Hunting (HTG) H2 2023 earnings summary

Executive summary

• FY23 revenue rose 28% to $929.1m and EBITDA nearly doubled to $103.0m, with stronger activity across OCTG, Advanced Manufacturing and Subsea.

• Adjusted diluted EPS increased to 20.3¢ from 4.7¢; the year-end sales order book reached a record $565.2m, up 19%.

• H2 cash generation accelerated, including a Q4 cash inflow of $67.2m; FY24 guidance targets EBITDA of $125m–$135m.

Financial highlights

• Revenue was $929.1m, up 28% YoY; oil and gas revenue was $853.2m and non-oil and gas revenue was $75.9m, up 59%.

• Adjusted EBITDA rose 98% to $103.0m; adjusted operating profit was $61.0m versus $14.6m, and adjusted profit after tax was $35.9m versus $8.9m.

• Adjusted gross profit was $227.7m, with a 25% gross margin; adjusted EBITDA margin increased to 11% from 7%.

• Adjusted diluted EPS rose 332% to 20.3¢ from 4.7¢; total dividend per share increased 11% to 10.0¢.

Outlook and guidance

• FY24 EBITDA guidance is $125m–$135m, with an EBITDA margin of 12%–13% and an effective tax rate of 25%–28%.

• FY24 capex guidance is $35m–$45m, with free cash flow conversion post-capex targeted at 50%.

• The $565.2m year-end order book supports visibility into 2024 and beyond; international and offshore markets are expected to drive further growth.

• The Nashik facility business plan anticipates a $9m–$10m profit-after-tax contribution by 2026; API accreditation was expected in March 2024.