Hilong (1623) H1 2024 earnings summary

Executive summary

• Revenue for 1H2024 rose 33.5% year-over-year to RMB2,465.6 million, driven by strong growth in oilfield services and offshore engineering segments.

• Net profit attributable to equity owners from continuing operations increased 70.4% to RMB46.0 million.

• All business segments reported revenue growth, with offshore engineering services showing the highest increase.

• The company focused on high-end markets, digital transformation, and technological innovation, achieving breakthroughs in North America, the Middle East, and Europe.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit for 1H2024 was RMB578.3 million, up 32.7% year-over-year; gross profit margin remained stable at 23.5%.

• Oilfield equipment manufacturing & services contributed RMB1,133 million in revenue (2.1% increase); oilfield services RMB923.5 million (56.9% increase); offshore engineering services RMB410 million (175.6% increase).

• Gearing ratio rose to 40.0% from 37.1% at year-end 2023.

• Current ratio at 116.1%, slightly down from 117% at year-end.

• Inventory turnover days improved to 108 (from 128), while trade receivables turnover days increased to 161 (from 146).

Outlook and guidance

• Management expects continued medium-to-high oil prices and growing global demand for oilfield equipment and services.

• Focus remains on expanding high-end international markets, especially the Middle East, North America, and Southeast Asia, with emphasis on differentiated, high-value drilling tools.

• Offshore engineering is identified as the most promising segment, with plans to pursue high-margin, high-tech turnkey projects and digital transformation.

• Continued development of integrated turnkey oilfield services and expansion into new markets such as Nigeria, Ecuador, and Southeast Asia.

• Plans to deepen partnerships in the Middle East and stabilize business in the Americas.