By Anchal Rana
(Reuters) -British energy services firm Hunting (LON:HTG) Plc beat market expectations after it reported a nearly two-fold increase in annual profit on Thursday, boosted by robust contract wins across a diverse portfolio.
The company posted $103 million in core profit for the year ended Dec. 31, which was higher than its prior forecast of $96 million-$100 million.
Analysts on average had expected it to log about $98.42 million in profit, according to a company-compiled consensus.
Hunting, which counts Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) among its top customers, manufactures components, technology systems and precision parts.
The company has been tapping the non-oil and gas markets, moving past heavy reliance on its largest unit Titan, which makes perforating tools mainly for onshore wells in the U.S.
Onshore activity declined in the United States last year.
"We see the U.S. North American land market being pretty flat. But we see upside in places like India, in our international business in the Middle East, as well as what's going on in South America," said CEO Jim Johnson in a call.
Hunting, which clocked a strong order book for the year, is expected to benefit from further international activity with strong sales in South America as drilling in Guyana and Brazil increases, as per Investec analysts.
Efforts to expand into non-oil and gas energy also paid off as the segment reported a 59% increase in annual revenue, accounting for 8% of the total revenue of $929.1 million.
"The company continues to demonstrate that all of its product groups can contribute to portfolio growth and a route back to 15% EBITDA margins, as it continues to reduce cyclicality and volatility from the business," Investec said in a note.
Core profit margin rose to 11% from 7% in 2022.
Shares of the company were up 3.5% at 1030 GMT to 310 pence.
Hunting retained its 2024 earnings expectations and increased total dividend by 11% to 10 cents per share for 2023.