Hunting (HTG) H1 2024 earnings summary

Executive summary

• Record order book at $699.5 million, bolstered by $231 million Kuwait Oil Company and $60 million Organic Oil Recovery contracts, with strong international and offshore growth offsetting U.S. and Titan business softness.

• Revenue grew 3% year-over-year to $493.8 million, with EBITDA up 23% to $60.3 million and operating profit more than doubling to $40.1 million, led by subsea and advanced manufacturing.

• EBITDA margin increased to 12% from 10% last year, with a 61% rise in EPS and positive free cash flow of $2.8 million.

• Restructuring actions, especially within Hunting Titan, completed to align with US market outlook and drive medium-term performance, with expected annual savings of $6–7 million.

• Guidance maintained with EBITDA expected between $134–$138 million and margin of 12–13%.

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).

• Diluted EPS: 15.5 cents (up from 6.2 cents); gross margin: 27% (up from 24%).

• Free cash flow: $2.8 million (vs. $59.5 million outflow in H1 2023); net debt: $41.4 million (up from $33.4 million at year-end 2023); working capital to annualised revenue: 46%.

• Dividend increased by 10% to 5.5 cents per share; return on capital at 7.5%, targeted to rise.

• Subsea EBITDA margin reached 23%, up from 8% year-over-year.

Outlook and guidance

• 2024 EBITDA guidance of $134–$138 million with margin of 12–13%; capex expected at $30–$35 million.

• Order book provides visibility: $400 million revenue in 2024, $250 million in 2025, $50 million in 2026.

• Free cash conversion expected at 50%, with year-end cash balance of $30–$40 million.

• Offshore and international markets expected to drive continued growth, with improved FCF generation in H2.

• Anticipated recovery in US onshore drilling as natural gas prices firm in 2025.