        Interim dividend declared for H1 2022 of 4.5 cents per share
 (H1 2021 - 4.0 cents)

( )

* - Adjusted results are non-GAAP measures and reflect adjusting items
determined by management. Please refer to pages 35 to 39 of the Half Year 2022

    report for further information.

** - EBITDA is a non-GAAP measure. Please refer to page 36  of the Half Year
2022 report for further information.

*** - Total cash and bank is a non-GAAP measure. Please refer to page 38 of
the Half Year 2022 report for further information.

 

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

 

"The Group's results demonstrate a strong improvement in revenue and earnings
in the period, leading to Hunting returning to monthly pre-tax profitability
during the second quarter. The second half of the year is expected to see
further improvement in earnings, which is supported by our forward sales order
book, which now exceeds the position seen in 2019, providing a positive
outlook for the remainder of the year and into 2023.

 

"Hunting Titan is likely to see further improvements to its trading results,
supported by the increased drilling in North America, in addition to its
growing international profile. The Group's North America operating segment has
seen a strong increase in forward orders across all of its product lines, in
particular the Premium Connection, Accessories Manufacturing, Advanced
Manufacturing and Subsea businesses. The EMEA and Asia Pacific regions are
also seeing further progress, as international drilling activity increases.

 

"Despite recessionary fears, the energy industry is likely to remain on a firm
footing given the macroeconomic and geopolitical movements reported in the
period. Energy security planning will likely support industry growth for
western economies into 2023, with the Company well placed to benefit from this
outlook."

Strategic Highlights:

 

The Group has delivered on a number of strategic objectives during 2022:

 

·           Contract awarded by ExxonMobil for Titanium Stress
Joints on Yellowtail Development in Guyana - in Q1 2022, Hunting was awarded a
contract to supply titanium stress joints ("TSJs") to the ExxonMobil
Yellowtail development in Guyana. The TSJs will be used in a new application
on the Floating Production Storage and Offloading ("FPSO") facility planned
for the project. This opportunity opens up new revenue channels for the Group,
as Hunting's TSJs are now applicable to most FPSO operations globally.

 

·           Contract awarded by CNOOC for Premium Connections and
OCTG - 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 connections and associated OCTG
for an offshore project in China. The order is the largest OCTG and Premium
Connections order win in the Group's recent history and provides further
visibility to revenue and earnings into 2023.

 

·           Strong Development of Non-oil and Gas Order Book within
the Advanced Manufacturing Group - the Dearborn and Electronics businesses
have both successfully increased their respective order books in the period,
which includes significant non-oil and gas work and strong progress in the
power generation, aviation, defence and space sectors. In particular, the
Dearborn business now has a forward sales order book of $81m which comprises
c.80% of non-oil and gas sales and which extends into 2024.

 

·           Commenced Construction of a Premium Connection
Threading Facility in India - during the period, the Group has formally
incorporated a joint venture company in India, with its partner Jindal SAW.
Construction of the new premium connection threading facility has commenced in
Nashik province, with the commissioning date remaining on track for Q1 2023.

 

·           Successful Transition of New OCTG Business Model in the
UK and Netherlands - in December 2021, the Group successfully concluded the
restructuring of its European OCTG business. During H1 2022, the Group
implemented a new manufacturing and service business model, which has led to
improved financial performance for the business.

 

·           Further commercialisation of New Perforating and
Completion Products within Hunting Titan - in H1 2022, Hunting Titan has fully
commercialised the H-3 perforating system and migrated clients to this new,
more efficient well completion system. The operating segment has launched a
new shooting panel used in completion procedures and expanded production of
its detonation cord manufacturing capabilities. In support of US domestic
demand, Hunting Titan is also investing in new perforating system capacity at
its facility in Mexico and has fully re-activated the Oklahoma City
manufacturing facility in the period.

 

·           $150m Asset Based Lending Facility - on 7 February
2022, the Group agreed a $150m Asset Based Lending ("ABL") facility to replace
its $160m Revolving Credit Facility. The ABL is secured against certain US
trade receivables, inventory and freehold properties. During the period and at
30 June 2022, the ABL was undrawn, given the total cash and bank position
reported by the Group.

 

·           Consolidation of Singapore Facilities - during the
period, the Group's Asia Pacific operating segment completed the relocation of
its facilities to a new, single site in the Tuas port region of Singapore. The
new facility incorporates OCTG threading, accessories manufacturing and yard
services, in addition to Hunting's well intervention operations in the region.

 

Financial Highlights

 

·        Revenue $336.1m (H2 2021 - $277.2m; H1 2021 - $244.4m).
Improvement is due to a mix of higher volumes, along with some price increases
on selected product lines.

 

·        Adjusted gross profit margin 23% (H2 2021 - 20%; H1 2021 -
18%). Increase is due to higher volumes and prices in addition to improved
facility utilisation levels.

 

·        The Group reports EBITDA of $20.6m for the six months to 30
June 2022 compared to the EBITDA loss of $3.6m in H1 2021.

 

·        Total cash and bank reported at 30 June 2022 of $85.6m (31
December 2021 - $114.2m). Decline since year-end mainly due to increases in
working capital, as sales order book increased.

 

·        Interim dividend of 4.5 cents per share declared in respect
of H1 2022 (H1 2021 - 4.0 cents), absorbing cash of approximately $7.2m (H1
2021 - $6.4m), payable to shareholders on 28 October 2022, with a record date
of 7 October 2022.

 

·        Net assets as at 30 June 2022 of $853.2m (31 December 2021 -
$871.3m).

 

Half Year Management Report

 

For access to the Half Year Management Report narrative for the six months to
30 June 2022 please click on the following link.

 

(http://www.rns-pdf.londonstockexchange.com/rns/7963J_1-2021-8-25.pdf)
http://www.rns-pdf.londonstockexchange.com/rns/1424X_1-2022-8-24.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1424X_1-2022-8-24.pdf)

 

Financial Statements and Notes to the Accounts

 

For access to the Condensed Consolidated Financial Statements and Notes for
the six months to 30 June 2022 please click on the following link.

 

(http://www.rns-pdf.londonstockexchange.com/rns/7963J_1-2021-8-25.pdf)
http://www.rns-pdf.londonstockexchange.com/rns/1424X_2-2022-8-24.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1424X_2-2022-8-24.pdf)

 

The attached documents provide complete access to the Group's 2022 Half Year
Report. The Report can also be accessed at www.huntingplc.com
(http://www.huntingplc.com) .

 

Analyst Webcast

 

Hunting PLC will host an analyst meeting and webcast on Thursday 25 August
2022 commencing at 9:30a.m. BST.

 

The live webcast can be accessed via the following link:

 

https://webcasting.buchanan.uk.com/broadcast/62c3e5e9fb4bba516c45330c
(https://webcasting.buchanan.uk.com/broadcast/62c3e5e9fb4bba516c45330c)

 

Analysts 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.

 

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 (mailto:LON.IR@hunting-intl.com)

 Buchanan                                                   Tel: +44 (0) 20 7466 5000

 Ben Romney

 Jon Krinks

 Hannah Ratcliff

 

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 operating segments: Hunting Titan;
North America; Europe, Middle East and Africa ("EMEA"); and Asia Pacific.

 

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

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