Hunting PLC (LSE:HTG), the global engineering group, is delighted to announce that it has secured a $145 million OCTG order with KOC through our distributor in Kuwait.
The order comprises a large quantity of premium OCTG casing, to be supplied by Hunting via its end-to-end integrated OCTG supply chain in Asia Pacific. The casing will be threaded with Hunting’s proprietary SEAL-LOCK premium connection technology at its facilities across Asia Pacific, with revenue expected to be recognised from late Q4 2024 and into 2025.
Hunting has leading-edge manufacturing capabilities across Asia Pacific, India and the Middle East and since 2019 has invested to establish a leading strategic supply chain, manufacturing capacity and connection technology offering to support the Group’s international OCTG growth ambitions and to support KOC and other key customers’ operational needs across this important region. Delivering the highest quality OCTG products on time together with Hunting’s unsurpassed service offering remains key to the Group’s success.
Including this new order, the Group’s sales order book has increased to c.$665 million, which is the highest in the Company’s history and provides strong earnings visibility for the Group’s Asia Pacific operating segment and OCTG product group into 2025.
Given the quantum of this order, management now expects EBITDA to be towards the top end of its current guidance of $125-135m for 2024. Given the timing of revenue recognition and working capital movements, more detailed guidance for full year 2024 will be provided in the Company’s H1 2024 Trading Statement.
The order supports the Hunting 2030 Strategy to deliver revenue and profit growth through its OCTG product line, particularly in geographies such as the Middle East where drilling activity continues to be strong and is likely to be so to the end of the decade.
The order will be funded from the Group’s existing $150 million Asset Based Lending facility and, in addition, accelerated receivable solutions and bank acceptance bonds are also being put in place to shorten the overall cash conversion cycle. Previous guidance on working capital efficiency targets remains unchanged.
Hunting PLC’s next Trading Statement will be announced on Tuesday 9 July 2024.
Commenting on the KOC order win, Jim Johnson, Hunting’s Chief Executive, said:
“We would like to thank KOC for this order and look forward to working with them over the coming months as we deliver on this material order.
“This OCTG order win is the largest in the Company’s history and underscores our Hunting 2030 strategic ambitions, combining our leading premium connection technology and strong end-to-end integrated supply chain in Asia Pacific. The Group’s OCTG product team has worked incredibly hard to qualify the OCTG feedstock and connections technology with KOC and today’s announcement is testament to their stellar work collaborating with our many stakeholders.
“Furthermore, the order enhances Hunting’s order book to its highest ever backlog, which provides strong visibility on earnings for the OCTG product line and Group as a whole, thereby underpinning management’s confidence in the outlook.”