Hunting (HTG) H1 2024 earnings summary

Executive summary

• Record order book of $699.5 million, up 32% year-over-year, driven by strong international and offshore demand, especially in subsea and OCTG product lines, providing visibility into 2025.

• Major contract wins include $231 million from Kuwait Oil Company and $60 million in Organic Oil Recovery contracts, supporting robust financial results and energy transition progress.

• Revenue grew 3% year-over-year to $493.8 million, with EBITDA up 23% to $60.3 million and EPS up 61% to 15.5 cents.

• Restructuring actions in Hunting Titan, including site closures and workforce reductions, are expected to save $6–7 million annually.

• Dividend increased by 10% to 5.5 cents per share.

Financial highlights

• Revenue: $493.8 million (up 3% year-over-year); EBITDA: $60.3 million (up 23%); operating profit: $40.1 million (up from $19.2 million); profit before tax: $36.2 million (up from $15.7 million).

• Subsea revenue up 85% to $78.7 million, EBITDA margin at 23%; Advanced Manufacturing revenue up 16% to $61.7 million, margin 9%.

• Free cash flow improved to $2.8 million (from a $59.5 million outflow in H1 2023); net debt at $41.4 million.

• Gross margin increased to 27% (from 24%); working capital to annualised revenue stable at 46%.

• Return on capital employed at 7.5%, up from 4.0% year-over-year.

Outlook and guidance

• 2024 EBITDA guidance raised to $134–138 million, margin 12–13%, with a target of 15% by end of 2025.

• Free cash flow conversion post capex targeted at 50%, with projected cash and borrowings of $30–40 million.

• Strong international and offshore demand expected to continue into 2025, with robust tender activity and backlog near $1 billion.

• Subsea and OCTG expected to drive future growth; Titan recovery anticipated as gas prices and rig counts improve.

• Energy transition focus to increase, especially in geothermal and carbon capture markets.