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For
Immediate Release
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6 March
2025
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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
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Sales order book $508.6m.
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Revenue increased by 13% to
$1,048.9m.
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Non-oil and gas revenue
$75.1m.
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Gross margin improved to
26%.
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EBITDA increased by 23% to
$126.3m.
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EBITDA margin of 12% up from
11%.
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Adjusted diluted earnings per share
31.4 cents, up 11.1 cents.
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Free cash flow of
$139.7m.
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Cash and bank / (borrowings)
$104.7m, an increase of $105.5m from $(0.8)m.
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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.
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Non-cash impairment recorded within
the Hunting Titan operating segment, totalling $109.1m.
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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.
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2025 EBITDA guidance of $135-$145m
retained, with EBITDA to Free Cash Flow conversion targeted at
50%.
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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
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1.
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Retain focus on global oil and gas opportunities, specifically
growing international, subsea and offshore
business
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$231m of contracts secured with Kuwait Oil
Company
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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.
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Continuation of major orders from ExxonMobil and TPAO for
Hunting's titanium and steel stress joints
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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.
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API
threading licence at Nashik, India, facility
secured
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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.
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Five-year manufacturing agreement with
Chevron
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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.
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2.
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Deliver sales order book and revenue progress in non-oil and
gas, energy transition and low carbon solutions
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Orders with an expected total value of $60m for licensed
Organic Oil Recovery technology
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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.
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$14.7m of energy transition sales completed in the
year
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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.
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Strategic partnership expansion with CRA-Tubulars
B.V.
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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.
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$0.9m investment in Cumberland Additive
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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.
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3.
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Strong focus on long-term profitability of the
Group
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Restructuring of the Hunting Titan operating
segment
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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.
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Restructuring of the EMEA operating segment
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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.
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Expansion of manufacturing in Dubai
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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.
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Expansion of collection of greenhouse gas
data
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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.
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Financial Summary
Financial Performance measures as
defined by the Group*
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2024
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2023*
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Variance
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Revenue
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$1,048.9m
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$929.1m
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+$119.8m
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Non-oil and gas revenue
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$75.1m
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$75.9m
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-$0.8m
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EBITDA**
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$126.3m
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$102.4m
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+$23.9m
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EBITDA margin**
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12%
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11%
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+1pp
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Adjusted profit before
tax**
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$75.6m
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$50.0m
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+$25.6m
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Adjusted diluted earnings per
share**
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31.4 cents
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20.3
cents
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+11.1
cents
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Free cash flow**
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$139.7m
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$(0.5)m
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+$140.2m
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Total cash and bank /
(borrowings)**
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$104.7m
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$(0.8)m
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+$105.5m
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Net assets
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$902.3m
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$950.1m
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-$47.8m
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ROCE**
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9%
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6%
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+3pp
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Final dividend proposed
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6.0 cents
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5.0
cents
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+1.0
cents
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*restated
**non-GAAP measure see pages 255 to
262 of the 2024 Annual Report and Accounts.
Financial Performance measures as
derived from IFRS
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2024
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2023*
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Variance
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Non-cash goodwill
impairment
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$109.1m
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$nil
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+$109.1m
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Operating (loss) profit
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$(21.1)m
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$51.5m
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-$72.6m
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(Loss) profit before tax
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$(33.5)m
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$41.1m
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-$74.6m
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Diluted (loss) earnings per
share
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(17.6)
cents
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65.9
cents
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-83.5
cents
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Net cash inflow (outflow) from
operating activities
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$188.5m
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$49.3m
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+$139.2m
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*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
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
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
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.
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
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.
For further information please
contact:
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Hunting PLC
Jim Johnson, Chief
Executive
Bruce Ferguson, Finance
Director
lon.ir@hunting-intl.com
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Tel: +44 (0) 20 7321
0123
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Buchanan
Ben Romney
Barry Archer
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Tel: +44 (0) 20 7466
5000
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or
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lon.IR@hunting-intl.com
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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.
