Good
morning,
everybody.
For
all
those
here,
thank
you
for
struggling
through
the
Tube
strikes
and
everything
else
to
make
it
here
today.
For
those
listening
online,
good
morning
or
good
evening
from
wherever
you're
at.
And
thanks
for
taking
time
to
join
us
on
our
call.
I'm
going to
start
off
on
the
page
1
that
says
the
world
has
changed.
But
before
I
get
into
the
details
on
that,
a
lot
of
things
have
changed
more
recently
in
the last
seven
days,
more
–
as
much
so
in
the
last
month
or
so.
But
one
of
the
changes
that
I
just
want
to acknowledge
today
is
with
Richard
Hunting.
So,
Richard
after –
Richard
is
leaving
the
board
and
he's
ending
50
years
of
service
with
the
company.
So,
Richard,
on
behalf
of
all
the
employees
and
all
of
us
at
the
team,
we
just
want
to thank
you
for
your
contribution
over
the
years
and
wish
you
a
great
retirement.
So,
I
just
wanted
to go
and
say
that
first
before
we
get
into
this.
R
Richard Hugh Hunting
Non-Executive Director, Hunting Plc
Thank
you, Jim.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
So, thanks.
Getting
into
the
presentation
now,
as
I
mentioned,
it
is
amazing
the
changes
that
we've
seen
in
the
outlook
for
our
business
and
in
the
world
just
in
the
last
couple
months.
When
I
talk
to
everybody,
all
the
analysts
and
investors
on
that
like
a
year
ago,
I
made
the
comment
that
2021
would
be
a
year
of
healing
within
the
industry.
Well,
that
healing
definitely
happened,
and
all
you
have
to
do
is
look
at
the
earnings
announcements
from
the
major
E&P
companies
around
the
world
and
look
at
the
amount
of
cash
that
these
companies
have
been
throwing
off
in
the
last
12
months.
They
have
reduced
debt
dramatically.
They
have
paid
increased
dividends.
They
have
bought
back
shares.
They've
done
about
everything,
but
put
a
lot
of
money
back
into
the
drill
bit.
And
we
had –
in
most
of
2021,
Wall
Street
has
just
been
thrilled
with
this,
and
you've
seen
the
uptick
in
share
price
and
the
like.
So,
fast
forward
now
to
the
end
of
this
year,
even
taking
away
the
fact
of
the
crisis
in
the
Ukraine,
we
ended
up
in
2021
probably
with
the
most
momentum
I've
seen
going
forward
in
the
company
in
at
least
the
last
couple
years.
And
so,
we'll
talk
a
lot
more
about
that
as
we
go
forward.
But
the
key
points
for
us
were
the
COVID
restrictions
are
finally
being
lifted,
and
I
can't
overstate
enough
the
effect
that
COVID
has
had
on
our
operation
and,
I
believe,
everybody
else
in
the
oilfield
service
business
for
the
last
two
years.
So,
the
results
that
we
showed
today –
I
mean,
it
was
a
tough
year,
just
as
a
reference
point,
realize
that
in
2021,
we
had
the
whole
year
of
COVID.
And
2020
is
the
reference
we
go
back
to.
I
have
to
remind
people,
we
actually
had
a
good
Q1
in
2020,
so
when
you're
looking
at
the
comparisons.
But
2021
is
definitely
the
bottom.
COVID
was
a
horrible –
I
mean,
a
horrible
operating
environment
throughout
the
group.
When
we
saw
the
rise
of
the
new
variant
hit
the
world,
it
very
much
affected
our
results,
especially
in
December
and
January,
because
due
to
social
distancing
and
what
we
had
to
do
with
government
regulations,
it
just
made
it
a
horrible
operating
environment
and
a
huge
struggle
to
the
tune
that
we
could
quantify
over
$1
million
of
effect
to
the
bottom
line
in
each
of
the
months
of
December
and
January.
So,
the
good
news
is
that
is
over.
It
is
improving
in
February.
And
we
look
forward
to
putting
this
behind
us
as
all
the
people
in
the world
do
and
getting
the
economy
going
forward
without
these
constraints.
The
effect
over
the
last
couple
– on
the
last
couple
days,
energy
security,
I'm
putting
on
there,
with
all
the
money
that
these
oil
companies
had,
a
lot
of
them
are
now
running
into the
problem,
as
you've
heard
this
week
from
the
bps
and
the
Shells
and
the
Exxons.
All of
a
sudden,
a
lot
of
their
barrels
are
now
going
to
be
off
the
market.
And
I
think
with
the
political
issues
going
on,
energy
security
is
taking
– going to
take
a
[indiscernible]
(00:03:58), just
like
defense
spending
is
going to
increase.
I
think
you're
going to
have
to
see
a
large
ramp-up
in
E&P
spending
as
people
look
to
replace
lost
barrels
and
also
want
more
security
in
their
energy
supply.
For
us,
the
third
point,
our
order
book
has
accelerated
dramatically.
Every
business
unit
in
the
company
has
seen
an
uptick
in
business
–
orders
and
inquiries
since,
I
would
say,
the
end
– since
Christmas
or
middle
of
December.
And
so – and
a
lot of
our
businesses
where
we
instructed,
you
know,
we
went
to
our
clients,
hey,
you
need
to
be
placing
orders,
you
need
to
do
this.
The
budget
constraints
that
most
of
our
clients
were
under
really
hindered
them
being
proactive
in
getting
a
jump
on
activity
for
2022
and
beyond,
but
we
have
seen
that
change
dramatically
in
the
last
couple
weeks.
It's
again
starting
in
late
last
year,
and
I
am
extremely
optimistic
that
we
are
in
the
early
stages
of
a
boom
and
this
company
through
all
the
changes
that
we've
done,
the
restructuring
that
we've
done
in
the
past
two
years
is
in
a
very
excellent
position
to
benefit
from
these
changes
for
the
years
forward.
So,
with
that,
I'm
going to
pass
it
on
to
Bruce
to
go
through
the
finances,
and
then,
I'll
come
back
for
more
narrative
and
questions.
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Thanks,
Jim.
If
I
can
take
everyone
to
the
slide
2,
and
this
slide
captures
the
main
financial
highlights
for
the
year.
First
point
is
that
we
ended
the
year
with
$114.2
million
of
cash
and
bank,
again
reflecting
a
strong
balance
sheet and
strong
cash
focus
during
the
year.
We
secured
after
months
of
work
the
asset based
lending
facility,
which
will
allow
us
liquidity
of
another $150
million.
Our
balance
sheet
remains
strong,
finished
with
$871
million
of
assets.
Our
EBITDA
for
the
year
finished
at
$3.1
million
for
the
full
year.
That
was
split
between
a
$3.6
million
loss
for
the
first
half.
As
Jim
mentioned,
momentum
picked
up
for
the
second
half and
we
had
an
EBITDA profit
of
$6.7
million.
Revenue
was
$521
million
against
$626
million.
As
Jim
mentioned,
2020
benefited
from
a
strong
quarter
one.
2021
had
the
full
year
impact
of
COVID.
And
a
final
dividend
of
$0.04
per
share
declared
given
our
$0.08
for
full
2021.
If
we
go
to
slide
3,
that's
our
group
income
statement.
We're
showing
a
revenue
at
$521 million,
which
is
$104
million
lower
than
we
saw
in
2020.
Again,
that's
a
slower than
anticipated
growth,
continuing
disruption
through
COVID,
and
a
lot
of
capital
discipline
throughout
the
year
from
a
customer
base
as
well.
Gross
profit
finished
at
$100.6
million,
with
a
19%
margin
against
the
20%
we
saw
in
2020.
Some
pricing
pressures
continued
throughout
the
year.
EBITDA,
as
I
mentioned
earlier,
was
a
$3.1
million
versus
the
€26.1
million
in
2020.
Majority
of
that
€26 million
in 2020
was
generated
in
the
first
quarter.
That
saw
a
widening
of
the
loss
from
operations
in
2021
to
$35.1
million.
We
had a
loss
before
tax
of
$40.6 million, a
small
tax
charge
gives
us
a
loss
after
tax
of
$45.5
million.
And
I
mentioned
the
final
dividend
per share
of
$0.04
to
give
us
a
total
dividend
of
$0.08.
If
we
move
to
slide
4,
we've
got
a
breakdown
of
our
sales
by
our
main
segments.
We
see
Titan
reporting
an
increase
of
17%
year-on-year.
Again,
that
shows
the
stronger
completion
activity
in
the
US
on
the
– and
also
Canada.
We
also
saw international
sales
up
23%
throughout
the
year
as
well.
So
that's
– that
gave
us
a
17%
uplift
on
the
revenue.
Small
operational
loss
of
$0.9
million,
also
we
didn't
make
up
operational
profit
for
quarter
four.
And
North
America,
we
were
down
18%
with
operating loss
of
$16.1 million.
Again,
results
were
impacted
by
the
continuing
effect
of
COVID.
We've
also
got
the
capital
discipline
from
our
customers
kicking
in
there
as
well,
meaning
less
purchases
and
decline
in
main
offshore
basins
like
the
Gulf
of
Mexico,
which
we
support
through
North
America.
EMEA
reported
sales
of
$58.1
million,
again
26%
down
on
2020.
Capital
discipline
kicking
in
there,
less
drilling
for
the
North
Sea,
so
that
impacted
our
numbers
there.
A
tough
year
for
AsiaPac,
we
saw
the
biggest
drop
there
from
$109
million
in
2020 to
$48.1 million.
Again,
some
of
our
key
markets
like
the
Middle
East
that
was
down
22%
in
terms
of
rig
count.
Again,
the
Chinese pipe was
less
compared
to
last
year
as
the
government
removed
some
export
rebates
as
well.
So
that
was
56%
down
on
our
previous
revenues.
If
we
move
on
to
slide
5,
what we've
done here
is
breakdown
the
H1
and
H2
numbers
just
to
give
a
little
bit
of
more
analysis.
We
see
the $521
million
split
from
H1
and
H2.
So
we
see
the
first
half
of the
year
was
$244
million
and
that
increased
14%
to
$277
million. So
if
you
look
at
the
Titan
sales
on
that
were
up
from
$88
million
in
H1,
up to
$100.6
million.
A
larger
increase,
if
you
look at
H2 2020,
when
we were
down
at
$59.2
million,
so
we're
70%
higher
in
H2 2021
compared
to
H2 2020.
If
you
look
at
the
results
from
operations,
we
had a
loss
of
$23
million
in
H1
and
that
decreased
to
$12
million
in
H2,
again
showing
an
improvement
through
H2.
Moving
on
to
slide
6,
we
break
down
our
sales
by
our
key
product
groups.
Not
surprisingly,
the
Perforating
Systems
–
our
Titan
business
was
the
largest
product
line
for
the
year,
and
we
saw
an
18%
improvement
on
sales
on
2020. OCTG,
as
a
product
line,
was
the
hardest
hit,
35%
down.
Majority
of that
came
through
our
APAC
division
and
the
remainder
split
evenly
over
EMEA
and
North
America.
Advanced
Manufacturing
was
20%
down.
Again,
that
was
impacted
by
the
reduction
in capital
spend
for some of our main
customers.
Subsea,
the
client
was
a
little bit
more
modest.
Good
gains
in
our
RTI
acquisition,
but
there was
some
decline
in
the
Stafford
and ENPRO
business.
Intervention
Tools,
which
is
dependent
on
CapEx
from
customer
base
was
affected
by
the
capital
discipline
and
that was
down
at
$25.8
million.
So,
that
gave
us
our
$521.6
million.
Out
of
that,
oil
and
gas
was $484
million,
with
non-oil
and
gas
$37.6
million, which
is
[ph]
7% (00:10:40),
which
is
similar
to
previous
years.
Moving
on
to
slide
7.
It's
a
breakdown
of
our amortization and
exceptional
items.
We
had
our $7
million
from
amortization
of
acquired
intangible
assets
which
relates
them
[ph]
in
Titan
like (00:10:54)
acquisitions. In
terms
of
impairment,
our
largest
item
is
$25.9
million
relating
to
our
inventory. This
is
our
– normally
[indiscernible]
(00:11:04)
levels
of
trading,
reduced our
return
rates,
and
increased
the
aging
of
inventory.
$5.2
million
of
that
relates
to
the
North
Sea
restructuring.
There
was
$10
million
for
our PC
equipment
in
the
States
as
well. But
a
lot
of
this equipment
is
still
good
equipment. It's
not
obsolete.
And we
believe
we'll
get
value
for
that
going
forward
as
well.
The
$8.6
million
of
the property
that
relates
to
our Fordoun property
up
in
Aberdeen,
and that
was
a
result
of
the
write-down
after
the
North
Sea
restructuring.
And
remainder,
of
course,
their
restructuring
cost, which
is
some
redundancy
cost
in
US,
and
AsiaPac.
And
that
all
came
to
the
$44.9
million.
Moving
on to
slide
8,
a
breakdown
of our
balance
sheets.
We
see
our
PPE
coming
down
from
$307 million
to
$274
million.
That
reflects
low
CapEx.
We
only
got
$6.5
million
of
CapEx
during
the
year.
We've
got
$29
million
[indiscernible]
(00:11:57).
And
we've
got
that
$8.6
million
impairment
on
the Fordoun
property.
We've
got
the IFRS
16 $24.7
million
asset
there.
Goodwill,
quite
constant.
We
hold
our
Rival
and
Cumberland
investments in
the
$19.4
million.
Working
capital
showed
a
good
reduction
from
$358
million
to $278
million.
Majority
of that
is
through
our
inventory
reductions.
We've
got
our
$114
million
of
bank and
cash.
And
that
gives
us
our
net
assets
of
$871
million in
total
versus
$976 million
in
2020.
A
further
breakdown
of our
working
capital
showing
our
gross
inventories
coming
down
from
$325
million
to
$263
million.
That
was
good
progress
there.
It
does
reflect
$31.5
million
that
came
– reduction
due
to
the
North
Sea
restructuring.
After
provision
for
inventories,
we
see
that
–
which
includes
$25.9
million.
That
gives
our
net
inventory
position
of
the
end
year
of
$204
million.
We
see our
receivables
perk
up
a
little
bit
as
the
trading
improves,
and
payables
reflecting
some
more
purchases
coming
through
as
well.
In
terms
of
the
ratios,
we're
favorable
with
our
reduced
inventory
figure,
down
to 163
days,
and
receivable
days
going
the
right
way
down
to
87.
Just
take
you
through
the
group
cash
flow.
For
the
year,
we
had
a
free
cash
flow
of
$54
million.
There's
two
main
components
to
that.
One
was
the
proceeds
from
the
North
Sea
restructuring
and
a
small
assets
held
for
sale,
$4.4
million,
that
gives
a
$34.9
million.
And
then
we've got
the
working
capital
improvements
as
well,
gave
us
$54.4
million
free
cash
flow,
which
helped.
We
then
had
some
spend –
limited
spend
on
capital
intangible
assets
and
some
investments
in
businesses
in
terms
of
Well
Data
and
Cumberland.
The
dividends
of
$12.8
million,
some
treasury
shares
for
future
share
awards
and
that
gave
us
[indiscernible]
(00:13:53)
$12.5
million in our
cash and
bank.
Next
slide,
slide
11.
Looks
at
that
minimal
CapEx
amount.
Nothing
much
really
on
here
other
than
just
some
maintenance
spend
and
some
equipment
upgrades
for
Ameriport
and Trenchless
for
$6.6
million in total, along with
intangible
assets
of
$2.7
million,
gives
us
$9.3
million.
Our
slide on
12,
just
a
little bit
more
information
on
our
order
book,
as
Jim
mentioned,
has
increased
over
the
period.
Just
to –
the
graphic
at
the
bottom
show
the
order
books
have
increased
41%
since
31st
of December
2020.
Majority
of
that
is
in
North
America.
Subsea
Spring,
which
is
our
RTI
acquisition,
has
$31.8
million
of
orders.
A
lot
of
that
is
for
our stress
joints
for
the
Gulf
of
Mexico
and
South
America.
We've
seen
improvement,
which
is
not
reflected
on
these
numbers,
but
now
AsiaPac
has won
$26
million
of
orders
from
China.
All
businesses
across
the
board
are
reporting
an
increase
in
inquiries,
RFQs
and
orders.
Our
book-to-bill
ratio
in
quarter
four
was
1.45.
The
last
slide
is
just
I
mentioned
at
the
start
our
asset-based
lending
facility,
which
we
completed
in
February.
This
is
a
$150
million
ABL. We
have
two
banks
participating,
HSBC
and
Wells
Fargo.
It
has an
additional
accordion
feature
of $50
million,
which
is
subject
to the
lending
group's
consent.
It
is
a
flexible
funding
arrangement,
which
is
on
the
back
of
our
balance
sheet.
And
it
reduces
our
sensitivity
to
the
earnings-based
covenants.
It
makes
sense
in
that
the
balance
sheet
values
are
more
stable
than
EBITDA
given
our
volatile
sector.
And
then,
the
classes
of
assets
we
look
to
borrow
against
are
receivables,
inventories
and
our
freehold
properties.
So
we've
got an
open
availability of
$100 million,
the freehold
properties
will
be
coming
on
by
the
end
of
the
month,
and
that will
give
us
roundabout
[indiscernible]
(00:15:50).
Okay.
And
that's
me,
finished
my
slides.
Back
to
Jim.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Okay. Thanks, Bruce.
On
slide
number
14,
just
some
bullet
points
there
on
our
thoughts
on
the
E&P
CapEx
optimism
that
we
feel
out
there
right
now.
And
again,
we
put
this
slide
together
before
the
events
of
the
last
seven
days.
So,
really,
at
the
end
of
the
day,
this
is
following
a
cycle
that
is
not
new
that
we
have
seen
many
times
over
the
last
30
years.
The
price
of
oil
and
gas
is
the
fuel that's
going
to
drive
activity.
And
right
now,
that
fuel
price
is
in
overdrive.
And
so,
we
think
that
animal
instincts
will
once
again
kick
in.
Depletion
does
not
go
away. The
lack
of
investment
since
2014
is
showing
up
on
the
reserve
base
of
a
lot
of
operators
around
the
world.
And
at the
end
of
the
day,
you
got
to put
the
drill
bit
to
work.
The
ESG
pressures,
while
they've
been
very
pronounced
in the
last
couple
years,
they
will
still
be
there
on
the
E
side
that
I
believe
that
the
energy
security
issue
and
the
outrage
from
consumers
over
high
– the
high
effects
of
natural
gas
prices
and
gasoline
prices
are
going
to have
an
effect
to
get
people
back
to
work.
Keep
in
mind
also
for
the
last
two
years,
even
if
you
weren't
a
company
like
Hunting,
the
service
companies
at
the
rig
site,
the
drilling
contractors,
I
know
from
numerous
conversations
I
had
with
our
team
in
Southeast
Asia,
COVID
restrained
a
lot
of
potential
activity.
I
mean,
especially
Malaysia
was
hard
hit.
There
were
a
lot
of
things
there
that
did
not
happen
because
of
COVID.
So,
we're –
again,
we're
just
very,
very
optimistic
that
this
thing
is
going
to
take
off.
And
I've
never –
I
don't
feel
I've
ever
sat
in
a
position
like
I
am
today
as
far
as
seeing
what
I
think
is
just
a
stellar
outlook
going
forward.
On
slide
15 and
we're
going
to take
a
few
minutes
and
talk
regionally
wise.
Slide
15
is
really
focused
on
the
DUC
count
and
the
rig
activity
in
the
US.
We
have
seen
the
rig
count
accelerate
back.
Still,
in
my
many
years
in
business,
this
would
be
a
very
poor
rig
count
in
total.
But
rigs
today
are
more
efficient. And
we've
been
hearing
of
spud
to
completion,
spud
to
the
end
of
drilling
times,
averaging
something
like
17
days
in
parts
of the
Permian.
So,
because
of
the
technology,
the
oilfield
service
industry
has
put
in
place,
the
drilling
in
that
is
much
more
efficient.
So,
600
rigs
today
is
probably
the
same
as
700
rigs
five
years
ago.
So,
that's
an
efficiency
factor
to
keep
in
place.
The
DUC
level
is
continuing
to
decline.
You
can
see
the
graph
showing
the
December
2021
number.
And
in
reality,
I
think
half
of
those
don't
even
exist,
because
as
I've
stated
in
the
past,
some
of
these
were
bad
wells,
wells
drilled
to
hold
acreage,
companies
went
bankrupt,
whatever
the
situation
is.
The
bottom
line
to
it
is
that
you
got
to keep
drilling
to
stay
in
business.
And
so,
as
the
easy
money
was
made,
keep
in
mind,
entering
the
downturn,
these
wells
were
already
drilled
just
sitting
there,
so
half
the
cost
was
already
done.
Now,
with
that
being
– when
those
being
completed
away,
again,
it's
a
fundamental
that's
going to
make
the
future
look,
I
think, very,
very
bright
for
us.
One
of
the
areas
that
I
don't
have
a
slide
on
though
is
in
the
Gulf
of
Mexico.
It
has
been
a
laggard
in
its
response
back
activity
wise.
A
week
ago,
the
rig
count
was
down
to
a
historic
low
of 12.
But
I
have
been
encouraged
by
the
recent
dialogue
that
I've
seen
from
Transocean
and some
of
the
other
drillers
on
new
contracts
being
picked
up
in
the
Gulf
of
Mexico
and
in
the
international
market.
And
keep
in
mind,
this
is
a
long
cycle
business.
So,
you can't
just pick
up
a
rig
and start
putting
a hole
in
the ground
in
a
month. So,
the
trend is
going positive
in
the
offshore marketplace.
You've
seen
Transocean announce
day
rate increases.
So,
even
though
the
number
today
is
not
healthy,
I
think
that
it'll
be
a
significant improvement
by year-end.
Slide
number
16, we
kind
of
go
around
the
world.
I'm
not going
to go
through and
read all
of
these. Canada
was
a
very nice
surprise for
us
last year.
Our Canadian
business from
Titan
increased
24%
year-over-year
and
the
new
business
model,
our
team
in
Canada
has
managed,
where
we
got
out
of
the OCTG
distribution
business
and
into
using
the
distributor
model,
turned
that
from
losses
to
profits
in
the
year.
And
so,
we're
happy
that –
on
how
that
has
turned
out.
And,
again,
good
returns
with
limited
capital
employed.
In
the
North
Sea,
Bruce
kind
of
touched
on,
a
big
issue
for
us
there
was
the
disposal
of
our
UK
OCTG
business,
and
I'll
talk
more
about
that
later.
But,
the
company,
I
think
we're
well positioned
in
that
marketplace
going
forward
with
some
additional
optionality
that we
didn't
have
prior
to
that
disposal.
AsiaPac,
the
team
there
struggled
last
year.
That
was
the
last
of
the
regions,
one
of the
last
regions
to
see
the
downturn
affect
them.
So,
they've
been
later
in
seeing
the
recovery.
The
good
news
is
that
they've
started
the
year
off
with
a
bang.
I
think
that
we'll
have
a
very
good
year
in
AsiaPac.
Middle
East,
they
always
say
that the
last
barrel
of
oil
ever
produced
is
going to
come
out
of
Saudi
Arabia.
So,
capital
spend
has
been
restrained
there.
The
rig
count
in
the
Middle
East
is
still
significantly
below
where
it
was
pre-COVID.
But,
again,
depletion
doesn't
sleep
and
they'll
have
to
pick
up
the
drilling
again.
Offshore
South
America
has
been
an
area
that
I
have
really
been
pleased
with
for
Hunting.
And
I
think
probably
our
business
in
2022
in
offshore
Brazil
and
in
the
Guyana,
Suriname
region
will
be
the
biggest
ever
in
the
company's
history.
Based
on
this
success,
the
titanium
stress
joint
business
has
had,
in
those
two
markets,
as
well
as
the
general
recovery
in
Subsea.
So,
a
great
job
for
our
team
there.
And
then
Africa;
Africa
is
still
tough.
There's
talks
of
things
changing
there
as
far
as
government
fiscal
policies
and
the
like.
I
think
everybody
probably
saw
Shell
announced
a
big
find
off
Namibia
here
earlier
this
week.
So,
to
me,
that's
an
evolving
story,
but
at
the
end
of
the day,
it's
still
– you
still
deal
with
the
difficulties
of
Africa.
On
slide
17,
just
some
points
on
Titan.
Jason
Mai and
his
team,
I
think,
did
a
very,
very
good
job
in
the
year
in
a
very,
very
challenging
marketplace.
They
continued
to
improve
year-on-year,
focusing
on
technology,
focusing
on
new
products
coming
into
line,
a
list
of
those
are
all
there.
For
us,
again,
we
saw
our
business
improve
9%
quarter-on-quarter
at
the
end
of
2021.
We
were
the
first
ones
to
come out
and
announce
price
increases
in
late-Q3
of
2021.
We've
announced
another
round
of
price
increases
in
the
neighborhood
of
7%
in
February
for
these
product
lines.
And
our
job
is
to
try
to
make
sure
we
stay
ahead
of
the
inflation
in
the
industry,
which
we
will
do,
and
continue
to
enjoy
our
number
one
market
position
place
in
this
segment.
Systems
sales
continued
to
increase.
And
right
now,
about
20%
of
our
total
revenue
dollars
in
Titan
are
now
factory
loaded
guns
going
out
to
the
field.
We're
still
selling
components,
we
sell
systems,
we
sell
guns.
One
of
the
changes
that
we
have
done
is
we
have
on
purpose
left
some
of
the
commodity
and
gun
business
because
I'm
just
not going
to
play
in
the
dirt
at
those
low
levels
of
pricing
in
today's
marketplace.
So,
again,
a
good
year
overall
relative
to
the
rest
of
the
market,
not
what
we
had
seen
in
the
past,
but
we
did
see
good
growth
in
a
number
of
geographic
areas.
And
like
Bruce
had
said
earlier,
we
were
very
pleased
with
the
uptick
in
our
international
sales
year-over-year.
Slide
number 18,
I'm
not
going
to
spend
a
lot
of
time
on
this,
but
it
just
shows
that
the
team
at
Titan
has
not
been
standing
still.
A
lot
of
development
and time
going
into
developing
our
Charge
technology,
even
more
responding
to
the
needs
of
our
client,
working
on
areas
within
our
existing
product
lines
to
reduce
the
cost
bases,
because
I
really
believe
our
performance
levels
are
second
to
none
out
there
as
far
as
safety
and
dependability
go.
So,
right
now,
it's
looking
at
the
product
and
just
making
sure
that
we
can
maximize
our
ability
to
play
in
the
business.
Slide
number
19,
I'm
going
into
North
America.
A
tough
year
overall,
again,
the
COVID
downturn
hit
literally
every
business
and
had
effects.
2021's
passed.
We're
on
to
2022.
There's
encouraging
upside
in
everything
in
the
– every
business
unit
in
the
US
for
2022.
Our
AMG
business
is
seeing
backlogs
expand
aggressively.
The
Subsea
business,
I
talked
about
doing
very,
very
well.
Premium
Connections,
our
US
Manufacturing
business,
all of
them
seeing
an
uptick
in
activity,
and
we
believe
it'll
go
back
to
delivering
very
good
results
this
year.
Slide
number
20,
the
EMEA
update.
Tough
year
last
year,
the
restructuring
in
place,
Bruce
and
I
lost a
lot
of
– had a
lot
of
sleepless
nights,
and
there
was
just
a
very
long
drawn
out
process
to
get
this
done,
but
it
was
one
of
our
strategic
goals
to
exit
a
business
that;
A,
we
didn't
– we
really
didn't
sell
our
own
products
through
this.
So,
strategically,
it
was
questionable.
The
market
has
changed.
And
again,
the
amount
of
capital
tied
up
was
just
– it's
just
too
much
for
that
size
of
a
marketplace.
So,
going
forward,
we're
a
much
leaner
operation.
I
mean,
even
looking
at
February's
results,
which
were
just
starting
to
come
in
off,
I
mean,
we
have
positive
results
in
EMEA
driven
by
a
change
of
profitability
in
Aberdeen.
So,
I'm
excited.
I'm
thankful
for
what
the
team
did.
We
were
able
to
reduce
some
SG&A
costs
with
this
transaction.
So
for
those
Hunting
employees
that
were
part
of
the
transaction,
I
do
want
to say,
a
special
thanks
for
all
that you
did
and
we
wish
Marubeni-Itochu
all
the
best
in
the
future,
because
we'll
be
working
a
lot
with
those
guys.
But
the
opportunities
going
forward,
I
think
we
have
more
optionality
with
our
business
now,
because
we're
not
competing
in
that
certain
segment
of
the
pipe
business.
And
yet,
we
are
continuing
to
look
at
things
like
the
enhanced
oil
recovery,
improvements
in
wells,
and
intervention
and
the
like
to
enhance
our
profitability
in
that
region.
AsiaPac,
tough
year
for
the
guys
in
Singapore.
It
was
even
compounded
more
by
some
of
the
fiscal
terms
in
China
affecting
OCTG.
But
the
bulk –
the
thing
I
got
to highlight
is
the
bulk
of
the
dollars
going
into
AsiaPac
are
actually
OCTG sales,
and
a
lot
of
it
was
to
the
Middle
East.
And
as
I
said
earlier,
with
the
Middle
East
rig
count
down
33%
there,
we
just
had
not
seen
that
recovery
in
demand.
Going
forward
into
2022,
we
are
very
fortunate
to
have
the
relationship
with
Jindal,
which
we'll
talk
about
some
more
going
– in
the
next
couple
of slides.
That
has
already
paid
dividends
to
us
with
orders
with
ONGC
and
other
players
in
the
Indian
market.
So,
we're
very
thankful
for
that
and
Daniel
Tan
and
his
team
did –
have
done
a
great
job
on
pushing
that
across
the
line
for
us
for
the
joint
venture.
But
Chinese
fiscal
terms
regarding
taxes and
the
like
have
improved
in
China.
But
one
important
other
note
that
nobody's
talked
about
yet
is,
with
the
situation
in
the
Ukraine
and
Russia.
There's
all of
a
sudden
going
to
be
a
gap
of
many,
many
thousands
of
tons
of
Russian
pipe
that
will
not
be
in
the
international
marketplace.
So,
we
see
people
like
the
TMKs and
the
like
as
competitors
in
the
Middle
East,
in
Southeast
Asia.
I'm
pretty
sure
those
tons
are
going
away
now
with
all
the
sanctions
in
place.
So,
that
has
to
be
a
positive
for
OCTG
opportunities
going
forward
in
2022,
even
though
it's
driven
by
a
sad
state
of
affairs.
Slide
number
22
talks
about
our
strategic
accomplishments.
Bruce
has
talked
some
about
the
ABL.
We've
talked
about
the
Aberdeen
selling
of
the
OCTG.
We
still
look
internally
for
ways
to
save
money,
reduce
our
costs.
We've
done
some
things
on
consolidating
some
business
units.
You'll
see
a
slide
later where
we'll
talk
about
Singapore.
So,
we're
not
resting
on
our
laurels
as
far
as
where
we're
at
today,
and
we
continue
to
put
our
lean
manufacturing
initiatives
in
place
and
the
like
to
drive
our
cost
base
down.
Our
middle
slide
investment
in
non-oil
and
gas,
we
looked
at
our
current
portfolio,
we
like
what
we
have,
but
we
want to
enhance
it.
We
want
to
find
out
how
to
grow
better
in
new
areas
and
pick
up
new
technologies.
Two
investments;
one
Well
Data
Labs,
Denver-based
company,
focusing
on
analytics
and
machine
learning.
We
have
been
collaborating
with
them
along
the
lines
or
with
the
Titan,
our
Titan
business
unit,
to
look
for
ways
to
provide
better
analytics
and
machine
learning
data
for
our
customers
and
to
sell
our
products
better
in
the
perforating
side
of
the
business.
And
so,
we're
pleased
with
that
relationship
and
it
continues
to
go
forward
and
we
continue
to learn
more.
On
Cumberland,
when
we
looked
at
our
Advanced
Manufacturing
business,
it
was
an
area
where
we
can
see
the
trend,
especially
in
non-oil
and
gas
areas
like
aerospace
and
defense
where
3D
printing
is
becoming
more
and more
prevalent
and
more
and
more
the
way
to
have
things
done.
Organically,
it
would
be
extremely
difficult
and
costly
for
us
to
do
that.
We
came
across
– made
a
relationship,
came
across
some
people.
And
so,
we're
very
pleased
with
that
investment.
And
we've
already
been
funneling
opportunities
to
the
Cumberland
people
and
kind
of
using
them
as
our
3D
printing
option
when
we
look
at
supplying
products.
Expanding
markets
in
the
next
slide.
The
Jindal
relationship,
again,
I'll
talk
some
more
about
a
great
accomplishment
for
the
team
this
year
to
get
done.
The
Nammo
defense
system
delayed
– time
delayed
fuse
deal. Jason
Mai
put
that
together.
Great
job.
It
is
primarily
focused
on
the
TCP
market
which
is
more
offshore,
but
it's
also
going to
open
up
some
doors
for
us
for
military
applications
and
aerospace
that
we
are
working
with
right
now.
The
organic
oil
recovery
finally
making
steps
with
positive
purchase
orders.
Nobody
probably
knows
that
business
better
than
Bruce,
so
I'll
let
him
take
the
questions
on
that.
But
good
results
there.
And
again,
it's
one
of
those
ESG
stories
where
companies
can
do
more
with
less.
And
so,
we're
happy
to
see
that
continue
to
be
nurtured.
And
then
lastly,
the
Eden
Geothermal
project
in
the
UK.
That
just
highlights
to
me
a
fact
that
for
30
years,
Hunting
has
been
involved
in
the
geothermal
market,
whether
it's
been
the
Eden
project,
whether
it's
been
in
the
Philippines,
Indonesia,
Southern
California,
so
we
have
a
good
history
of
that.
Today,
it's
a
small
market.
So,
we're
hoping
that
that
does
expand.
Slide
23,
just
some
more
bullet
points
on
the
Jindal
relationship
and
the
joint
venture
that
we
have
going
on
there.
We're
hoping
this
is
up
and
running
and
threading
pipe
by
the
end
of
the
year.
And
again,
with
the
supply
issues
in
AsiaPac,
with
what
we
see
as
a
potential
for
accelerated
drilling
in
India
and
in
the
Middle
East,
we
think
this
is
a
great
relationship
going
– going to
be
a
great
relationship
for
the
company
going
forward.
And
we're
very,
very
thankful
to
the
Jindal
people
for
working
with
us
to
put
this
together.
So,
I
think
it'll
be
very
good.
On
the
lines
of
pipe
and
OCTG,
on
slide
24,
just
wanted
to give
you
a
shot
there
showing
the
continued
growth
in
our
TEC-LOCK
product
line.
It
continues
to
expand.
Connection
business
continues
to
do
well.
We
continue
to
work
with
a
group
of
independent
mills
that
supply
us
access into
the
marketplace.
But
again,
all
this
is
through
distribution.
So,
Hunting
is
not
owning
the
pipe
on
this.
We're
selling
the
Connection
Technology.
We're
threading
the
product
at
our
own
facilities
in
Houston
or Marrero, Louisiana
or
through
licenses
in
the
Gulf
Coast
or
through
licensees
in
Canada.
But
just
kind
of
a
snapshot
there.
Next,
slide
25,
big
home
run
for
our
Subsea
business
this
year.
The
–
I
mean,
I'm
just
thrilled
with
how
this
has
progressed
considering
what
we
paid
for
this
business
in
September
of
2019.
As
the
line
shows,
we've
booked
$68
million
worth
of
business
in
two
years.
I
think
this
will
continue
to
accelerate.
The
business
we
picked
up
at
the
end
of
the
year
with
Exxon
in
Guyana
is
the
largest
order
that
I
think
has
ever
been
secured
for
the
titanium
stress
joints
with
the
company.
It
exceeds
$20
million
and
again,
because
of
that
technology,
because
of
some
cost
savings
measures,
clients
are
seeing
by
utilizing
this
over
some
other
solutions,
I
think
there's
big,
big
upside
into
this.
ENPRO
had
a
tough
year.
A
lot
of
it's
stagnant
because
of
the
COVID-affected
downturn,
but
the
inquiry
levels
are
up
and
we're
expecting
a
good
year
for
ENPRO
this
year,
as
well
as
our
historic
business
at
Stafford
on
the
coupling
side,
which
is
directly
related
to
Subsea
Tree awards.
We
continue
to
be
the
market
leader
in
supplying
those
products
and
we
just
need
the
activity
to
pick
up,
which
it
will.
Slides
number
26
and
27,
I've
already
kind
of
talked
about,
but
just
some
bullet
points
there
for
everybody
on
Cumberland
and
on
Well
Data
Labs.
Slide
number
28
talks
about
one
of
our
cost
savings
initiatives.
It's
a
consolidation
move
we're
making
in
Singapore
right
now,
consolidating
three
– basically
three
into
one,
reducing
our
footprint,
getting
more
efficient.
And
it
shows
you
that
when
real
estate
issues
allow
us
and
we
can
make
these
moves,
we're
constantly
looking
at
ways
to
improve
our
performance
and
this
is
one
that
we're
doing.
Slide
number
29,
our
ESG
slide.
A
lot
of
points
on
there.
I'm
not going
to
go
through
them
all.
We
continue
to
strive
to
be
in
the
– a
high
performer
in
all
of
those
areas
and
to
do
the
best.
It's
nothing
that
we
haven't
done
in
the
past.
For
the
year,
in
2021,
just
to
kind
of
bring
it
all
together,
we
had
record
HS&E
performance,
great
quality
performance.
So,
Greg
Farmer
and
his
team
did
a
super
job.
It
continues
to
be
part
of
the
culture
at
Hunting,
and
I
just
want to
say
my
thanks
to
the
– all
of
the
Hunting
team
for
their
efforts
in
that
area
as
well
as
for
all
the
contributions
made
in
a
very
difficult
marketplace
in
2021.
Lastly,
on
page
30,
our
summary
of
our
investment
case.
And
honestly,
it's
kind
of
like
when
I
look
at
our
oil
company
clients
and
say,
well,
if
you
don't
drill
now,
when?
When
I
look
at
our
share
price
and
our
value
in
the
marketplace
today
and
talk
to
investors
like,
if
you
don't
buy
now,
then
when
will
you?
Because
honestly,
we've
got
a
great
runway
ahead
of
us, we
have
great
product
line
that
has
been
streamlined
and
made
more
efficient,
new
product
technologies
which
are
taking
off
for
us.
And
I
just
believe,
again,
we're
in
the
early
stages
of
a
boom
that's
going to
be
multiyear.
So,
with
that,
I
think
I'm
done.
And
I
will
now
open
it
up
to
questions.
Anybody
has
any?
U
Thank
you,
Jim
and
Bruce.
We're
going to
take
questions
from
the
room
first.
Ask
– anyone
asking
the
question
to
state
their
name
and
company
into
the
microphone
for
the
benefit
of
those
on
the
webcast.
Thank
you.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
Hi.
It's
Mick
Pickup
here
from
Barclays.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Hey,
Mick.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
Can
you
just
talk
about
the
Titan
business?
Obviously,
you've
seen
the
frac
count,
frac count recover.
And
if
I
look
at
the number
of completions,
it's
back
up
at
900 a
month.
And
I
think
we
peaked
about
1,300. So,
it's
come
back
a
long
way. But
your
revenues
in
that
business
aren't
what
they
used
to
be, if
I
look
on
a
like-for-like
basis. So,
you
started
talking
about
pricing
at
7%
now,
but
you're
used
to
20%
margins
in
that
business.
So,
when
the
conditions
come,
you
can
get
back
to
20%
margin, because
it
looks
like
prices
got
a
long
way
to
go?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Well,
I
can
tell
you
for
the
year,
the
margins
were
not.
But
I
can
tell
you,
in
Q4,
margins
were
over
23%.
So,
they
are
trending
in
the
right
way
and
should
continue
to
go
positive.
On
the
revenue
dollars
themselves,
the
market
is
not
what
it
was
two
years
ago
as
far
as
the
quantity
of
completions
out
there.
We
also –
as
I
had
mentioned,
we
are
passing
on
some
of
the
commodity
into
the
business,
Mick,
because
it's just
– you're
just
burning
up
and
using
steel
for
no
purpose.
So,
we
want
to
focus
more
on
the
technology
side.
Pricing
is
not
– obviously
not
where
we
want
it
and
not
where
it
was
in
2018,
and
that
will
be
an
evolution
of
suppliers
getting
back
to
that
level.
But
in
certain
segments
of
the
business,
like
on
the
Charge
side,
one
of
our
competitors
has
been
out
there
leading
the
low
end
of
the
pricing.
I'm
not
going
to
say
who.
On
the
systems
side,
I
think
we're
pretty
consistent
with
our
– the
number
– us
and
the
number
two
supplier.
Others
out
there,
it's
kind
of –
still
kind
of
a –
there's
still
kind
of
too
much
inconsistency
out
there
in
the
marketplace.
So,
what
we
all
need
is
demand.
What
we
all
need
to
do
is
realize
replacement
costs
are
going
to
be
needed
to
go
forward,
because
steel
has
risen.
Powder
prices
have
risen.
But
it's
not
a
–
I
can't
give
you
a quick
answer
and
say
June
13
pricing
will
be
up
$50
a gun.
But
I
think
the
steps
are
that
it's
going
in
the
right
direction.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
Okay.
And
then,
secondly,
you
say
your
order
book
is
up
40-something-percent
year-on-year.
Obviously,
a
lot
of
your
business
has
quite
fast
turnover.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Correct.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
So,
what's
it
been
up
on
end of
3Q
into
4Q?
I'm
just
looking
about
run
rates
today
for
this
year
going
forward
and the
US
spend
is
going to
be your
best
by
30%
on
our
estimate.
So,
just
thinking
how
is
that
progressing
at
this
juncture.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Well,
I
mean,
Mick,
it's
all
going
positive.
I
mean,
the
key
point
with
the
number
we
gave
was
the
order
volume
is
accelerating
rapidly.
I
mean,
it's
– I
can't
give
you
that
number.
Bruce,
you
got anything
you
can
add
to
that?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Nothing. Certainly,
quarter
four
is
what
we're
seeing
coming
through
with
the
Subsea,
as
we
mentioned
there
as
well.
And
then,
post-year-end
as
well
with
the
orders we
mentioned,
these
are
packed
and
also
the
RTI
again
[ph]
we're seeing China (00:39:22)
starting
to
coming
through
as
well. The
[indiscernible]
(00:39:27)
in quarter
four,
most
definite, it's
an upward
trend that
we
saw
through
the
backend of
last
year, Mich.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
And
the
Titan
business
as
we've
always
said,
the
Titan
business
stays
the
same.
There's
still
no
visibility.
I
couldn't
tell
you
what
the
number's
going
to
be
in
April,
because
you
are
basically
month
to
month
and,
I
think
this
one
graph
even
shows
as
we
track
that,
you'll
see
the
number
for
Titan.
You're
never
going
to walk
in
and
say
I
have
a
$100 million
backlog
at
Titan.
So,
it's
really
the
AMG
business,
the
Subsea
business,
the
AsiaPac
Premium
Connection
business
with pipe. Those
are
the
areas
where
you
establish
a
backlog
and
it
takes
the
time
to
get
those
through
the
system.
E
Erwan Kerouredan
Analyst, RBC Capital Markets
Hi,
there.
Erwan
from
RBC.
So,
my
first
question
on
pricing
in
Titan
has
been
answered.
I
guess
I
have
two
other
questions.
First
on
potential
like
small
targeted
M&A.
I
remember
two
years
ago,
deepwater,
a
proprietary
acquisition
were
like
a
main
area
of
focus.
How
do you
think
about
it
now?
Has
it
changed?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
It
hasn't
changed,
unfortunately.
What
you
just
explained
was
RTI,
it's
been
a home
run for us.
So,
I
think
– so
we
proved
that.
But,
going
forward,
it's
one
of
those
cases
that
we're
continuing
to
look
at
acquisitions.
We've
got
the
firepower
to
do
it.
Our
focus
is
on
same
thing
hasn't
changed,
deepwater,
proprietary
technology,
completion
related
in
that
side
on
the
oilfield
services.
On
non-oil
and
gas,
more
on
the
high
technology
industrial
side,
perhaps
aerospace,
industrial
product
size.
The
issue is,
it's
no
different
than
us not
wanting
to
sell
our
shares
at
£2
a
piece.
Everybody
had
poor
earnings
to
try
to
do
multiples
on
in – from
2020 and
2021.
So
what
are
you
basing
this
on?
And
so,
some
companies
that
we
have
had
dialogue
with,
they'd
fit
the
bill
of
what
I'm
talking
about.
The
main
message
has
been
we got to
at
least
wait
till
the
end
of
this
year,
because
one,
we
need
to
prove
out,
pay
the
new
products
we've
brought
online
are
generating
earnings.
We
don't want to
sell
ourselves
short.
And
unless
it's
a
private
equity
firm
needing
to
exit,
there's
just
thin
pickings
whether
it's
oil
and
gas
or
non-oil
and
gas
right
now,
just
because
the
value
trying
to
relate
to
putting
a
value
to
EBITDA
earnings,
for
example,
E
Erwan Kerouredan
Analyst, RBC Capital Markets
Sounds
good.
Okay.
And
maybe
a
slight
follow-up
to
that,
but
getting
back
to
the
Russia
situation.
So,
for our
other
companies
under
coverage,
we
do
see
companies
diverting
their
crude
sourcing
away
from
Russia,
including
into
North
Sea,
North
Sea
oil.
So,
you
touched
on
this
a
little
bit,
but
can
you
clarify
that
you've
seen,
that
you
heard
more
interesting
conversations
over
the
past
couple
of weeks
in
terms
of
pick-up
outside
of
US
onshore
and
in
new
areas?
And
that's –
like
getting
back
to the
previous
question,
like
non-
oil
and
gas
is
a
potential
area
of
interest
in
terms
of
growth
and
does
this
situation
change
it?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
No.
I
mean,
our
– we
will
– we
are
an
oilfield
service
company.
We're
going to
always
be
an
oilfield
service
company.
On
the
diversification
front,
the
key
is
that
we
recognize
that
we've
had
– we
have
rainy
days,
the
sun
is
going to
shine,
right?
So,
the
sun's
coming
out
right
now in
our
industry.
But
there
will
be
another
rainy
day
at
some
time.
I
don't
know
when.
What
would
be
– an
advantage
would
be
to
have
the
skills
of
the
company
in
the
engineering,
in
our
technology,
be
able
to
brought
into
other
product
lines
that
can
get
a
more
steady
stream
of
earnings
long-term
across
the
board.
As
far
as
the
topic
of
the
Russian
impact
and
all,
we've –
again,
we
saw
a big
uptick
in
activity
literally
since
Christmas.
A
lot
of
it
was
clients
were
told
you
cannot
spend
money
in
2021
period.
And
we
had
many
cases
where
we
went
out
and
told
them,
you
need
to
get
orders
in
place
now.
You
needed
this.
We
can't.
And
then,
January
1
hit,
and
it's
like
we
have
a
new
budget,
we
can
now
spend
money.
So,
there's
still
been
a
lot
of
capital
discipline
in
the
industry,
but
that
– we're
just
seeing
all
the
right
signs
that
that
is
going
to
be
changing.
And
especially
when
you
look
in
the
US
at
the
amount
of
private
operators
that
are
out
there.
I
mean,
we're
doing
business
with
companies
I
never
heard
of
three
years
ago.
These
are
not
–
I'll
bet
you
guys
haven't
heard
the half
of them.
And
they're
small
operators
running
five
rigs
in
the
Haynesville
drilling
natural
gas,
or
three
rigs
in
the
Permian,
and
its
private
equity
money,
and
they're
not
worried
about
returning
cash
to
shareholders
today.
They're
worrying
about
– which
they
are.
I'm
getting
that
$90
a
barrel
and
off
we
go.
And
another
factor
I
think
that's
going
to
benefit
us
all
going
forward
is,
last
year,
much
of
the
production
produced
by
a
lot
of
the
big
companies, a
lot
of
the
big
independents,
they
had
hedges
way
under
what
the
$80,
$90
barrel
range
was
that
they
were
seeing
in
the
open
marketplace.
So,
these
guys
were
not
realizing
$80
or
$90
a
barrel
or
realizing
$4
or
$5
an
Mcf
gas
price.
Those
are
all
falling
off.
If
you
like
– if
you
thought
the
cash
flow
was
great
in
2021,
the
cash
flow
is
going to
be
extraordinary
in
2022
for
E&P
players
in
North
America.
E
Erwan Kerouredan
Analyst, RBC Capital Markets
Yeah.
Understood.
Thank
you.
T
Thomas Rands
Analyst, Investec Bank Plc
Thank
you.
Thank
you.
Thomas
Rands
from
Investec.
One
for
Bruce,
organic
oil
recovery,
your
specialty
subject.
Could
you
give
us
an
update
on
where
that
is
with
the
agreement
with
the
kind
of
the
IP
owner
and
how
you
see
the
kind
of
that
product
expanding
in
the
Middle
East,
but
also
what
the
opportunity
is
for Fairfield,
please?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Sure.
In
terms of
agreements,
so
we've
been
– we
worked
really
closely
with
owners
of IP
over
the
last
four
or
five
years.
So,
we
really
sort of
step
in
step
with
them.
We're
in
discussions
around,
let's
leave
it
there
just
in
terms
of
securing
a
longer-term
agreement
from
that
site.
The
Middle
East
has
been
really
exciting.
That's
been
a
target
area
for
us.
I
think
every
major
operator is
either
testing
the
product
or
commercial
status.
So,
it's
an
area
that
lends
itself
well
to
the
technology
itself,
in
terms
of
the
land
wells,
in
terms
of
the
geology
and
the
ease
of
getting
the
product
to
the
rig
site
as
well.
So,
we
have
secured
some
purchase
orders
out
there
for
some
of the
major
operators.
So
we're
really
looking
to
build
on
that
success
in the
Middle
East
and
just
really
rule
that
product
out
over
the
region.
We're
also
in
other
areas
such
as
Pakistan,
the
Far
East
as
well.
In
terms
of
the
North
Sea,
we
have
a
major
product
– major
project
coming
up
in
North
Sea
with
one
of
the
major
operators
there.
That
should
be
deployed
around
about anytime. So,
that'll
give
us
our
offshore
focus
as
well.
So,
our
land
projects
in
the Middle
East,
we'll
also
have
the
commercial
project
in
the
North
Sea
as
well. So,
that's
going
to
be
exciting
year
because
it
does
take
a
long
time
to
get
acceptance
on
new
technology.
The
test
results
have
been
very
good.
We're
now
getting
proven
out
with
these
major
guys
and
we're
seeing
the
benefits
of the
POs
coming
through
as
well.
So
really, 2022
is
about
just
building
on
that
success.
T
Thomas Rands
Analyst, Investec Bank Plc
All
right.
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Okay.
U
Hi.
It's
[indiscernible]
(00:46:51).
Just
a
quick
question
on
Russia.
I'm
sure
you
do
have
sales
into
Russia
over
the
last
couple
of
years.
So,
what sort
of
percentage
would
that
be?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Sales
to
Russia
last
year
and
the
Ukraine
were
less
than
$300,000.
So,
it's
not
– it's
meaningless
for
us.
U
And
the
year
before?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
About
probably
less
or
the
same.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
U
Okay.
Thanks.
And
I,
sort
of
– you
have
an
energy
transition
project
team
in
Aberdeen
to
look
at
different
projects.
Could
you
just
talk
about
that
a
little
bit?
Sort
of
what
things
are
they
looking
at?
What
things
have
they
executed
so
far?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Sure.
U
What's
the
sort
of
vision
for
that
team
in
Aberdeen?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Do
you
want me
to take
that one?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Go
ahead.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
Well,
the
team
is
set
up.
Obviously
the
traditional
core
business
on
the
drilling
side
declines
for
the
last
– since
really
2015. So,
looking
to
diversify
into
areas
that
such
as
–
we
saw
some
casing
to
the
Eden
project
as
a
geothermal
well.
Other
areas
we're looking
at
is
the
– on
the
carbon
capture
side.
And
then,
more
medium-term
is
looking
at
things,
what's
going to
happen
with
the
[indiscernible]
(00:47:56) project,
hydrogen,
et cetera
as
well.
So, there's
a
lot
of
wind
projects,
floating
wind,
fixed
wind
there,
and
looking
how
we
can
sort
of
deploy
our
assets
to
help
secure
new
work
into
those
areas.
U
Okay.
Thanks.
U
Okay.
We're
going
to
take
some
questions
that
have
been
submitted
by the – via
the
webcast
now. The
first
one
comes
from
Mark
Wilson
of
Jefferies.
He
says,
can
you
speak
to
the
quantum
of
defense
market
exposure
through
Advanced
Manufacturing
business?
And
there's a
follow-up
question,
which
I
think
you've
already
addressed,
Jim,
with
regards
to,
do
you
expect
to
grow
that
market
– into
that
market
strategically
maybe
through
M&A?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
So,
the
defense
business
that
we're
doing
right
now
has
hit
three
areas
of
the
company.
At
Dearborn
and
Fryeburg,
Maine
is
the
largest
segment
of
it.
And
there,
about
60%
of
the
business
is
non-oil
and
gas.
And
so,
I
would
say
30%
of
that
is
defense-related.
And
those
numbers –
I
mean,
I'd
have
to
take
a
minute
to
go
calculate
all
that
out,
but –
I
mean,
when
you
look
at
our
overall
numbers
being
8%,
let's
say,
your
revenue,
you're
talking
maybe
2%
defense
then
–
2%
or
3% of
total
Hunting revenue
when you
look
at
defense.
And then
on
the gross
side
–
I'm
sorry,
on
the
other
areas,
we
have
picked
up
defense
business
and
Electronics
and
in
our
US
Manufacturing
business,
the
recent
ones
being
with
[ph]
Textron (00:49:25).
But
again,
it's
small
numbers
today.
So,
defense,
aviation
together
60%
in
Dearborn and then –
and
that
includes
the
satellite
business
and
then
the
rest
of
it
has
been
oil
and
gas.
So,
it's
small
and
growing
but
it's
a
focus
of
ours
to
continue
to
grow
on
that
business.
U
Great.
Another
question
from
Mark
Wilson
of
Jefferies
which
relates
to
the
bottom
line
for
2020
and
guidance.
Order
book
is
up
and
consensus
shows
a
15%
year-on-year
growth,
but
where
do
you
see
EBITDA
trending?
And
do
you
think
net
profit
in
absolute
terms
should
be
expected?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Well,
I'm
not
going to
give
guidance
right
now,
but
you
mean
our
goal
is
to
have,
yes,
a
net
profit
in
whole
for
the
year
and
for
– to
massively
exceed
what
we
did
this
year.
How
I
see
the
year
playing
out
is
the
first
quarter
is
going
to
be
still
relatively
flat
or
comparable
to
Q4.
Part
of
it
is
because,
as
I've
mentioned,
much
of
the
backlog
we're
building
right
now
is
not
short
lead
time.
So,
you
just
don't
walk
down
to
the
corner
store
and
get
30
feet
of
titanium
tomorrow.
So,
it
takes
time
to
get
all
of
this
into
the
system.
I
think
also
the
first
quarter
I'm
hoping
will
be
the
last
quarter
that
we
had
severe
effects
on
COVID
within
the
operation
of
the
company
because
as
I
had
mentioned,
January's
impact
to
the
bottom
line
alone
was
over
$1
million,
just
in
excess
of
inventory,
the
loss
absorption
and
the
likes
throughout
the
company.
So,
I
think
this
will
be
an
expanding
year
quarter-by-quarter
improvement.
And
how
that
comes
along
and plays
with
supply
chain
issues
and
the
like
remains
to
be
seen,
but
I'm
extremely
optimistic
for
the
year.
U
We've
got
a
question
from
Kevin
Roger of
Kepler. It
seems
that
frac
crews
are
almost
sold
out
in
the
US.
How
should
we
think
about
the
impact
for
your
activity
going
forward?
And
is
there
any
bottleneck
on
the
client
side?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Well,
frac
crews
available
[ph]
are (00:51:22)
sold
out,
but
I
read
the last
week
of
somebody
just
turning
back
on
two
more.
So,
I
believe
it's
the
old
story,
money
talks.
And
as
money
improves,
whether
it's
Transocean
saying
they're
going to
reactivate
one
of
their
deepwater
rigs
from
cold
stack,
the
client's
calling
and
asking
the
units
will
be
reactivated
and
they'll
be
there.
It
all
comes
down
to
what
are
the
economics.
I
do
believe
that
these
frac
operators
are
going
to be
much
more
disciplined,
understanding
that
we're
just
not
bringing
this
out
for
one
job.
You're
going to
have
to
do
a
long-term
contract
for
us.
So,
I
think
on
the
frac
spread
count in
the
US,
one,
they're
more
efficient
today,
so
they
are
doing
more.
You
can
go
and
look.
I've
looked
at
a
half
a
dozen
of
them
in
the
last
month,
whether
it's
EOG
or
Devon
and
the
like,
or
even
EQT
back
in
Pennsylvania,
they
all
talk
about
how
much
faster
they're
completing
these
wells
than
they
were
two
years
ago.
So,
you
have
the
same
kind
of
dynamics,
I
think,
moving
forward
with
the
efficiency
of
the
frac
spread
crews.
But
the
other
upside
for us
is
international.
And
I
think
we're
going
to –
we
had a –
I
thought
we
had
a
very
good
year
on
the
international
side,
and
I think
we're
going
to
see even
faster
growth
in
the
international
segment
for
Titan
than
what
you
do
domestically.
U
Question
from
James
Thompson
of
JPMorgan.
Could
you
provide
a
bit
more
color
on
the
revenue
generation
through
H2
and
what
were
the
key
drivers
there?
And
how
much
of
an
improvement
in
top
line
do
you
see
sequentially
in
the
first
half
of
2022?
B
Bruce Hill Ferguson
Finance Director, Hunting Plc
Well,
in
terms
of
our
H2
numbers,
we
were
14%
higher
in
H2 2021
compared
to
the
first
half
of
the
year.
I
think,
as
Jim
mentioned
there,
it's
difficult
to
see
through
everything
together
to
see
how
that's going
to
play
out.
We
are
looking
at
a
more
tepid
growth,
I
guess,
in
quarter
one
for
the
reasons that
Jim
just
outlined.
And
in
quarter
two,
once
we're
through
our
COVID
disruptions
on
operations,
we've
got
the
demand
there
especially
for
the
short
cycle
in
Titan
and we
see
that
improving
as
well.
But
there
is
a
lot
of uncertainty
there
as
well. But
certainly
second
half
2021
was
14%
higher
than
first
half
2021.
[indiscernible]
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
(00:53:33)
not going
to
give
numbers.
With
supply
chains
issues
and
the
like,
all
I
can
tell
you
is
it's
going
to
get
better.
It
should
significantly
get
better.
The
backlog
is
speaking
to
that.
The
oil
price
is
speaking
to
that.
The
industry
comments
from
our
clients
is
speaking
to
that.
Where
that
hits,
whether
it
hits
in
May
or
July
or
–
at
this
point,
it's
too
much
of
a
moving
target
to
try
to
put
a
number
and
then
be
held
to
it.
U
Okay.
And
another
question
from
James
at
JPMorgan.
You
talk
about
more
orders
and
more
inquiries.
Can
you
add
any
more
color
to
those
comments?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
On
the
inquiry
front,
keep
in
mind
a
lot
of what
we
do
is
provide
capital
equipment
to
operators.
So
if
you
look
at
our
Well
Intervention
business,
that's
basically
a
CapEx.
And
in
the
last
two
years,
the
amount
of
CapEx
spend
needed
by
our
big
– other
big
OFS
customers
was
nil.
When
you
have
1,200
rigs
and
600
of
them
are
sitting
doing
nothing,
you
go
steal
from
Joe's
rig
to
put
it
on
your
rig.
That
happens
a
lot
in
downturns.
It's
not
anything
extraordinary,
and
it
happened
big
time
in
this
downturn.
I
can
tell
you
specifically
in
areas
like
our
specialty
supply
business,
had
a
good
month
in
February.
Nice
turnaround
after
a
horrible
year
or
so.
That's
a
division
of
our
company
that
makes
replacement
parts
for
MWD
equipment,
same
part
of
the
cycle.
It's
a
business
that
a
couple
of years
ago
generated
$10 million
in
earnings
but
last
year
lost
$1
million,
just
to
kind
of
show
you
the
swing. But
it's
a
business that
relies on
CapEx
spend.
And
so,
no
different, when
you had 1,000
MWD
units
out
there
and 500
of them
are
sitting on
the shelf
and not
being used,
you
don't go
and
buy replacement
kit.
So,
that's
one anecdotal
thing
that
I
can tell
you.
We're
seeing
a pickup
in that,
for example,
that one
thing
there.
We're seeing –
actually,
I
can
tell
you
that the
backlog
for
well
intervention
equipment
in
Aberdeen
for
Q1
almost
exceeds
the
whole
revenue
for
last
year,
and
that's
only
happened
in the
last
60
days.
So,
like
I
said,
we're
seeing
indications
that
people
have
got
to
start
replacing
this
equipment,
and
that's
driving
my
optimism
for
the
year
going
forward.
U
Okay.
We've
got
no
more
questions
via
the
webcast.
So,
does
anybody
else
in
the
room
have
any
other
questions
yet?
Back
to
the
Mick.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
I've
got
a
couple of
questions, if
I
may.
Can
I
just
ask
about
your
views
on
the
US
OCTG
market because,
obviously,
that
market's
been
dominated
by
a
couple
of
major
seamless
plays
over
the recent
years
and
the
HRC
prices
are
collapsing...
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Right.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
...or
have
come
down.
So,
at
some
point,
you've
got
to
assume
that
the
domestic
mills
will
start,
and
I've
got to
think
that
that gives
you
an
option
for
the threading
of those
pipes
for
you
as
that
happens.
So,
what
are you
seeing
on
the
US
market, how
do
you
view
it?
And, obviously,
I
appreciate
your
views.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
The
US
market
is –
I
won't
say
which
mill,
but
I
talk
to
my
competitors
in
the
industry
on
a
regular
basis,
you
deal
with
the industry
things
just
like
I
see with
the
guys
from
[ph]
at
Oil
States
or
what
–
pick,
pick
one (00:56:35).
I
can
tell
you
that
some
of
the
mills
in
the
US
are
already
completely
booked
into
– well
into
Q4.
And,
right
now
you
can't
make
enough
5.5-inch
P110
collapse
seamless
product
for
the
US
marketplace
because
that
– that's
the
shale
wells.
And
then, there
are
some
changes
in
the
sizes,
but
all of
them
are
doing
well.
Tenaris
has
reactivated
their
operation
in
Pennsylvania.
So,
they're
going to
start
making
tubing
again.
U.S.
Steel,
they
still
have
not
fired
up
their
Lorain
operation
but
their
Fairfield,
Alabama
operation
is
running
full
tilt.
Other
independent
mills
that
we're
working
with
are
very,
very
busy.
OCTG
prices
are
very
high
in
the
US.
They're
some
of
the
highest
in
the
world.
That's
not
– it's
not
going to
change
this
year
for
sure.
So,
very
buoyant
market,
strong
for
steel.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
And the
new
domestic
supply
reactivating,
does
that
give
you
an
opportunity?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
I
mean,
the
thing
was
for
a
while
they're
seamlessly
– seamless
was
actually
less
expensive
than
ERW.
Like
you
said,
the
hot
rolled
coil
prices
had
just
gone
astronomically
through
the
roof.
That
is
starting
to
change.
So,
I
think
ERW
mills
will
become
more
efficient
in
the
year
–
as
the
year
goes
on,
that
will –
it
might
put
a
lid
on
pricing
but
it's
not going
to
reduce
it.
Because
the
demand
is
so
strong
and
that
means
5.5-inch
for
an
ERW
mill
is
a
sweet
spot
or
7-inch
or
[indiscernible]
(00:58:06)
that
they
use
on
these
mills –
or
these
wells.
So,
we
have
a
certain
number
of
mills
that
we
work
with.
Some
of
our
competitors'
mills
have
our
connections
put
on
them for
offshore
business.
So
again,
remember
it's
a
distribution
market.
So,
except
for Tenaris,
which
is
doing
the
rig
direct
model,
distributors
are
out
there
buying
[indiscernible]
(00:58:27),
buying
whatever
and
that's
how
we've
been
able
to
benefit
in
the
marketplace
plus
working
with
some
of
our
independents
out
there.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
Okay. And can
I
ask
about
this
subsea
couplings
business?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
I
think
one of
the
surprises we
had
last
week
was
one
of
the
subsea
tree manufacturers
saying
we're
back
to
2020, not
2014/2015
sort of
levels
on
subsea
trees...
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
...
[ph]
which
is
about
350
being
ordered
(00:58:46) this
year...
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
Yeah.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
...which
is
a
lot
higher.
What are
you
seeing?
Because
you
should
see
a
direct
feed-through
of
that optimism?
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
No,
we
will.
And
that's
one
of
the
things
that
I'm
excited
about
going
–
that's
not
a
today
issue.
I
mean,
they
order
those
trees, you're
talking
the
[indiscernible]
(00:59:00) I
mean
their
lead
times
are
way
out
on
that.
Our
couplings
are going
to
be
later
in
the
cycle.
But,
honestly,
when
I
look
at
our
Subsea
business
today,
there's
no
business,
I'll
probably
have
more
optimism
about
it
in
general
than
that
is
going
forward
because,
again,
we
have
the
technology
with
the
proprietary
product
line.
I
just
am
very
optimistic.
And,
yeah,
I
follow
FMC
and
see
what
they
said.
And
that
will
feed
directly
into
our
Stafford
coupling
business.
M
Mick Pickup
Analyst, Barclays Capital Securities Ltd.
Okay.
Thank
you.
A
Arthur James Johnson
Chief Executive Officer, Hunting Plc
We're
all
done.
Great.
Well,
again,
thank
you
for
everybody
that's
listening.
Again,
I
want
to thank
the
team
at
Hunting
for
all
the
accomplishments
that
were
made
in
a
very,
very
challenging
year.
I'm
glad
COVID
is
getting
behind
us.
We're
all
sitting
here.
By
the way,
nobody
has
a
mask
on,
so
that's
a
wonderful
thing
today.
So,
again,
stay
tuned.
I
think
this
is
in –
if
baseball
terms,
this
is
probably
the
second
inning
of
what
I
think
is
a
long-term
game
for
us,
and
we're
well
positioned
for,
I
think,
a
super
year.
So,
thanks
for
being here.
Good morning, everybody. For all those here, thank you for struggling through the Tube strikes and everything else to make it here today. For those listening online, good morning or good evening from wherever you're at. And thanks for taking time to join us on our call.
I'm going to start off on the page 1 that says the world has changed. But before I get into the details on that, a lot of things have changed more recently in the last seven days, more – as much so in the last month or so. But one of the changes that I just want to acknowledge today is with Richard Hunting. So, Richard after – Richard is leaving the board and he's ending 50 years of service with the company. So, Richard, on behalf of all the employees and all of us at the team, we just want to thank you for your contribution over the years and wish you a great retirement. So, I just wanted to go and say that first before we get into this.
Thank you, Jim.
So, thanks. Getting into the presentation now, as I mentioned, it is amazing the changes that we've seen in the outlook for our business and in the world just in the last couple months. When I talk to everybody, all the analysts and investors on that like a year ago, I made the comment that 2021 would be a year of healing within the industry. Well, that healing definitely happened, and all you have to do is look at the earnings announcements from the major E&P companies around the world and look at the amount of cash that these companies have been throwing off in the last 12 months. They have reduced debt dramatically. They have paid increased dividends. They have bought back shares. They've done about everything, but put a lot of money back into the drill bit. And we had – in most of 2021, Wall Street has just been thrilled with this, and you've seen the uptick in share price and the like.
So, fast forward now to the end of this year, even taking away the fact of the crisis in the Ukraine, we ended up in 2021 probably with the most momentum I've seen going forward in the company in at least the last couple years. And so, we'll talk a lot more about that as we go forward. But the key points for us were the COVID restrictions are finally being lifted, and I can't overstate enough the effect that COVID has had on our operation and, I believe, everybody else in the oilfield service business for the last two years. So, the results that we showed today – I mean, it was a tough year, just as a reference point, realize that in 2021, we had the whole year of COVID. And 2020 is the reference we go back to. I have to remind people, we actually had a good Q1 in 2020, so when you're looking at the comparisons.
But 2021 is definitely the bottom. COVID was a horrible – I mean, a horrible operating environment throughout the group. When we saw the rise of the new variant hit the world, it very much affected our results, especially in December and January, because due to social distancing and what we had to do with government regulations, it just made it a horrible operating environment and a huge struggle to the tune that we could quantify over $1 million of effect to the bottom line in each of the months of December and January. So, the good news is that is over. It is improving in February. And we look forward to putting this behind us as all the people in the world do and getting the economy going forward without these constraints.
The effect over the last couple – on the last couple days, energy security, I'm putting on there, with all the money that these oil companies had, a lot of them are now running into the problem, as you've heard this week from the bps and the Shells and the Exxons. All of a sudden, a lot of their barrels are now going to be off the market. And I think with the political issues going on, energy security is taking – going to take a [indiscernible] (00:03:58), just like defense spending is going to increase. I think you're going to have to see a large ramp-up in E&P spending as people look to replace lost barrels and also want more security in their energy supply.
For us, the third point, our order book has accelerated dramatically. Every business unit in the company has seen an uptick in business – orders and inquiries since, I would say, the end – since Christmas or middle of December. And so – and a lot of our businesses where we instructed, you know, we went to our clients, hey, you need to be placing orders, you need to do this. The budget constraints that most of our clients were under really hindered them being proactive in getting a jump on activity for 2022 and beyond, but we have seen that change dramatically in the last couple weeks. It's again starting in late last year, and I am extremely optimistic that we are in the early stages of a boom and this company through all the changes that we've done, the restructuring that we've done in the past two years is in a very excellent position to benefit from these changes for the years forward.
So, with that, I'm going to pass it on to Bruce to go through the finances, and then, I'll come back for more narrative and questions.
Thanks, Jim.
If I can take everyone to the slide 2, and this slide captures the main financial highlights for the year. First point is that we ended the year with $114.2 million of cash and bank, again reflecting a strong balance sheet and strong cash focus during the year. We secured after months of work the asset based lending facility, which will allow us liquidity of another $150 million. Our balance sheet remains strong, finished with $871 million of assets.
Our EBITDA for the year finished at $3.1 million for the full year. That was split between a $3.6 million loss for the first half. As Jim mentioned, momentum picked up for the second half and we had an EBITDA profit of $6.7 million. Revenue was $521 million against $626 million. As Jim mentioned, 2020 benefited from a strong quarter one. 2021 had the full year impact of COVID. And a final dividend of $0.04 per share declared given our $0.08 for full 2021.
If we go to slide 3, that's our group income statement. We're showing a revenue at $521 million, which is $104 million lower than we saw in 2020. Again, that's a slower than anticipated growth, continuing disruption through COVID, and a lot of capital discipline throughout the year from a customer base as well.
Gross profit finished at $100.6 million, with a 19% margin against the 20% we saw in 2020. Some pricing pressures continued throughout the year. EBITDA, as I mentioned earlier, was a $3.1 million versus the €26.1 million in 2020. Majority of that €26 million in 2020 was generated in the first quarter. That saw a widening of the loss from operations in 2021 to $35.1 million. We had a loss before tax of $40.6 million, a small tax charge gives us a loss after tax of $45.5 million. And I mentioned the final dividend per share of $0.04 to give us a total dividend of $0.08.
If we move to slide 4, we've got a breakdown of our sales by our main segments. We see Titan reporting an increase of 17% year-on-year. Again, that shows the stronger completion activity in the US on the – and also Canada. We also saw international sales up 23% throughout the year as well. So that's – that gave us a 17% uplift on the revenue.
Small operational loss of $0.9 million, also we didn't make up operational profit for quarter four. And North America, we were down 18% with operating loss of $16.1 million. Again, results were impacted by the continuing effect of COVID. We've also got the capital discipline from our customers kicking in there as well, meaning less purchases and decline in main offshore basins like the Gulf of Mexico, which we support through North America. EMEA reported sales of $58.1 million, again 26% down on 2020. Capital discipline kicking in there, less drilling for the North Sea, so that impacted our numbers there. A tough year for AsiaPac, we saw the biggest drop there from $109 million in 2020 to $48.1 million. Again, some of our key markets like the Middle East that was down 22% in terms of rig count. Again, the Chinese pipe was less compared to last year as the government removed some export rebates as well. So that was 56% down on our previous revenues.
If we move on to slide 5, what we've done here is breakdown the H1 and H2 numbers just to give a little bit of more analysis. We see the $521 million split from H1 and H2. So we see the first half of the year was $244 million and that increased 14% to $277 million. So if you look at the Titan sales on that were up from $88 million in H1, up to $100.6 million. A larger increase, if you look at H2 2020, when we were down at $59.2 million, so we're 70% higher in H2 2021 compared to H2 2020. If you look at the results from operations, we had a loss of $23 million in H1 and that decreased to $12 million in H2, again showing an improvement through H2.
Moving on to slide 6, we break down our sales by our key product groups. Not surprisingly, the Perforating Systems – our Titan business was the largest product line for the year, and we saw an 18% improvement on sales on 2020. OCTG, as a product line, was the hardest hit, 35% down. Majority of that came through our APAC division and the remainder split evenly over EMEA and North America. Advanced Manufacturing was 20% down. Again, that was impacted by the reduction in capital spend for some of our main customers. Subsea, the client was a little bit more modest. Good gains in our RTI acquisition, but there was some decline in the Stafford and ENPRO business.
Intervention Tools, which is dependent on CapEx from customer base was affected by the capital discipline and that was down at $25.8 million. So, that gave us our $521.6 million. Out of that, oil and gas was $484 million, with non-oil and gas $37.6 million, which is [ph] 7% (00:10:40), which is similar to previous years.
Moving on to slide 7. It's a breakdown of our amortization and exceptional items. We had our $7 million from amortization of acquired intangible assets which relates them [ph] in Titan like (00:10:54) acquisitions. In terms of impairment, our largest item is $25.9 million relating to our inventory. This is our – normally [indiscernible] (00:11:04) levels of trading, reduced our return rates, and increased the aging of inventory. $5.2 million of that relates to the North Sea restructuring. There was $10 million for our PC equipment in the States as well. But a lot of this equipment is still good equipment. It's not obsolete. And we believe we'll get value for that going forward as well. The $8.6 million of the property that relates to our Fordoun property up in Aberdeen, and that was a result of the write-down after the North Sea restructuring. And remainder, of course, their restructuring cost, which is some redundancy cost in US, and AsiaPac. And that all came to the $44.9 million.
Moving on to slide 8, a breakdown of our balance sheets. We see our PPE coming down from $307 million to $274 million. That reflects low CapEx. We only got $6.5 million of CapEx during the year. We've got $29 million [indiscernible] (00:11:57). And we've got that $8.6 million impairment on the Fordoun property. We've got the IFRS 16 $24.7 million asset there. Goodwill, quite constant. We hold our Rival and Cumberland investments in the $19.4 million. Working capital showed a good reduction from $358 million to $278 million. Majority of that is through our inventory reductions. We've got our $114 million of bank and cash. And that gives us our net assets of $871 million in total versus $976 million in 2020.
A further breakdown of our working capital showing our gross inventories coming down from $325 million to $263 million. That was good progress there. It does reflect $31.5 million that came – reduction due to the North Sea restructuring. After provision for inventories, we see that – which includes $25.9 million. That gives our net inventory position of the end year of $204 million. We see our receivables perk up a little bit as the trading improves, and payables reflecting some more purchases coming through as well. In terms of the ratios, we're favorable with our reduced inventory figure, down to 163 days, and receivable days going the right way down to 87.
Just take you through the group cash flow. For the year, we had a free cash flow of $54 million. There's two main components to that. One was the proceeds from the North Sea restructuring and a small assets held for sale, $4.4 million, that gives a $34.9 million. And then we've got the working capital improvements as well, gave us $54.4 million free cash flow, which helped. We then had some spend – limited spend on capital intangible assets and some investments in businesses in terms of Well Data and Cumberland. The dividends of $12.8 million, some treasury shares for future share awards and that gave us [indiscernible] (00:13:53) $12.5 million in our cash and bank.
Next slide, slide 11. Looks at that minimal CapEx amount. Nothing much really on here other than just some maintenance spend and some equipment upgrades for Ameriport and Trenchless for $6.6 million in total, along with intangible assets of $2.7 million, gives us $9.3 million.
Our slide on 12, just a little bit more information on our order book, as Jim mentioned, has increased over the period. Just to – the graphic at the bottom show the order books have increased 41% since 31st of December 2020. Majority of that is in North America. Subsea Spring, which is our RTI acquisition, has $31.8 million of orders. A lot of that is for our stress joints for the Gulf of Mexico and South America. We've seen improvement, which is not reflected on these numbers, but now AsiaPac has won $26 million of orders from China. All businesses across the board are reporting an increase in inquiries, RFQs and orders. Our book-to-bill ratio in quarter four was 1.45.
The last slide is just I mentioned at the start our asset-based lending facility, which we completed in February. This is a $150 million ABL. We have two banks participating, HSBC and Wells Fargo. It has an additional accordion feature of $50 million, which is subject to the lending group's consent. It is a flexible funding arrangement, which is on the back of our balance sheet. And it reduces our sensitivity to the earnings-based covenants. It makes sense in that the balance sheet values are more stable than EBITDA given our volatile sector. And then, the classes of assets we look to borrow against are receivables, inventories and our freehold properties. So we've got an open availability of $100 million, the freehold properties will be coming on by the end of the month, and that will give us roundabout [indiscernible] (00:15:50).
Okay. And that's me, finished my slides. Back to Jim.
Okay. Thanks, Bruce.
On slide number 14, just some bullet points there on our thoughts on the E&P CapEx optimism that we feel out there right now. And again, we put this slide together before the events of the last seven days. So, really, at the end of the day, this is following a cycle that is not new that we have seen many times over the last 30 years. The price of oil and gas is the fuel that's going to drive activity. And right now, that fuel price is in overdrive. And so, we think that animal instincts will once again kick in. Depletion does not go away. The lack of investment since 2014 is showing up on the reserve base of a lot of operators around the world. And at the end of the day, you got to put the drill bit to work.
The ESG pressures, while they've been very pronounced in the last couple years, they will still be there on the E side that I believe that the energy security issue and the outrage from consumers over high – the high effects of natural gas prices and gasoline prices are going to have an effect to get people back to work.
Keep in mind also for the last two years, even if you weren't a company like Hunting, the service companies at the rig site, the drilling contractors, I know from numerous conversations I had with our team in Southeast Asia, COVID restrained a lot of potential activity. I mean, especially Malaysia was hard hit. There were a lot of things there that did not happen because of COVID. So, we're – again, we're just very, very optimistic that this thing is going to take off. And I've never – I don't feel I've ever sat in a position like I am today as far as seeing what I think is just a stellar outlook going forward.
On slide 15 and we're going to take a few minutes and talk regionally wise. Slide 15 is really focused on the DUC count and the rig activity in the US. We have seen the rig count accelerate back. Still, in my many years in business, this would be a very poor rig count in total. But rigs today are more efficient. And we've been hearing of spud to completion, spud to the end of drilling times, averaging something like 17 days in parts of the Permian. So, because of the technology, the oilfield service industry has put in place, the drilling in that is much more efficient. So, 600 rigs today is probably the same as 700 rigs five years ago. So, that's an efficiency factor to keep in place.
The DUC level is continuing to decline. You can see the graph showing the December 2021 number. And in reality, I think half of those don't even exist, because as I've stated in the past, some of these were bad wells, wells drilled to hold acreage, companies went bankrupt, whatever the situation is. The bottom line to it is that you got to keep drilling to stay in business. And so, as the easy money was made, keep in mind, entering the downturn, these wells were already drilled just sitting there, so half the cost was already done. Now, with that being – when those being completed away, again, it's a fundamental that's going to make the future look, I think, very, very bright for us.
One of the areas that I don't have a slide on though is in the Gulf of Mexico. It has been a laggard in its response back activity wise. A week ago, the rig count was down to a historic low of 12. But I have been encouraged by the recent dialogue that I've seen from Transocean and some of the other drillers on new contracts being picked up in the Gulf of Mexico and in the international market. And keep in mind, this is a long cycle business. So, you can't just pick up a rig and start putting a hole in the ground in a month. So, the trend is going positive in the offshore marketplace. You've seen Transocean announce day rate increases. So, even though the number today is not healthy, I think that it'll be a significant improvement by year-end.
Slide number 16, we kind of go around the world. I'm not going to go through and read all of these. Canada was a very nice surprise for us last year. Our Canadian business from Titan increased 24% year-over-year and the new business model, our team in Canada has managed, where we got out of the OCTG distribution business and into using the distributor model, turned that from losses to profits in the year. And so, we're happy that – on how that has turned out. And, again, good returns with limited capital employed.
In the North Sea, Bruce kind of touched on, a big issue for us there was the disposal of our UK OCTG business, and I'll talk more about that later. But, the company, I think we're well positioned in that marketplace going forward with some additional optionality that we didn't have prior to that disposal.
AsiaPac, the team there struggled last year. That was the last of the regions, one of the last regions to see the downturn affect them. So, they've been later in seeing the recovery. The good news is that they've started the year off with a bang. I think that we'll have a very good year in AsiaPac.
Middle East, they always say that the last barrel of oil ever produced is going to come out of Saudi Arabia. So, capital spend has been restrained there. The rig count in the Middle East is still significantly below where it was pre-COVID. But, again, depletion doesn't sleep and they'll have to pick up the drilling again.
Offshore South America has been an area that I have really been pleased with for Hunting. And I think probably our business in 2022 in offshore Brazil and in the Guyana, Suriname region will be the biggest ever in the company's history. Based on this success, the titanium stress joint business has had, in those two markets, as well as the general recovery in Subsea. So, a great job for our team there.
And then Africa; Africa is still tough. There's talks of things changing there as far as government fiscal policies and the like. I think everybody probably saw Shell announced a big find off Namibia here earlier this week. So, to me, that's an evolving story, but at the end of the day, it's still – you still deal with the difficulties of Africa.
On slide 17, just some points on Titan. Jason Mai and his team, I think, did a very, very good job in the year in a very, very challenging marketplace. They continued to improve year-on-year, focusing on technology, focusing on new products coming into line, a list of those are all there. For us, again, we saw our business improve 9% quarter-on-quarter at the end of 2021. We were the first ones to come out and announce price increases in late-Q3 of 2021. We've announced another round of price increases in the neighborhood of 7% in February for these product lines. And our job is to try to make sure we stay ahead of the inflation in the industry, which we will do, and continue to enjoy our number one market position place in this segment.
Systems sales continued to increase. And right now, about 20% of our total revenue dollars in Titan are now factory loaded guns going out to the field. We're still selling components, we sell systems, we sell guns. One of the changes that we have done is we have on purpose left some of the commodity and gun business because I'm just not going to play in the dirt at those low levels of pricing in today's marketplace. So, again, a good year overall relative to the rest of the market, not what we had seen in the past, but we did see good growth in a number of geographic areas. And like Bruce had said earlier, we were very pleased with the uptick in our international sales year-over-year.
Slide number 18, I'm not going to spend a lot of time on this, but it just shows that the team at Titan has not been standing still. A lot of development and time going into developing our Charge technology, even more responding to the needs of our client, working on areas within our existing product lines to reduce the cost bases, because I really believe our performance levels are second to none out there as far as safety and dependability go. So, right now, it's looking at the product and just making sure that we can maximize our ability to play in the business.
Slide number 19, I'm going into North America. A tough year overall, again, the COVID downturn hit literally every business and had effects. 2021's passed. We're on to 2022. There's encouraging upside in everything in the – every business unit in the US for 2022. Our AMG business is seeing backlogs expand aggressively. The Subsea business, I talked about doing very, very well. Premium Connections, our US Manufacturing business, all of them seeing an uptick in activity, and we believe it'll go back to delivering very good results this year.
Slide number 20, the EMEA update. Tough year last year, the restructuring in place, Bruce and I lost a lot of – had a lot of sleepless nights, and there was just a very long drawn out process to get this done, but it was one of our strategic goals to exit a business that; A, we didn't – we really didn't sell our own products through this. So, strategically, it was questionable. The market has changed. And again, the amount of capital tied up was just – it's just too much for that size of a marketplace.
So, going forward, we're a much leaner operation. I mean, even looking at February's results, which were just starting to come in off, I mean, we have positive results in EMEA driven by a change of profitability in Aberdeen. So, I'm excited. I'm thankful for what the team did. We were able to reduce some SG&A costs with this transaction. So for those Hunting employees that were part of the transaction, I do want to say, a special thanks for all that you did and we wish Marubeni-Itochu all the best in the future, because we'll be working a lot with those guys.
But the opportunities going forward, I think we have more optionality with our business now, because we're not competing in that certain segment of the pipe business. And yet, we are continuing to look at things like the enhanced oil recovery, improvements in wells, and intervention and the like to enhance our profitability in that region.
AsiaPac, tough year for the guys in Singapore. It was even compounded more by some of the fiscal terms in China affecting OCTG. But the bulk – the thing I got to highlight is the bulk of the dollars going into AsiaPac are actually OCTG sales, and a lot of it was to the Middle East. And as I said earlier, with the Middle East rig count down 33% there, we just had not seen that recovery in demand.
Going forward into 2022, we are very fortunate to have the relationship with Jindal, which we'll talk about some more going – in the next couple of slides. That has already paid dividends to us with orders with ONGC and other players in the Indian market. So, we're very thankful for that and Daniel Tan and his team did – have done a great job on pushing that across the line for us for the joint venture.
But Chinese fiscal terms regarding taxes and the like have improved in China. But one important other note that nobody's talked about yet is, with the situation in the Ukraine and Russia. There's all of a sudden going to be a gap of many, many thousands of tons of Russian pipe that will not be in the international marketplace. So, we see people like the TMKs and the like as competitors in the Middle East, in Southeast Asia. I'm pretty sure those tons are going away now with all the sanctions in place. So, that has to be a positive for OCTG opportunities going forward in 2022, even though it's driven by a sad state of affairs.
Slide number 22 talks about our strategic accomplishments. Bruce has talked some about the ABL. We've talked about the Aberdeen selling of the OCTG. We still look internally for ways to save money, reduce our costs. We've done some things on consolidating some business units. You'll see a slide later where we'll talk about Singapore. So, we're not resting on our laurels as far as where we're at today, and we continue to put our lean manufacturing initiatives in place and the like to drive our cost base down.
Our middle slide investment in non-oil and gas, we looked at our current portfolio, we like what we have, but we want to enhance it. We want to find out how to grow better in new areas and pick up new technologies. Two investments; one Well Data Labs, Denver-based company, focusing on analytics and machine learning. We have been collaborating with them along the lines or with the Titan, our Titan business unit, to look for ways to provide better analytics and machine learning data for our customers and to sell our products better in the perforating side of the business. And so, we're pleased with that relationship and it continues to go forward and we continue to learn more.
On Cumberland, when we looked at our Advanced Manufacturing business, it was an area where we can see the trend, especially in non-oil and gas areas like aerospace and defense where 3D printing is becoming more and more prevalent and more and more the way to have things done. Organically, it would be extremely difficult and costly for us to do that. We came across – made a relationship, came across some people. And so, we're very pleased with that investment. And we've already been funneling opportunities to the Cumberland people and kind of using them as our 3D printing option when we look at supplying products.
Expanding markets in the next slide. The Jindal relationship, again, I'll talk some more about a great accomplishment for the team this year to get done. The Nammo defense system delayed – time delayed fuse deal. Jason Mai put that together. Great job. It is primarily focused on the TCP market which is more offshore, but it's also going to open up some doors for us for military applications and aerospace that we are working with right now.
The organic oil recovery finally making steps with positive purchase orders. Nobody probably knows that business better than Bruce, so I'll let him take the questions on that. But good results there. And again, it's one of those ESG stories where companies can do more with less. And so, we're happy to see that continue to be nurtured.
And then lastly, the Eden Geothermal project in the UK. That just highlights to me a fact that for 30 years, Hunting has been involved in the geothermal market, whether it's been the Eden project, whether it's been in the Philippines, Indonesia, Southern California, so we have a good history of that. Today, it's a small market. So, we're hoping that that does expand.
Slide 23, just some more bullet points on the Jindal relationship and the joint venture that we have going on there. We're hoping this is up and running and threading pipe by the end of the year. And again, with the supply issues in AsiaPac, with what we see as a potential for accelerated drilling in India and in the Middle East, we think this is a great relationship going – going to be a great relationship for the company going forward. And we're very, very thankful to the Jindal people for working with us to put this together. So, I think it'll be very good.
On the lines of pipe and OCTG, on slide 24, just wanted to give you a shot there showing the continued growth in our TEC-LOCK product line. It continues to expand. Connection business continues to do well. We continue to work with a group of independent mills that supply us access into the marketplace. But again, all this is through distribution. So, Hunting is not owning the pipe on this. We're selling the Connection Technology. We're threading the product at our own facilities in Houston or Marrero, Louisiana or through licenses in the Gulf Coast or through licensees in Canada. But just kind of a snapshot there.
Next, slide 25, big home run for our Subsea business this year. The – I mean, I'm just thrilled with how this has progressed considering what we paid for this business in September of 2019. As the line shows, we've booked $68 million worth of business in two years. I think this will continue to accelerate. The business we picked up at the end of the year with Exxon in Guyana is the largest order that I think has ever been secured for the titanium stress joints with the company. It exceeds $20 million and again, because of that technology, because of some cost savings measures, clients are seeing by utilizing this over some other solutions, I think there's big, big upside into this.
ENPRO had a tough year. A lot of it's stagnant because of the COVID-affected downturn, but the inquiry levels are up and we're expecting a good year for ENPRO this year, as well as our historic business at Stafford on the coupling side, which is directly related to Subsea Tree awards. We continue to be the market leader in supplying those products and we just need the activity to pick up, which it will.
Slides number 26 and 27, I've already kind of talked about, but just some bullet points there for everybody on Cumberland and on Well Data Labs.
Slide number 28 talks about one of our cost savings initiatives. It's a consolidation move we're making in Singapore right now, consolidating three – basically three into one, reducing our footprint, getting more efficient. And it shows you that when real estate issues allow us and we can make these moves, we're constantly looking at ways to improve our performance and this is one that we're doing.
Slide number 29, our ESG slide. A lot of points on there. I'm not going to go through them all. We continue to strive to be in the – a high performer in all of those areas and to do the best. It's nothing that we haven't done in the past. For the year, in 2021, just to kind of bring it all together, we had record HS&E performance, great quality performance. So, Greg Farmer and his team did a super job. It continues to be part of the culture at Hunting, and I just want to say my thanks to the – all of the Hunting team for their efforts in that area as well as for all the contributions made in a very difficult marketplace in 2021.
Lastly, on page 30, our summary of our investment case. And honestly, it's kind of like when I look at our oil company clients and say, well, if you don't drill now, when? When I look at our share price and our value in the marketplace today and talk to investors like, if you don't buy now, then when will you? Because honestly, we've got a great runway ahead of us, we have great product line that has been streamlined and made more efficient, new product technologies which are taking off for us. And I just believe, again, we're in the early stages of a boom that's going to be multiyear.
So, with that, I think I'm done. And I will now open it up to questions. Anybody has any?
Thank you, Jim and Bruce. We're going to take questions from the room first. Ask – anyone asking the question to state their name and company into the microphone for the benefit of those on the webcast. Thank you.
Hi. It's Mick Pickup here from Barclays.
Hey, Mick.
Can you just talk about the Titan business? Obviously, you've seen the frac count, frac count recover. And if I look at the number of completions, it's back up at 900 a month. And I think we peaked about 1,300. So, it's come back a long way. But your revenues in that business aren't what they used to be, if I look on a like-for-like basis. So, you started talking about pricing at 7% now, but you're used to 20% margins in that business. So, when the conditions come, you can get back to 20% margin, because it looks like prices got a long way to go?
Well, I can tell you for the year, the margins were not. But I can tell you, in Q4, margins were over 23%. So, they are trending in the right way and should continue to go positive. On the revenue dollars themselves, the market is not what it was two years ago as far as the quantity of completions out there. We also – as I had mentioned, we are passing on some of the commodity into the business, Mick, because it's just – you're just burning up and using steel for no purpose. So, we want to focus more on the technology side.
Pricing is not – obviously not where we want it and not where it was in 2018, and that will be an evolution of suppliers getting back to that level. But in certain segments of the business, like on the Charge side, one of our competitors has been out there leading the low end of the pricing. I'm not going to say who. On the systems side, I think we're pretty consistent with our – the number – us and the number two supplier. Others out there, it's kind of – still kind of a – there's still kind of too much inconsistency out there in the marketplace.
So, what we all need is demand. What we all need to do is realize replacement costs are going to be needed to go forward, because steel has risen. Powder prices have risen. But it's not a – I can't give you a quick answer and say June 13 pricing will be up $50 a gun. But I think the steps are that it's going in the right direction.
Okay. And then, secondly, you say your order book is up 40-something-percent year-on-year. Obviously, a lot of your business has quite fast turnover.
Correct.
So, what's it been up on end of 3Q into 4Q? I'm just looking about run rates today for this year going forward and the US spend is going to be your best by 30% on our estimate. So, just thinking how is that progressing at this juncture.
Well, I mean, Mick, it's all going positive. I mean, the key point with the number we gave was the order volume is accelerating rapidly. I mean, it's – I can't give you that number. Bruce, you got anything you can add to that?
Nothing. Certainly, quarter four is what we're seeing coming through with the Subsea, as we mentioned there as well. And then, post-year-end as well with the orders we mentioned, these are packed and also the RTI again [ph] we're seeing China (00:39:22) starting to coming through as well. The [indiscernible] (00:39:27) in quarter four, most definite, it's an upward trend that we saw through the backend of last year, Mich.
Yeah. And the Titan business as we've always said, the Titan business stays the same. There's still no visibility. I couldn't tell you what the number's going to be in April, because you are basically month to month and, I think this one graph even shows as we track that, you'll see the number for Titan. You're never going to walk in and say I have a $100 million backlog at Titan. So, it's really the AMG business, the Subsea business, the AsiaPac Premium Connection business with pipe. Those are the areas where you establish a backlog and it takes the time to get those through the system.
Hi, there. Erwan from RBC. So, my first question on pricing in Titan has been answered. I guess I have two other questions. First on potential like small targeted M&A. I remember two years ago, deepwater, a proprietary acquisition were like a main area of focus. How do you think about it now? Has it changed?
It hasn't changed, unfortunately. What you just explained was RTI, it's been a home run for us. So, I think – so we proved that. But, going forward, it's one of those cases that we're continuing to look at acquisitions. We've got the firepower to do it. Our focus is on same thing hasn't changed, deepwater, proprietary technology, completion related in that side on the oilfield services. On non-oil and gas, more on the high technology industrial side, perhaps aerospace, industrial product size.
The issue is, it's no different than us not wanting to sell our shares at £2 a piece. Everybody had poor earnings to try to do multiples on in – from 2020 and 2021. So what are you basing this on? And so, some companies that we have had dialogue with, they'd fit the bill of what I'm talking about. The main message has been we got to at least wait till the end of this year, because one, we need to prove out, pay the new products we've brought online are generating earnings. We don't want to sell ourselves short. And unless it's a private equity firm needing to exit, there's just thin pickings whether it's oil and gas or non-oil and gas right now, just because the value trying to relate to putting a value to EBITDA earnings, for example,
Sounds good. Okay. And maybe a slight follow-up to that, but getting back to the Russia situation. So, for our other companies under coverage, we do see companies diverting their crude sourcing away from Russia, including into North Sea, North Sea oil. So, you touched on this a little bit, but can you clarify that you've seen, that you heard more interesting conversations over the past couple of weeks in terms of pick-up outside of US onshore and in new areas? And that's – like getting back to the previous question, like non- oil and gas is a potential area of interest in terms of growth and does this situation change it?
No. I mean, our – we will – we are an oilfield service company. We're going to always be an oilfield service company. On the diversification front, the key is that we recognize that we've had – we have rainy days, the sun is going to shine, right? So, the sun's coming out right now in our industry. But there will be another rainy day at some time. I don't know when. What would be – an advantage would be to have the skills of the company in the engineering, in our technology, be able to brought into other product lines that can get a more steady stream of earnings long-term across the board.
As far as the topic of the Russian impact and all, we've – again, we saw a big uptick in activity literally since Christmas. A lot of it was clients were told you cannot spend money in 2021 period. And we had many cases where we went out and told them, you need to get orders in place now. You needed this. We can't. And then, January 1 hit, and it's like we have a new budget, we can now spend money. So, there's still been a lot of capital discipline in the industry, but that – we're just seeing all the right signs that that is going to be changing.
And especially when you look in the US at the amount of private operators that are out there. I mean, we're doing business with companies I never heard of three years ago. These are not – I'll bet you guys haven't heard the half of them. And they're small operators running five rigs in the Haynesville drilling natural gas, or three rigs in the Permian, and its private equity money, and they're not worried about returning cash to shareholders today. They're worrying about – which they are. I'm getting that $90 a barrel and off we go.
And another factor I think that's going to benefit us all going forward is, last year, much of the production produced by a lot of the big companies, a lot of the big independents, they had hedges way under what the $80, $90 barrel range was that they were seeing in the open marketplace. So, these guys were not realizing $80 or $90 a barrel or realizing $4 or $5 an Mcf gas price. Those are all falling off. If you like – if you thought the cash flow was great in 2021, the cash flow is going to be extraordinary in 2022 for E&P players in North America.
Yeah. Understood. Thank you.
Thank you. Thank you. Thomas Rands from Investec. One for Bruce, organic oil recovery, your specialty subject. Could you give us an update on where that is with the agreement with the kind of the IP owner and how you see the kind of that product expanding in the Middle East, but also what the opportunity is for Fairfield, please?
Sure. In terms of agreements, so we've been – we worked really closely with owners of IP over the last four or five years. So, we really sort of step in step with them. We're in discussions around, let's leave it there just in terms of securing a longer-term agreement from that site. The Middle East has been really exciting. That's been a target area for us. I think every major operator is either testing the product or commercial status. So, it's an area that lends itself well to the technology itself, in terms of the land wells, in terms of the geology and the ease of getting the product to the rig site as well.
So, we have secured some purchase orders out there for some of the major operators. So we're really looking to build on that success in the Middle East and just really rule that product out over the region. We're also in other areas such as Pakistan, the Far East as well.
In terms of the North Sea, we have a major product – major project coming up in North Sea with one of the major operators there. That should be deployed around about anytime. So, that'll give us our offshore focus as well. So, our land projects in the Middle East, we'll also have the commercial project in the North Sea as well. So, that's going to be exciting year because it does take a long time to get acceptance on new technology. The test results have been very good. We're now getting proven out with these major guys and we're seeing the benefits of the POs coming through as well. So really, 2022 is about just building on that success.
All right.
Okay.
Hi. It's [indiscernible] (00:46:51). Just a quick question on Russia. I'm sure you do have sales into Russia over the last couple of years. So, what sort of percentage would that be?
Sales to Russia last year and the Ukraine were less than $300,000. So, it's not – it's meaningless for us.
And the year before?
About probably less or the same.
Yeah.
Okay. Thanks. And I, sort of – you have an energy transition project team in Aberdeen to look at different projects. Could you just talk about that a little bit? Sort of what things are they looking at? What things have they executed so far?
Sure.
What's the sort of vision for that team in Aberdeen?
Do you want me to take that one?
Go ahead.
Yeah. Well, the team is set up. Obviously the traditional core business on the drilling side declines for the last – since really 2015. So, looking to diversify into areas that such as – we saw some casing to the Eden project as a geothermal well. Other areas we're looking at is the – on the carbon capture side. And then, more medium-term is looking at things, what's going to happen with the [indiscernible] (00:47:56) project, hydrogen, et cetera as well. So, there's a lot of wind projects, floating wind, fixed wind there, and looking how we can sort of deploy our assets to help secure new work into those areas.
Okay. Thanks.
Okay. We're going to take some questions that have been submitted by the – via the webcast now. The first one comes from Mark Wilson of Jefferies. He says, can you speak to the quantum of defense market exposure through Advanced Manufacturing business? And there's a follow-up question, which I think you've already addressed, Jim, with regards to, do you expect to grow that market – into that market strategically maybe through M&A?
So, the defense business that we're doing right now has hit three areas of the company. At Dearborn and Fryeburg, Maine is the largest segment of it. And there, about 60% of the business is non-oil and gas. And so, I would say 30% of that is defense-related. And those numbers – I mean, I'd have to take a minute to go calculate all that out, but – I mean, when you look at our overall numbers being 8%, let's say, your revenue, you're talking maybe 2% defense then – 2% or 3% of total Hunting revenue when you look at defense.
And then on the gross side – I'm sorry, on the other areas, we have picked up defense business and Electronics and in our US Manufacturing business, the recent ones being with [ph] Textron (00:49:25). But again, it's small numbers today. So, defense, aviation together 60% in Dearborn and then – and that includes the satellite business and then the rest of it has been oil and gas. So, it's small and growing but it's a focus of ours to continue to grow on that business.
Great. Another question from Mark Wilson of Jefferies which relates to the bottom line for 2020 and guidance. Order book is up and consensus shows a 15% year-on-year growth, but where do you see EBITDA trending? And do you think net profit in absolute terms should be expected?
Well, I'm not going to give guidance right now, but you mean our goal is to have, yes, a net profit in whole for the year and for – to massively exceed what we did this year. How I see the year playing out is the first quarter is going to be still relatively flat or comparable to Q4. Part of it is because, as I've mentioned, much of the backlog we're building right now is not short lead time. So, you just don't walk down to the corner store and get 30 feet of titanium tomorrow. So, it takes time to get all of this into the system. I think also the first quarter I'm hoping will be the last quarter that we had severe effects on COVID within the operation of the company because as I had mentioned, January's impact to the bottom line alone was over $1 million, just in excess of inventory, the loss absorption and the likes throughout the company. So, I think this will be an expanding year quarter-by-quarter improvement. And how that comes along and plays with supply chain issues and the like remains to be seen, but I'm extremely optimistic for the year.
We've got a question from Kevin Roger of Kepler. It seems that frac crews are almost sold out in the US. How should we think about the impact for your activity going forward? And is there any bottleneck on the client side?
Well, frac crews available [ph] are (00:51:22) sold out, but I read the last week of somebody just turning back on two more. So, I believe it's the old story, money talks. And as money improves, whether it's Transocean saying they're going to reactivate one of their deepwater rigs from cold stack, the client's calling and asking the units will be reactivated and they'll be there. It all comes down to what are the economics. I do believe that these frac operators are going to be much more disciplined, understanding that we're just not bringing this out for one job. You're going to have to do a long-term contract for us.
So, I think on the frac spread count in the US, one, they're more efficient today, so they are doing more. You can go and look. I've looked at a half a dozen of them in the last month, whether it's EOG or Devon and the like, or even EQT back in Pennsylvania, they all talk about how much faster they're completing these wells than they were two years ago. So, you have the same kind of dynamics, I think, moving forward with the efficiency of the frac spread crews.
But the other upside for us is international. And I think we're going to – we had a – I thought we had a very good year on the international side, and I think we're going to see even faster growth in the international segment for Titan than what you do domestically.
Question from James Thompson of JPMorgan. Could you provide a bit more color on the revenue generation through H2 and what were the key drivers there? And how much of an improvement in top line do you see sequentially in the first half of 2022?
Well, in terms of our H2 numbers, we were 14% higher in H2 2021 compared to the first half of the year. I think, as Jim mentioned there, it's difficult to see through everything together to see how that's going to play out. We are looking at a more tepid growth, I guess, in quarter one for the reasons that Jim just outlined. And in quarter two, once we're through our COVID disruptions on operations, we've got the demand there especially for the short cycle in Titan and we see that improving as well. But there is a lot of uncertainty there as well. But certainly second half 2021 was 14% higher than first half 2021. [indiscernible]
(00:53:33) not going to give numbers. With supply chains issues and the like, all I can tell you is it's going to get better. It should significantly get better. The backlog is speaking to that. The oil price is speaking to that. The industry comments from our clients is speaking to that. Where that hits, whether it hits in May or July or – at this point, it's too much of a moving target to try to put a number and then be held to it.
Okay. And another question from James at JPMorgan. You talk about more orders and more inquiries. Can you add any more color to those comments?
On the inquiry front, keep in mind a lot of what we do is provide capital equipment to operators. So if you look at our Well Intervention business, that's basically a CapEx. And in the last two years, the amount of CapEx spend needed by our big – other big OFS customers was nil. When you have 1,200 rigs and 600 of them are sitting doing nothing, you go steal from Joe's rig to put it on your rig. That happens a lot in downturns. It's not anything extraordinary, and it happened big time in this downturn.
I can tell you specifically in areas like our specialty supply business, had a good month in February. Nice turnaround after a horrible year or so. That's a division of our company that makes replacement parts for MWD equipment, same part of the cycle. It's a business that a couple of years ago generated $10 million in earnings but last year lost $1 million, just to kind of show you the swing. But it's a business that relies on CapEx spend. And so, no different, when you had 1,000 MWD units out there and 500 of them are sitting on the shelf and not being used, you don't go and buy replacement kit. So, that's one anecdotal thing that I can tell you. We're seeing a pickup in that, for example, that one thing there.
We're seeing – actually, I can tell you that the backlog for well intervention equipment in Aberdeen for Q1 almost exceeds the whole revenue for last year, and that's only happened in the last 60 days. So, like I said, we're seeing indications that people have got to start replacing this equipment, and that's driving my optimism for the year going forward.
Okay. We've got no more questions via the webcast. So, does anybody else in the room have any other questions yet? Back to the Mick.
I've got a couple of questions, if I may. Can I just ask about your views on the US OCTG market because, obviously, that market's been dominated by a couple of major seamless plays over the recent years and the HRC prices are collapsing...
Right.
...or have come down. So, at some point, you've got to assume that the domestic mills will start, and I've got to think that that gives you an option for the threading of those pipes for you as that happens. So, what are you seeing on the US market, how do you view it? And, obviously, I appreciate your views.
The US market is – I won't say which mill, but I talk to my competitors in the industry on a regular basis, you deal with the industry things just like I see with the guys from [ph] at Oil States or what – pick, pick one (00:56:35). I can tell you that some of the mills in the US are already completely booked into – well into Q4. And, right now you can't make enough 5.5-inch P110 collapse seamless product for the US marketplace because that – that's the shale wells. And then, there are some changes in the sizes, but all of them are doing well. Tenaris has reactivated their operation in Pennsylvania. So, they're going to start making tubing again. U.S. Steel, they still have not fired up their Lorain operation but their Fairfield, Alabama operation is running full tilt. Other independent mills that we're working with are very, very busy. OCTG prices are very high in the US. They're some of the highest in the world. That's not – it's not going to change this year for sure. So, very buoyant market, strong for steel.
And the new domestic supply reactivating, does that give you an opportunity?
Yeah. I mean, the thing was for a while they're seamlessly – seamless was actually less expensive than ERW. Like you said, the hot rolled coil prices had just gone astronomically through the roof. That is starting to change. So, I think ERW mills will become more efficient in the year – as the year goes on, that will – it might put a lid on pricing but it's not going to reduce it. Because the demand is so strong and that means 5.5-inch for an ERW mill is a sweet spot or 7-inch or [indiscernible] (00:58:06) that they use on these mills – or these wells.
So, we have a certain number of mills that we work with. Some of our competitors' mills have our connections put on them for offshore business. So again, remember it's a distribution market. So, except for Tenaris, which is doing the rig direct model, distributors are out there buying [indiscernible] (00:58:27), buying whatever and that's how we've been able to benefit in the marketplace plus working with some of our independents out there.
Okay. And can I ask about this subsea couplings business?
Yeah.
I think one of the surprises we had last week was one of the subsea tree manufacturers saying we're back to 2020, not 2014/2015 sort of levels on subsea trees...
Yeah.
... [ph] which is about 350 being ordered (00:58:46) this year...
Yeah.
...which is a lot higher. What are you seeing? Because you should see a direct feed-through of that optimism?
No, we will. And that's one of the things that I'm excited about going – that's not a today issue. I mean, they order those trees, you're talking the [indiscernible] (00:59:00) I mean their lead times are way out on that. Our couplings are going to be later in the cycle. But, honestly, when I look at our Subsea business today, there's no business, I'll probably have more optimism about it in general than that is going forward because, again, we have the technology with the proprietary product line. I just am very optimistic. And, yeah, I follow FMC and see what they said. And that will feed directly into our Stafford coupling business.
Okay. Thank you.
We're all done. Great. Well, again, thank you for everybody that's listening. Again, I want to thank the team at Hunting for all the accomplishments that were made in a very, very challenging year. I'm glad COVID is getting behind us. We're all sitting here. By the way, nobody has a mask on, so that's a wonderful thing today.
So, again, stay tuned. I think this is in – if baseball terms, this is probably the second inning of what I think is a long-term game for us, and we're well positioned for, I think, a super year. So, thanks for being here.