IN A CHANGING

WORLD

PRECISION

ENGINEERING

Hunting PLC

Annual Report and Accounts 2023

We are Hunting

Hunting is a global precision engineering

group, which provides quality-assured

products and services for the energy,

aviation, commercial space, defence,

medical and power generation sectors.

Financial highlights

Revenue

$929.1m

(2022 – $725.8m)

EBITDA*

$103.0m

(2022 – $52.0m)

Sales order book

$565.2m

(2022 – $473.0m)

*Non-GAAP Measure see NGM C on page 239

Non-nancial highlights

Internal manufacturing reject rate

0.20%

(2022 – 0.13%)

Scope 1 and 2 GHG emissions in tonnes CO

24,042

(2022 – 22,422)

Total recordable incident rate

0.91

(2022 – 0.97)

Market highlights

Average WTI crude oil price

$78bbl

(2022 – $94bbl)

Global capital investment

$212.5bn

(2022 – $190.6bn)

Global average rig count

1,767

(2022 – 1,706)

Highlights

Our Board’s experience extends from energy,

to aviation and other non-oil and gas sectors.

Hunting expects to accelerate the Group’s

non-oil and gas offering in the coming years

todiversify our revenue and prot streams,

thereby reducing the cyclicality of our earnings.

Our ve key product lines are:

Perforating Systems; OCTG; Advanced

Manufacturing; Subsea; and Other

Manufacturing.

Non-oil and gas revenue is derived across all of

these key product lines.

Our strategy is aimed at creating, distributing

and sustaining value for our shareholders and

stakeholders, including employees, customers,

suppliers, governments and communities.

The Group is managed on a geographic basis,

through ve operating segments:

Hunting Titan; North America; Subsea

Technologies; Europe, Middle East and Africa;

and Asia Pacic.

50 10940

Hunting is a premium-listed Company, quoted

on the London Stock Exchange and is a

constituent of the FTSE 250 Index. Our strategy

is to manufacture products and deliver services

to our customers, wherever inthe world they

are operating.

Our Strategy

Our primary sector of focus is the energy

industry. Many of Hunting’s products extend

across the life cycle ofan oil and gas well in

addition to geothermal and carbon capture

wells. Our performance is, therefore, driven

by high-value, resilient end-markets.

Key Performance Indicators Our Stakeholders

Our Operating Segments Corporate GovernanceOur Product Groups

Contents

Strategic Report

At a Glance 2

Hunting 2030 Strategy 6

Key Performance Indicators 12

Company Chair’s Statement 14

Hunting 150 Years 16

Chief Executive’s Report 18

Market Summary 24

Business Model 28

Product Review 40

Operating Segment Review 50

Group Financial Review 55

ESG and Sustainability 62

TCFD 82

Risk Management 96

Viability Statement 106

Going Concern 107

S172(1) Statement 108

Corporate Governance

Introduction to Corporate Governance 110

Board of Directors and Company Secretary 112

Executive Committee 114

Corporate Governance Report 115

Nomination Committee Report 126

Ethics and Sustainability Committee Report 128

Remuneration Committee Report 131

– Remuneration at a Glance 135

– Directors’ Remuneration Policy 137

– Annual Report on Remuneration 146

Audit Committee Report 155

Directors’ Report 160

Financial Statements

Independent Auditor’s Report to

the Members of Hunting PLC 164

Consolidated Income Statement 174

Consolidated Statement of

Comprehensive Income 175

Consolidated Balance Sheet 176

Consolidated Statement of Changes in Equity 177

Consolidated Statement of Cash Flows 178

Notes to the Consolidated Financial Statements 179

Company Balance Sheet 228

Company Statement of Changes in Equity 229

Company Statement of Cash Flows 230

Notes to the Company Financial Statements 231

Other Information

Non-GAAP Measures 239

Financial Record 245

Shareholder and Statutory Information 246

Glossary 248

Professional Advisers 252

Hunting PLC Annual Report and Accounts 2023 1Strategic Report Corporate Governance Financial Statements Other Information

Product groups

Perforating Systems

OCTG

Advanced Manufacturing

Subsea

Other Manufacturing

Perforating

Systems

Subsea

Other

Manufacturing

OCTG

Advanced

Manufacturing

Product groups

In 2023, the Group reported impressive growth in revenue and EBITDA

across most product lines. Perforating Systems revenue has been

comparable with 2022 as international sales offset the subdued US

onshore drilling market. OCTG sales have increased across all regions

of operation as global oil and gas activity accelerated in the year.

Revenue within Advanced Manufacturing made good progress as

oil and gas and non-energy related revenue were pursued, while

sales of Subsea products have accelerated as offshore activity

increased momentum.

At a Glance

Revenue

112.1

243.8

395.8

98.6

78.8

EBITDA*

10.7

25.1

46.7

13.7

6.8

* Non-GAAP measure see NGM C

Hunting PLC Annual Report and Accounts 2023 2Strategic Report Corporate Governance Financial Statements Other Information

Other Manufacturing

Hunting’s Other Manufacturing

products include well intervention

and testing equipment, which is

either sold to, or rented by, clients.

The Group’s trenchless technologies

business sells into the global

telecommunications industry

and forms part of this product

group given its size and prole.

The organic oil recovery (“OOR”)

process is an enhanced oil recovery

technology that increases oil

production in a well, with the CO

cost per barrel being very low

compared to drilling, completing

and bringing a new well online.

Reported through:

North America

EMEA

Asia Pacic

READ MORE ON PAGE 44

At a Glance continued

Hunting PLC Annual Report and Accounts 2023 3Strategic Report Corporate Governance Financial Statements Other Information

Operating segments

Hunting Titan

North America

Subsea Technologies

EMEA

Asia Pacic

Operating segments

The Hunting Titan operating segment has faced headwinds in the year

as the US onshore rig count reduced. However, international sales

have increased by 34% in the year in-line with its strategy for growth.

The Group’s North America operating segment has reported strong

growth as global activity, particularly in South America, increased.

Hunting’s Subsea Technologies operating segment has also reported

strong growth in the year, as demand for hydraulic valves and

couplings and titanium stress joints accelerated. Across the EMEA

operating segment, Europe has been supported by international work

for Brazil, while well intervention sales into the Middle East have grown

due to new investment in the region. The Group’s Asia Pacic

operating segment has seen strong growth, particularly in China and

the Middle East. In the year, the segment also opened a new facility

in India, with Hunting’s JV partner Jindal SAW.

At a Glance continued

Hunting Titan

Operating sites

(2022 – 5)

Distribution centres

(2022 – 12)

Year-end employees

622

(2022 – 656)

North America

Operating sites

(2022 – 10)

Distribution centres

(2022 – 2)

Year-end employees

900

(2022 – 818)

Subsea Technologies

Operating sites

(2022 – 3)

Distribution centres

(2022 – 0)

Year-end employees

196

(2022 – 155)

Europe, Middle East and Africa (“EMEA”)

Operating sites

(2022 – 7)

Distribution centres

(2022 – 0)

Year-end employees

270

(2022 – 247)

Asia Pacic

Operating sites

(2022 – 3)

Distribution centres

(2022 – 0)

Year-end employees

346

(2022 – 309)

Revenue

98.6

250.2

339.3

86.7

154.3

EBITDA*

13.7

21.9

54.2

1.7

11.5

* Non-GAAP measure see NGM C

Hunting PLC Annual Report and Accounts 2023 4Strategic Report Corporate Governance Financial Statements Other Information

Hunting global locations

Hunting Titan

North America

Subsea Technologies

EMEA

Asia Pacic

Joint Ventures and Associates

27 16 2,420

Operating sites Year-end employees (including head ofce)Distribution centres

At a Glance continued

Hunting PLC Annual Report and Accounts 2023 5Strategic Report Corporate Governance Financial Statements Other Information

During the year, the Directors and senior leadership team launched a

resilient, long-term strategy, which is aimed at delivering revenue and

prot growth, free cash ow generation and sustained returns to 2030,

while reducing the cyclicality of the business and lowering carbon

emissions. The strategy, which is underpinned by four strategic pillars,

will be delivered through Hunting’s current portfolio of businesses as

well as through targeted bolt-on acquisitions.

Jim Johnson

Chief Executive

Hunting

FIND OUT MORE ON HUNTING 2030

2030

Hunting 2030 Strategy

Hunting PLC Annual Report and Accounts 2023 6Strategic Report Corporate Governance Financial Statements Other Information

Hunting 2030 Strategy

Hunting has dened four strategic

pillars to deliver growth in the

long term:

Operational excellence –

by delivering strongly assured

products and premium services.

Strong returns – leveraging our

technology to increase pricing

and improve facility utilisation.

ESG and sustainability –

managing and reducing our

carbon footprint and impact

on global climate change.

Growth – through entering

new markets and developing

new products.

Hunting 2030 Strategy continued

ESG and

sustainability

High standards of integrity

and creating long-lasting

relationships

READ MORE ON PAGE 8

Hunting PLC Annual Report and Accounts 2023 7Strategic Report Corporate Governance Financial Statements Other Information

Hunting 2030 Strategy continued

Operational excellence

Our people are at the heart of our business, and we ensure that

their health, safety and well-being are a priority. We mainly operate

in a competitive and cyclical sector, which is high prole and well

regulated. To be successful, we must deliver reliable products,

which are quality-assured to the highest industry standards, offer

improved cost efciencies, and assist safer processes for our

customers. We strive to ensure that our working capital is

managed efciently to enable timely delivery of our products

to our customers.

Strong returns

In normal phases of the oil and gas cycle, our business has

the capability to produce high levels of protability, strong cash

generation and solid returns on capital leading to growing

dividends to shareholders. To reduce the impact of oil and gas

cyclicality on protability, the Group is targeting opportunities in

the energy transition sector and also to grow its revenue from the

commercial space, defence, medical and power generation sectors.

There has also been a programme to reduce the xed cost base

of the Group to ensure that it is more efcient.

ESG and sustainability

We are committed to acting with high standards of integrity and

creating positive, long-lasting relationships with our customers,

suppliers, employees and the wider communities in which

we operate.

Growth

Our aim is to continue to develop our global presence and

supply a comprehensive range of products used in the

wellbore and through expansion into complementary non-oil

and gas sectors. Our diversied portfolio of products, which

are offered in strategic global locations, will enable us to

produce high levels of protability and free cash ow. Our

cash generation will facilitate our growth through investment

in our existing businesses and through acquisition.

Related KPIs

Working capital to annualised revenue ratio; total recordable

incident rate; and internal manufacturing reject rate.

Related KPIs

Revenue; non-oil and gas revenue; EBITDA; adjusted prot before

tax; adjusted diluted earnings per share; dividend per share

declared; total shareholder return; free cash ow; working capital

to annualised revenue ratio; and return on average capital

employed (“ROCE”).

Related KPIs

Total recordable incident rate; internal manufacturing reject rate;

total scope 1 and 2 emissions; CO

intensity factor; total

purchased electricity; and renewable energy purchased.

Related KPIs

Revenue; non-oil and gas revenue; EBITDA; adjusted prot

before tax; adjusted diluted earnings per share; total

shareholder return; and free cash ow.

Related risks

Increased competition and market consolidation; geopolitical

instability; adverse movement in commodity prices; climate

change and energy transition; cyber security; loss of key

executives or staff and shortage of key staff; work environment

issues including health and safety; product quality and reliability;

our reaction to external and internal forces; third-party risk; and

changing global rules and regulations.

Related risks

Geopolitical instability; loss of key executives or staff and shortage

of key staff; product quality and reliability; our reaction to external

and internal forces; third-party risk; acquisition risk; and changing

global rules and regulations.

Related risks

Geopolitical instability; climate change and energy transition;

loss of key executives or staff and shortage of key staff; work

environment issues including health and safety; and changing

global rules and regulations.

Related risks

Increased competition and market consolidation; geopolitical

instability; adverse movement in commodity prices; climate

change and energy transition; loss of key executives or staff

and shortage of key staff; product quality and reliability; our

reaction to external and internal forces; third-party risk;

acquisition risk; and changing global rules and regulations.

Progress in the year

The Group continued to deliver new technology to clients in the

year, such as the H-4 Perforating System™. As activity increased

across all of the Group’s businesses, our facility utilisation

improved, without compromising on our quality assurance and

health, safety and environmental performance. We have continued

to rollout the D365 ERP system throughout our businesses, which

will contribute to the enhanced monitoring of production and

performance over time and the delivery of efciencies. We have

also increased our training programmes including a new Code of

Conduct, cyber security and anti-harassment modules, alongside

our rigorous quality assurance and health and safety programmes.

Progress in the year

The Group has delivered a signicant increase to EBITDA and

operating prot margins and increased its ROCE. This has been

achieved by the increase in revenue and prots as well as through

improved efciencies while retaining a strong balance sheet

throughout the year. As part of a wider programme to drive higher

operational efcacies and reduce future cash outows, the closure

of the Oklahoma City manufacturing facility and the relocation of

the well testing manufacturing and assembly operations from the

Netherlands to Dubai were announced, together with the sale of

legacy E&P assets. The strong returns generated in the year have

enabled the Board to announce an 11% increase to the total

dividends declared in the year.

Progress in the year

In the year, we completed a process to independently assure

our scope 1 and 2 greenhouse gas emissions. Further, the

Group commenced a process to assess its scope 3 inventories,

which will enable the Directors to develop a Net Zero transition

plan. In the year, further progress was also made on the rolling

out of carbon mitigation strategies, and despite an increase

in the Group’s orders and manufacturing, carbon emissions

haven’t increased at the same rate as measured by our CO

intensity factor.

Progress in the year

During 2023, the Group delivered further revenue increases

as global oil and gas drilling activity accelerated. Growth in

regions outside of North America has been a key theme in

the year, with activity in South America and the Middle East

as well as Asia Pacic accelerating. In September 2023,

Hunting opened its joint venture premium threading facility

in Nashik, India, which is targeted at capturing growth in

the country. In the year, our Subsea and OCTG accessories

businesses have reported considerable progress as

deepwater and ultra-deepwater drilling accelerated.

Hunting’s strategic pillars

Hunting PLC Annual Report and Accounts 2023 8Strategic Report Corporate Governance Financial Statements Other Information

Hunting 2030 Strategy continued

Retain focus on global oil and gas opportunities,

specically growing our subsea and offshore businesses

Crude oil and natural gas are forecast to be two critical primary

energy sources for many decades to come. As developed and

emerging economies seek growth and energy security,

hydrocarbon resources will remain part of the energy landscape

alongside other renewable and low carbon energy sources. The

Group will continue to broaden its product offering and introduce

critical technologies through R&D and targeted M&A. We are

targeting revenue of c.$1.5 billion p.a. by 2030 from the oil

and gas sector.

The subsea and offshore sectors of the global oil and gas industry

provide predictable and sustained hydrocarbon production, which

has increased in importance for project developers in recent years.

Through organic and acquisitive growth, Hunting is seeking

to build its revenue prole from this area of the industry by

the end of the decade as part of the annual revenue target

of $1.5 billion.

Develop a global position in the energy transition sector

The energy transition sector is an area of signicant opportunity for

Hunting, as global efforts to decarbonise the energy supply chain

accelerate. The Group sees strong growth in supplying products

for geothermal as well as carbon capture and storage projects,

which are increasingly demanding high performance technology

and materials that are capable of delivering multi-decade benets

to the energy industry. The Group will leverage its global

presence and align its technology portfolio and supply

chain with the high-growth energy transition market and

is condent that these projects will deliver c.$250 million

revenue p.a. by 2030.

Increase our position in high-value, non-oil and gas

industries

Given the cyclicality of the oil and gas industry, a key part of

our strategy is to build a less volatile revenue and prot prole.

This will be delivered through organic and acquisitive growth of

non-oil and gas businesses. We already sell into some of these

markets, such as the aviation, commercial space, defence, medical,

and power generation sectors, and will continue to leverage our

world-class precision engineering and manufacturing know-how

into these high-quality markets and industries. We are targeting

c.$250 million revenue p.a. to originate from non-oil and

gas sources by 2030.

Increased focus on the long-term sustainability of the Group

The training, development and retention of our skilled employees

will ensure that our strong culture remains intact and Hunting’s

robust health and safety record is maintained. The Group will

continue to focus on reducing its carbon emissions through

operational effectiveness and drive efciencies through continuous

improvement. We are targeting a reduction in our scope 1

and 2 greenhouse gas emissions by 50% from our 2019

base-line year and to purchase 50% of our energy from

renewable sources by the end of the decade.

Operational excellence

Our people are at the heart of our business, and we ensure that

their health, safety and well-being are a priority. We mainly operate

in a competitive and cyclical sector, which is high prole and well

regulated. To be successful, we must deliver reliable products,

which are quality-assured to the highest industry standards, offer

improved cost efciencies, and assist safer processes for our

customers. We strive to ensure that our working capital is

managed efciently to enable timely delivery of our products

to our customers.

Strong returns

In normal phases of the oil and gas cycle, our business has

the capability to produce high levels of protability, strong cash

generation and solid returns on capital leading to growing

dividends to shareholders. To reduce the impact of oil and gas

cyclicality on protability, the Group is targeting opportunities in

the energy transition sector and also to grow its revenue from the

commercial space, defence, medical and power generation sectors.

There has also been a programme to reduce the xed cost base

of the Group to ensure that it is more efcient.

ESG and sustainability

We are committed to acting with high standards of integrity and

creating positive, long-lasting relationships with our customers,

suppliers, employees and the wider communities in which

we operate.

Growth

Our aim is to continue to develop our global presence and

supply a comprehensive range of products used in the

wellbore and through expansion into complementary non-oil

and gas sectors. Our diversied portfolio of products, which

are offered in strategic global locations, will enable us to

produce high levels of protability and free cash ow. Our

cash generation will facilitate our growth through investment

in our existing businesses and through acquisition.

Related KPIs

Working capital to annualised revenue ratio; total recordable

incident rate; and internal manufacturing reject rate.

Related KPIs

Revenue; non-oil and gas revenue; EBITDA; adjusted prot before

tax; adjusted diluted earnings per share; dividend per share

declared; total shareholder return; free cash ow; working capital

to annualised revenue ratio; and return on average capital

employed (“ROCE”).

Related KPIs

Total recordable incident rate; internal manufacturing reject rate;

total scope 1 and 2 emissions; CO

intensity factor; total

purchased electricity; and renewable energy purchased.

Related KPIs

Revenue; non-oil and gas revenue; EBITDA; adjusted prot

before tax; adjusted diluted earnings per share; total

shareholder return; and free cash ow.

Related risks

Increased competition and market consolidation; geopolitical

instability; adverse movement in commodity prices; climate

change and energy transition; cyber security; loss of key

executives or staff and shortage of key staff; work environment

issues including health and safety; product quality and reliability;

our reaction to external and internal forces; third-party risk; and

changing global rules and regulations.

Related risks

Geopolitical instability; loss of key executives or staff and shortage

of key staff; product quality and reliability; our reaction to external

and internal forces; third-party risk; acquisition risk; and changing

global rules and regulations.

Related risks

Geopolitical instability; climate change and energy transition;

loss of key executives or staff and shortage of key staff; work

environment issues including health and safety; and changing

global rules and regulations.

Related risks

Increased competition and market consolidation; geopolitical

instability; adverse movement in commodity prices; climate

change and energy transition; loss of key executives or staff

and shortage of key staff; product quality and reliability; our

reaction to external and internal forces; third-party risk;

acquisition risk; and changing global rules and regulations.

Progress in the year

The Group continued to deliver new technology to clients in the

year, such as the H-4 Perforating System™. As activity increased

across all of the Group’s businesses, our facility utilisation

improved, without compromising on our quality assurance and

health, safety and environmental performance. We have continued

to rollout the D365 ERP system throughout our businesses, which

will contribute to the enhanced monitoring of production and

performance over time and the delivery of efciencies. We have

also increased our training programmes including a new Code of

Conduct, cyber security and anti-harassment modules, alongside

our rigorous quality assurance and health and safety programmes.

Progress in the year

The Group has delivered a signicant increase to EBITDA and

operating prot margins and increased its ROCE. This has been

achieved by the increase in revenue and prots as well as through

improved efciencies while retaining a strong balance sheet

throughout the year. As part of a wider programme to drive higher

operational efcacies and reduce future cash outows, the closure

of the Oklahoma City manufacturing facility and the relocation of

the well testing manufacturing and assembly operations from the

Netherlands to Dubai were announced, together with the sale of

legacy E&P assets. The strong returns generated in the year have

enabled the Board to announce an 11% increase to the total

dividends declared in the year.

Progress in the year

In the year, we completed a process to independently assure

our scope 1 and 2 greenhouse gas emissions. Further, the

Group commenced a process to assess its scope 3 inventories,

which will enable the Directors to develop a Net Zero transition

plan. In the year, further progress was also made on the rolling

out of carbon mitigation strategies, and despite an increase

in the Group’s orders and manufacturing, carbon emissions

haven’t increased at the same rate as measured by our CO

intensity factor.

Progress in the year

During 2023, the Group delivered further revenue increases

as global oil and gas drilling activity accelerated. Growth in

regions outside of North America has been a key theme in

the year, with activity in South America and the Middle East

as well as Asia Pacic accelerating. In September 2023,

Hunting opened its joint venture premium threading facility

in Nashik, India, which is targeted at capturing growth in

the country. In the year, our Subsea and OCTG accessories

businesses have reported considerable progress as

deepwater and ultra-deepwater drilling accelerated.

Underpinned by our portfolio of businesses and targeted bolt-on acquisitions

Hunting 2030 operational growth objectives

Hunting PLC Annual Report and Accounts 2023 9Strategic Report Corporate Governance Financial Statements Other Information

Investment proposition

Hunting PLC’s investment case is

based on technology, engineering

core competencies and a deep

knowledge of the global energy

industry. This expertise will drive

long-term growth and leverage

opportunities into new sectors

that value these principles.

READ MORE ON PAGE 11

Hunting 2030 Strategy continued

We are targeting c.$2.0 billion of annualrevenue by 2030

Based on our operational growth strategy, which is supported by

strong market fundamentals and independent market commentary

that point to sustained demand for oil and gas and committed

industry capex, the Group has set a 2030 revenue goal of

c.$2.0 billion p.a., comprising 75% sourced from oil and gas

and 25% from non-oil and gas sectors, including the energy

transition sector.

Increase our EBITDA margin to 15% or greater

Our focus on delivering technology that attracts high margins,

coupled with a strong focus on containing costs whilst maximising

the output from our current operating footprint will be the key

drivers to meet the EBITDA margin target of 14%-16% by 2025

and exceed this target by 2030.

Deliver ROCE of 15% or greater

The Group is focused on retaining a strong balance sheet and

maximising its return on capital employed through careful

management of its working capital, with a working capital to

annualised revenue ratio of c.35% targeted, to deliver superior

returns compared to our peers. To achieve this, long-term working

capital targets of 130 days for inventory, 75 days for receivables

and 45 days for payables have been set.

Generate c.$750 million of cumulative free cash ow

With increased revenue and margins, supported by stringent

management of our balance sheet, we are targeting an EBITDA

to free cash ow conversion rate of 50% and aiming to deliver

c.$750 million of cumulative free cash ow through to the end

of the decade. This target is on a post-capex basis.

Increase dividend distributions by a minimum of 10% per

annum to 2030

We are seeking to return cash to shareholders, primarily through

dividend distributions, with the Board targeting a steady increase

to 2030 of 10% p.a.

Net leverage of less than 1.5x EBITDA through the period

to 2030

By maintaining a strong balance sheet, liquidity and a prudent

approach to debt, a long-term net leverage of 1.5x EBITDA

is targeted.

Hunting 2030 nancial and investment returns objectives

Underpinned by our portfolio of businesses and targeted bolt-on acquisitions

Hunting PLC Annual Report and Accounts 2023 10Strategic Report Corporate Governance Financial Statements Other Information

Hunting 2030 Strategy continued

Our strategic differentiators

position us strongly

Diversied portfolio

Hunting has a diversied portfolio of market

leading technologies, products and services

that address many areas of the energy and

non-oil and gas supply chain. The Group

holds over 500 patents and trademarks

across key technologies and geographies.

Efciency

Our precision-engineered products are highly

reliable and assist in higher safety protocols

and more efcient procedures for our

customers, wherever they are deployed.

Commercial agility

Hunting is able to leverage its world-class

engineering and manufacturing capabilities

into the energy transition sector and also into

high quality non-oil and gas markets and

industries through its global presence. Our

commercial agility within the markets we

serve helps us to remain a technology leader,

often with a strong market share.

Our ESG principles

Hunting has a strong culture based on its

highly skilled and trained workforce, resulting

in strong quality-assured products and a

robust HSE record. Our ESG principles help

us drive growth and internal efciencies,

increase safety for both our workforce and

that of our customers, and lower carbon

emissions through operational effectiveness

and technological innovation.

Our sectors of

focus are resilient

Oil and gas

The global energy industry, particularly oil and

gas, is a long-term driver of economic growth.

This is likely to be the case for many years

to come.

Energy transition

Energy transition opportunities are

complementary to our core oil and gas

markets, which is a further area of long-term

growth for the Group.

Other non-oil and gas

Aviation, commercial space, defence,

medical, and power generation sectors have

long-term growth prospects. These are

resilient markets that support economic

prosperity and use our precision engineering

expertise, which will reduce cyclicality in

our earnings.

Our nancial returns

are gaining momentum

Strong growth prole

Hunting has increased its revenue, prots

and cash ows as market conditions have

improved across the year.

Improved margins

Stronger pricing and higher facility utilisation

levels have enhanced operating margins

and earnings, which have led to increased

cash ows.

Improved earnings

Increased earnings have led to higher

shareholder and capital returns in the form

of dividend distributions and capital growth.

Cash generation

Consistently turning prot into free cash

ow – as demonstrated during Q4 2023.

Strong balance sheet

• Improving balance sheet efciency;

• Financial stability; and

• Asset Based Lending facility provides liquidity.

Progressive nancial returns

• Revenue and prot growth;

• Fixed cost reduction strategy, delivering

a more efcient business platform;

• Increasing EBITDA to free cash ow

conversion; and

• Dividend growth.

Our core competencies

Leadership in:

• Systems, design and precision engineering;

• Bespoke manufacturing; and

• Metallurgy and materials.

Investing in our people to provide:

• Innovation and a competitive edge,

protected through patents and trademarks;

• Engineering and technical leadership to

attract blue chip customers from multiple

end-markets; and

• A premium service culture.

Global operating presence in key

locations and exposure to high-growth

markets with strong controls over:

• Quality assurance;

• Health and safety; and

• Carbon emissions.

Strong, experienced management

team to:

• Pursue growth across complex and

competitive sectors;

• Diversify revenue to ensure long-term

resilience;

• Navigate through market cycles; and

• Ensure M&A targets are aligned with our

long-term strategy.

Hunting PLC Annual Report and Accounts 2023 11Strategic Report Corporate Governance Financial Statements Other Information

Financial

Key Performance Indicators

Revenue

2023

2022

2021

725.8

521.6

929.1

Revenue is earned from products and services

sold to customers from the Group’s principal

activities (see notes 2 and 3).

Dividend per share declared*

cents

2023

2022

2021

9.0

8.0

10.0

The amount in cents returned to Ordinary

shareholders in relation to the nancial year

(see NGM Q).

Sales order book

2023

2022

2021

473.0

211.5

565.2

The sales order book comprises the value of all

unsatised orders from customers and is expected

to be recognised as revenue in future periods.

The sales order book represents the aggregate

amount of the transaction price allocated to partially

or fully unsatised performance obligations, as

dened in IFRS 15 (see note 23).

Total cash and bank*

2023

2022

2021

24.5

114.2

(0.8)

Total cash and bank comprises cash at bank and

in hand, xed-term funds, money market funds

and short-term deposits less bank overdrafts and

bank borrowings (see NGM K).

Free cash ow*

2023

2022

2021

(60.4)

45.1

(0.5)

All cash ows before transactions with

shareholders and investments by way of

acquisition (see NGM P).

Adjusted diluted earnings (loss) per share*

cents

2023

2022

2021

4.7

(27.1)

20.3

Adjusted earnings (loss) attributable to Ordinary

shareholders, divided by the weighted average

number of Ordinary shares in issue during the

year adjusted for all potentially dilutive Ordinary

shares (NGM B).

Non-oil and gas revenue

2023

2022

2021

47.6

37.6

75.9

Revenue earned from products and services sold

to customers in non-oil and gas sectors

(see note 2).

EBITDA*

2023

2022

2021

52.0

3.1

103.0

Adjusted results before share of associates’ and

joint ventures results, interest, tax, depreciation,

impairment and amortisation (see NGM C).

Adjusted prot before tax*

2023

2022

2021

10.2

(40.6)

50.0

Prot before tax excluding adjusting items

(see NGM B).

Working capital to annualised revenue ratio*

2023

2022

2021

Working capital as a percentage of annualised

revenue (see NGM E).

Total shareholder return*

2023

2022

2021

102

(22)

(9)

Total shareholder return is a measure of the

Company’s performance over time. It factors in

share price appreciation and dividends paid to

show the total return to the shareholder

expressed as an annualised percentage.

Return on average capital employed*

2023

2022

2021

(4)

Adjusted prot before interest and tax, amended

to include the share of associates’ and joint

ventures’ results, as a percentage of average

gross capital employed (see NGM S).

* Non-GAAP measure (“NGM”) see pages 239 to 244

Hunting PLC Annual Report and Accounts 2023 12Strategic Report Corporate Governance Financial Statements Other Information

Non-nancial

Global onshore capital investment

$bn

2023

2022

2021

137.1

96.4

144.2

The estimated onshore / land-based drilling and

production expenditures of the industry as

reported by Spears & Associates in their

December 2023 Drilling and Production Outlook.

Global offshore capital investment

$bn

2023

2022

2021

53.5

41.8

68.3

The estimated offshore drilling and production

expenditures of the industry as reported by

Spears & Associates in their December 2023

Drilling and Production Outlook.

Global onshore average rig count

2023

2022

2021

1,517

1,158

1,560

The average onshore global rig count during

2023 as reported by Baker Hughes Inc.

Average WTI crude oil price

$ per barrel

2023

2022

2021

The average price recorded in the year for West

Texas Intermediary crude oil.

Global offshore average rig count

2023

2022

2021

189

165

207

The average offshore global rig count during

2023 as reported by Baker Hughes Inc.

Average Henry Hub natural gas price

$ per mmBtu

2023

2022

2021

6.54

3.72

2.66

The average price recorded in the year for Henry

Hub natural gas.

Market Indicators

Key Performance Indicators continued

Total recordable incident rate (OSHA method)

2023

2022

2021

0.97

0.99

0.91

The US Occupational Safety and Health

Administration (“OSHA”) incident rate is calculated

by multiplying the number of recordable incidents

by 200,000 and then dividing that number for the

number of labour hours worked.

Internal manufacturing reject rate

2023

2022

2021

0.13

0.20

Percentage of parts rejected during the

manufacturing process.

e intensity factor

2023

2022

2021

30.9

36.2

25.9

e intensity factor is dened as kilogrammes

of scope 1 and 2 greenhouse gas

emissions, divided by $’000 of revenue.

Total purchased electricity

GWh

2023

2022

2021

43.4

40.5

49.4

The Group’s total electricity purchased during the

year.

Renewable electricity purchased

GWh

2023

2022

2021

8.7

6.5

11.4

The Group’s electricity purchased from

renewable or sustainable sources during the

year.

Total scope 1 and 2 CO

e emissions

tonnes

2023

2022

2021

22,422

18,859

24,042

Scope 1 and 2 carbon dioxide emissions in

tonnes, reported in-line with the Greenhouse Gas

Protocol, published by the World Resources

Institute.

Hunting PLC Annual Report and Accounts 2023 13Strategic Report Corporate Governance Financial Statements Other Information

Company Chair’s Statement

Hunting hosted a very successful Capital Markets

Day at the London Stock Exchange in September,

which was well received by all our stakeholders.

On the governance front, our board succession

plan, developed over the past three years,

continued to be implemented in a thoughtful,

orderly fashion.

Hunting 150 years

The Company will be celebrating its 150th

anniversary during 2024. This is a great milestone,

reecting the adaptability, culture and resilience

of the business. As Hunting looks forward, I am

convinced that these pillars position the Company

strongly for the future.

Market backdrop

During the year, the macro-economic

background for energy markets continued to

improve overall. There is growing recognition that

the transition to lower emission energy sources

requires low-cost, innovative technologies, which

are starting to be introduced. However, oil and

gas will continue to play a vital role in the energy

mix for many decades to come.

Furthermore, geopolitical events during the

past couple of years have demonstrated the

importance of energy security and energy

resilience. The refocus on offshore projects that

drove higher demand for both Hunting’s OCTG

and Subsea products, reects improved

condence in the longer-term demand for oil

and gas to power the global economy.

The past year was an eventful one in the life of the Company. We saw

continued growth in our core energy markets, with particular strength

in the offshore and international segments of the global oil and gas

sector, coupled with a slight slowdown in the North American onshore

activity during the second half of the year.

These projects are capital intensive, with lead

times of more than ve years between project

launch and rst production, but they offer

signicantly higher volumes and more stable

eld production levels than would be typical

of an unconventional, onshore well.

Most forecasters agree that offshore and

international markets will continue to strengthen

in the coming years, while onshore North

America will also remain a growth area, but at

a slightly slower pace. As noted in last year’s

report, we believe we are still in the early stages

of a multi-year upcycle for the energy sector.

Financial performance

With continued market strengthening, coupled

with Hunting’s focus on quality and productivity

improvements, Hunting has delivered a strong

increase in revenue and protability in the year.

Revenue grew 28% from $725.8m in 2022

to $929.1m in 2023. This increased volume

improved utilisation of xed assets. Supply chain

issues that developed during the pandemic were

largely resolved. Importantly, Hunting’s technology,

product quality, and service support provided a

solid competitive edge as our customers recognised

the higher value of our products and services.

Hunting also saw its strategy to develop its

adjacent, non-oil and gas markets rewarded

during the year. Non-oil and gas revenue grew

strongly year-on-year to $75.9m (2022 – $47.6m),

with the percentage of our total sales increasing

from 7% in 2022 to 8% in 2023.

Hunting PLC Annual Report and Accounts 2023 14Strategic Report Corporate Governance Financial Statements Other Information

The organisational focus on these sectors, set

out in the Capital Markets Day, should ensure a

sharp focus, which will facilitate ongoing growth.

We will closely monitor national policy decisions,

such as the Ination Reduction Act in the US, that

will underwrite large capital outlays in support of

decarbonisation efforts around the globe.

EBITDA nearly doubled in the year from $52.0m

in 2022 to $103.0m in 2023. With the increase

in utilisation across the Group, better pricing

secured on certain products, along with

broad-based improvements to operating

efciencies, our EBITDA margin increased to

11% from 7% in the prior year.

The Group’s adjusted prot before tax,

therefore, increased from a prot of $10.2m

to $50.0m, and on this basis the Board is

recommending a Final Dividend of 5.0 cents

per share (2022 – 4.5 cents), which takes total

declared dividends to 10.0 cents per share for

the year (2022 – 9.0 cents), or an 11% increase.

In 2023 the statutory prot before tax was $50.0m,

compared to a loss before tax of $2.4m in the

prior year, which in 2022 included adjusting items

for impairments and legal fees totalling $12.6m.

Hunting 2030 Strategy

During the year, a great deal of time and effort

was invested in the Company’s maiden Capital

Markets Day, but the return on that investment

will pay dividends well into the future. The event

showcased the scope of our international

operations, the breadth of our product and

technology portfolio, and our international

management team. It provided an opportunity

for Hunting to articulate its strategy for growth,

while also laying out performance targets and

the metrics that will track the successful

implementation of that strategy.

Company Chair’s Statement continued

Developing the materials for the Capital Markets

Day involved a signicant effort on the part of our

global management team. Likewise, the Board

participated in several review stages and offered

input on both strategic messaging and key

metrics to drive our investment case. I want to

recognise the hard work of all those involved in

making the day a great success.

Board succession and refreshing

I want to close with a few comments about

governance and stewardship. Three years ago, the

Nomination Committee developed a succession

plan with the help of an external consulting rm.

We began by mapping the talent and expertise

of our existing Directors to the strategic plan that

had been developed with management.

We examined critical gaps that would need to

be addressed in our succession planning. We

also developed a prole for future Directors

that emphasised key market knowledge and

international experience. Hunting’s operations are

global, with facilities in North America, EMEA and

Asia Pacic, led by an international management

team. In addition, knowledge of key markets

(both current and future), M&A experience, and

strategic planning experience, among other

senior executive skills, were judged to be

important. From this, a schedule for Director

succession was established and the Nomination

Committee launched a well-considered search

process. Stuart Brightman joined the Board in

January 2023, as part of this ongoing refreshing,

bringing vital manufacturing and international

experience to the Board prole.

In January 2024, Margaret Amos was appointed

a Director. Margaret brings with her a background

in aerospace from her career at Rolls-Royce, and

her experience with a JV start-up in India, brings

valuable knowledge of adjacent markets and

geographies specic to the future needs of

the Board.

I’m pleased to say that, while the process of

board succession planning is ongoing, at this

juncture, we have added tremendous expertise

and experience to Hunting’s Board.

As long planned, I will be stepping down from

my role as Company Chair at the 2024 Annual

General Meeting in April, having completed my

nine-year term.

It has been a great honour to serve on the

Hunting Board, to work with my fellow Directors,

to assist and challenge a capable management

team and to be part of a dynamic Company.

I leave my role with the knowledge that I will

be succeeded by an even more capable

Company Chair in Stuart Brightman. Stuart’s

strong operational and nancial background,

his years of managing global businesses,

his understanding of the industry and his

governance experience from serving in both

executive and non-executive Director roles,

provide him with the skills and experience to

wisely lead the Board into a very bright future.

I am grateful to shareholders for their support

during my tenure. I am also very grateful to

Richard Hunting, who retired in 2022, for his

steadfast support and friendship in both the

transition and during his time on the Board.

John (Jay) F. Glick

Company Chair

29 February 2024

It has been a great honour to

serve on the Hunting Board,

to work with my fellow

Directors, to assist and

challenge a capable

management team, and to be

part of a dynamic Company.

Revenue

$929.1m

(2022 – $725.8m)

Dividend per share declared

10.0 cents

(2022 – 9.0 cents)

Hunting PLC Annual Report and Accounts 2023 15Strategic Report Corporate Governance Financial Statements Other Information

Hunting 150 Years

150

years of

innovation and

technology

development

Built on a tradition of teamwork and trust, Hunting has undergone

a remarkable evolution since founding father Charles Hunting rst

established a ship owning business in 1874. The success of these

early years fostered a strong philosophy of integrity and personal

trust in an autonomous, devolved management. A ship could be

at sea for up to a year without the convenience of modern

communications, and so honour between the crew and owners

was of prime importance along with mutual respect and shared

responsibility for success.

Dedicated bulk tankers

THE EARLY YEARS

In 1874, Charles Hunting bought two second-

hand sailing ships for his son Charles Samuel.

The Sylvia and Genii were designed for dry bulk

cargo and allowed the family to develop their

vision of owning and transporting oil. The Joseph

Ferens was the rst steamer purchased by the

Company, followed by the SS Dufeld 13 years

later, which was a dedicated oil tanker.

Charles Samuel Hunting

THE BEGINNING

When Charles Samuel Hunting entered the oil

business in the 1890s, he was expanding upon

an already successful, ship-owning rm set up by

his father. A global traveller, he journeyed the

world “to study the oil trade” and in quick pursuit

of exploration, he prospected in Russia and built

a rst batch oil renery on the Thames, invested

in a production venture in Hungary and sought

trading opportunities in the US.

1890

1874

Hunting PLC Annual Report and Accounts 2023 16Strategic Report Corporate Governance Financial Statements Other Information

1970

Hunting 150 Years continued

Facing wartime challenges

FURTHER DIVERSIFICATION

Further diversication came during the Second

World War, with aircraft manufacturing and

aviation support services added to the

Company’s interests. In this time, Hunting’s

businesses faced the risks of international

sea-bound trade due to the challenges presented

by the conict.

Outside capital

CONSOLIDATION

The privately-owned ship management,

shipbroking and oil distribution business merged

with two entities to form a new public company,

Gibson Petroleum. Later in 1978, the Company’s

oil and gas interests were also consolidated into

Hunting Petroleum Services and oated as a

separate entity.

Focus on energy services

A NEW MILLENNIUM

During the 2000s, Hunting transformed again,

divesting its aviation and defence businesses and

focusing on the upstream oil and gas equipment

and services sector. In 2008, the Group divested

its interests in Gibson Energy and in 2011

completed the purchase of Titan Specialties, the

biggest acquisition in the Group’s history.

Leveraging core competencies

A VISION FOR THE FUTURE

The Hunting 2030 Strategy was launched in

September 2023, which will lead the Group into

the energy transition, aviation, commercial space,

defence, medical and power generation sectors,

all built around our culture of technology,

innovation and adaptability. Hunting will continue

to focus on those sectors that value precision

engineered products, no matter what sector.

RE-BUILDING AND

DIVERSIFICATION

By the end of the Great War, the Hunting eet

which had been one of the largest independent

operators, needed to be rebuilt. Charles’ two

sons, Percy and Lindsay, entered the business

and soon took an interest in aviation, which

allowed for some diversication, as well as

entering the US and taking non-operating

interests in a number of oil prospects.

Sir Percy Hunting

A LASTING IMPRESSION

By the middle of the 20th century, Hunting’s

business interests were truly world-wide, with Sir

Percy leaving a leading-edge concern to the next

generation. Pat Hunting took over the leadership

of the business, developing further a reputation

for innovation, technology development and

adaptability in the fast changing post-war world.

One public company

A NEW ERA

Petroleum retailing, lubricants and specialised

products were added to the portfolio and,

increasingly, outside capital was brought in to

fund expansion. By the late 1980s, there were

three public companies, and in 1989, under the

leadership of Clive Hunting, all three companies

were merged to form Hunting PLC, with Richard

Hunting, Clive’s nephew, becoming Executive

Chairman of the combined group.

Research and development

PRECISION ENGINEERING

As the Group approaches its 150th anniversary,

research and development is ongoing to

commercialise the next generation of products

for the global energy sector. With Perforating

Systems, OCTG, Advanced Manufacturing and

Subsea expertise, Hunting is positioned for a

bright future.

1920 1960 1990 2020

1970 2000 20301940

Hunting PLC Annual Report and Accounts 2023 17Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE FROM CHIEF EXECUTIVE,

JIM JOHNSON

Chief Executive’s Report

The Company’s rst Capital Markets Day

(“CMD”) in September 2023 provided the senior

leadership team with an opportunity to launch

our resilient long-term strategy, which is aimed

at delivering growth and strong returns to 2030

in a sustainable and responsible way. Key areas

that were covered included the Company’s

participation in the energy transition, its capital

allocation policy and opportunities for growth.

The CMD enabled Hunting to showcase its

compelling technology and product offering,

which covers many critical areas of the global

energy industry. The Company is also making

good progress in developing energy transition

revenue opportunities, particularly in the

tangential markets of geothermal energy and

carbon capture and storage. Hunting has a

number of readily available technologies and

products to supply this emerging sector including

OCTG, premium connections, accessories,

valves, couplings and subsea components to

support both onshore and offshore projects.

Further, Hunting is driving growth in other non-oil

and gas markets, such as aviation, commercial

space, defence, medical and power generation,

which require quality-assured products,

supported by high-end manufacturing

capabilities. These ambitions will deliver growth

in the performance of the Company, given the

market fundamentals being reported for energy,

as well as in other industries that need our skills.

The year was one of signicant improvement in Hunting’s nancial

results, with the Company delivering a 28% increase in revenue and

a near doubling of EBITDA to $103.0m. These impressive results

have been delivered by Hunting’s differentiated product portfolio

and geographical spread of operations.

Hunting has a diversied product portfolio and

strategically located operations, which have

enabled us to deliver an impressive set of results

for 2023.

Market overview

Taken as a whole, activity levels across the oil

and gas industry increased in 2023 as illustrated

by the year-on-year increase in industry capital

expenditures and average rig counts.

North America land activity was more subdued

than anticipated, with a 21% decline in the US

land rig count year-on-year. Our Perforating

Systems product line was most impacted by this

decline, but still delivered record international

sales, as onshore activity in Argentina, Saudi

Arabia and South East Asia grew.

Despite geopolitical tensions in the Middle East,

activity levels continued to increase following the

exit from the COVID-19 pandemic for many

countries. There has also been a softening in

commodity prices during the year as natural gas

prices receded, with the supply issues driven by

the invasion of Ukraine by Russia in 2022 abating.

In summary, the global industry, while being

volatile in the year, continued to be an engine for

growth particularly in offshore and international

markets, which has driven growth in the Group’s

revenue and protability in the year.

Hunting PLC Annual Report and Accounts 2023 18Strategic Report Corporate Governance Financial Statements Other Information

I am really proud of the hard

work and dedication of the

team during 2023, as their

performance enabled us to

deliver a strong set of results

for the year.

Chief Executive’s Report continued

Operational review

Our global OCTG product line has been a

signicant driver of the Company’s growth and

enhanced protability in the year. Our North

American premium connection business had an

excellent year, as we added new clients and as

our TEC-LOCK

semi-premium connection

reported market growth in key shale basins.

Our OCTG results in Canada have been strong

as our strategic move to work with third-party

threading companies provided an opportunity

to grow protability in-country on lower capital

intensity. Our US Manufacturing accessories

business has performed well this year, with

strong well completion business in Guyana

and Brazil being a key factor in this success.

Increased opportunities from major oileld

service companies continue to provide growth

opportunities in international markets.

This year we have also seen an increase in

activity in our EMEA OCTG businesses, largely

in relation to the Tubacex order for Brazil. This

led to the Netherlands facility being close to full

capacity during the period as this order was

progressed, with our Aberdeen facilities also

providing support to this contract. The OCTG

facility in the Netherlands also completed a

number of orders for geothermal applications in

the year as projects accelerated across Europe.

Our Asia Pacic OCTG businesses have enjoyed

a signicant improvement year-on-year, driven

by large orders in China and India, and an uptick

in Middle East activity. Momentum in the Asia

Pacic region continues to be strong.

Improvements continue in the performance of

our Advanced Manufacturing group, driven by

increased opportunities in non-oil and gas

sectors as well as traditional sales to oileld

service OEMs. The Electronics business unit

reported strong oil and gas sales, underpinned

by an easing of supply chain constraints relating

to microchips reported in 2022 and in the early

part of the current year. The Dearborn business

unit reported increases in non-oil and gas

revenue as aviation, commercial space, defence,

medical and power generation sales accelerated

in the year.

Hunting’s presence within the subsea sector

of the oil and gas industry has been steadily

growing following the acquisition of RTI Energy

Systems in August 2019, now called Subsea

Spring, and the acquisition of Enpro Subsea

in February 2020. These businesses, together

with our Subsea Stafford hydraulic valves and

couplings business, are key growth pillars of the

Hunting 2030 Strategy. Our Subsea businesses

continue to benet from the improved outlook for

offshore work in international markets driven by

strong activity in Guyana and, more recently, in

new frontier areas like the Turkish sector of the

Black Sea. Conrming this trend is the steady

momentum we are seeing in Enpro, with the

backlog for this business now the largest since

its acquisition with both international and Gulf

of Mexico opportunities.

Within our Other Manufacturing product

group, the well intervention product line has

shown signicant improvement year-on-year

as client capex needs for pressure control

equipment, predominantly in international

markets, have improved.

The overall picture for 2023 for the Company

has been one of considerable improvement

year-on-year. International market activity has

continued to pick-up as the impact of the

economic downturn following the COVID-19

pandemic has receded. This increase in market

activity is reected in the Group’s improved

results for the year and the record sales order

book seen at the year-end. This order book

predominantly comprises OCTG, Subsea

and Advanced Manufacturing orders, which

underlines the broad-based nature of the

recovery in the global oil and gas market, but

also highlights Hunting’s diverse energy and

non-oil and gas portfolio.

Delivering the Hunting 2030 Strategy

The Group has made advances in the year

in delivering its Hunting 2030 Strategy, with the

most signicant strategic initiatives detailed

in the following pages.

EBITDA

$103.0m

(2022 – $52.0m)

EBITDA margin

11%

(2022 – 7%)

Hunting PLC Annual Report and Accounts 2023 19Strategic Report Corporate Governance Financial Statements Other Information

Chief Executive’s Report continued

HUNTING 2030 OBJECTIVE STRATEGIC INITIATIVES DELIVERED IN 2023 PRODUCT GROUP

Retain focus on

global oil and gas

opportunities,

specically growing

our subsea and

offshore businesses

$91m contract award with Cairn Oil and Gas, Vedanta Limited

On 30 May 2023, the Company announced a record contract that management estimates to be worth up to $91m with Cairn Oil and Gas, Vedanta

Limited, for the supply of Hunting’s SEAL-LOCK XD

premium connection along with OCTG. The contract is for an estimated 100 wells and is to extend

up to three years for Cairn’s operations in Rajasthan, India. This order supports management’s belief that international market sentiment remains extremely

strong as governments and countries address the challenges of energy security, the development of domestic supply and post-COVID economic recovery.

OCTG

Launch of new technology

The Group continues to develop and introduce new technology to clients. Research and development initiatives focus on increasing in-eld safety, while

also delivering completion efciencies and lowering drilling and development costs for clients. With approximately one-quarter of North American

horizontal wells relying exclusively on oriented perforating techniques, Hunting launched the H-4 Perforating System™ during the year, rst to the US

onshore and then in Q4 2023 to customers in Canada. This cutting-edge system incorporates patented self-orienting tandems, plug-and-play rapid

arming perforating guns, and a modular RF-Safe switch to improve ring and positioning accuracy during a well completion procedure as well as in-eld

safety. Hunting Titan has also been developing orienting tools for near-vertical holes, which include the north-seeking gyroscope tool. The surface testing

of the tool was completed in November, with sales commencing in Q1 2024.

Perforating Systems

Opening of threading facility in India, with joint venture partner Jindal SAW

In Q2 2023, the Company completed the construction and commissioning of its new threading facility at Nashik Province, India, with its joint venture

partner, Jindal SAW Ltd. The ofcial opening of the facility took place in September 2023. Hunting’s precision engineered premium connection technology

will be applied to Jindal SAW’s premium seamless casing and tubing.

OCTG

Increased revenue and sales order book from Subsea Technologies

The Subsea Technologies operating segment was formed on 1 January 2023, which was formerly part of the North America operating segment. The

segment completed a number of signicant orders in the year, especially in Guyana, as investment in offshore projects increased. Revenue increased 43%

to $98.6m, with an EBITDA margin of 14% compared to 5% in 2022. The Spring business had a number of material order wins for its titanium stress joints

in the year for oating production, storage and ofoading vessels in Guyana and the Turkish area of the Black Sea. The segment ended the year with an

order book of $152.2m, including a strong backlog for Enpro.

Subsea

Develop a global

position in the

energy transition

sector.

Increase our

position in high

value, non-oil and

gas industries

Ten-year strategic alliance signed with Zhejiang Jiuli Hi-Tech Metals Co. Ltd

On 5 June 2023, the Company announced a ten-year strategic alliance with Zhejiang Jiuli Hi-Tech Metals Co. Ltd (“Jiuli”), for the supply of corrosion resistant

alloys (“CRA”) for OCTG, geothermal and carbon capture, usage and storage (“CCUS”) applications. The partnership brings together Hunting’s SEAL-LOCK

premium connection technology with Jiuli’s CRA, such as duplex/super duplex and high nickel-based alloys, for downhole casing and production tubing

applications, which meet some of the harshest well conditions in the traditional oil and gas industry as well as the emerging CCUS and geothermal markets.

The partnership also adds to Hunting’s existing OCTG product portfolio and enables the supply of the widest range of premium OCTG for its client base,

within the international oil and gas and energy transition markets, as projects accelerate in the key areas of North America, Middle East, Africa and Asia

Pacic. CCUS and geothermal are two end-markets that Hunting is pursuing as part of its strategy to become a key supplier to these sectors by providing

project developers with critical supply channels and the premium connections required for these increasingly challenging technical projects, which operate

in demanding sub-surface environments. All these end-markets are expected to show robust demand and growth in the medium and long term.

OCTG

Collaboration agreement with CRA-Tubulars B.V.

On 13 July 2023, Hunting announced a collaboration agreement with CRA-Tubulars B.V., to further develop the Company’s presence in energy transition

markets. The collaboration provides the Company with access to novel titanium composite tubing technology, which is showing strong potential in CCUS

project applications. The technology has won awards within the Shell ‘Game Changer’ technology programme, and Hunting is exploring the use of the

technology alongside its SEAL-LOCK

premium connection technology. The collaboration agreement includes exclusive marketing, distribution and

manufacturing rights for oil and gas and carbon capture and storage markets in North America for a period of ve years.

OCTG

Hunting PLC Annual Report and Accounts 2023 20Strategic Report Corporate Governance Financial Statements Other Information

HUNTING 2030 OBJECTIVE STRATEGIC INITIATIVES DELIVERED IN 2023 PRODUCT GROUP

Increased focus on

the long-term

sustainability of the

Group

Restructuring and operational efciency

Hunting is continuing to drive stronger internal operational efciencies throughout its global footprint, which will lower operating costs and lower the

Company’s carbon footprint. During the year, Hunting Titan closed its Oklahoma City operating site and transferred the manufacture of perforating

systems to the Group’s Pampa, Texas, and Monterrey, Mexico, facilities. A distribution centre has been retained in Oklahoma City to continue to service

clients in the Mid-Continent Region of the US.

Within the EMEA operating segment, the manufacturing and assembly operations of the Group’s main well testing site are to be transferred from the

Netherlands to Dubai in 2024, which will lead to the closure of a facility at Velsen-Noord, with activities in the Netherlands to be merged into a single

location. Sales, engineering and service support functions will be maintained in the Netherlands to support European clients. Hunting is building a new

larger, higher efciency facility in the Jebel Ali Freezone, Dubai, UAE. The facility will be purpose-built on a 14,000 square metre plot, which will include

a 3,700 square metre custom-built warehouse, yard, and ofce space. This strategic move aims to support the growing manufacturing needs of the well

testing and process systems business, as well as to reinforce existing regional product lines such as perforating systems, well intervention equipment,

OCTG, and Organic Oil Recovery. Hunting will be in a position to capitalise on the increasing opportunities and strong market outlook in the Middle East

and full its growth plans for the region. Hunting will retain a single facility in Velsen-Noord to support oil and gas and energy transition clients across Europe.

In January 2024, further consolidation of our footprint and cost base in the UK continued as the Enpro operations were transferred to the existing

Badentoy, Aberdeen facility.

Perforating Systems

OCTG

Other Manufacturing

Disposal of exploration and production assets

During 2023, the Group has completed a disposal process of all but one of its US onshore and offshore oil and gas producing assets, which are held by

Hunting’s wholly-owned subsidiary, Tenkay Resources, Inc (“Tenkay”). The assets have been sold on an asset-by-asset basis to a variety of third parties.

In addition, the Group has negotiated the transfer of the majority of the non-producing assets and respective future plug and abandonment liabilities,

which have reduced Hunting’s possible exposure to future decommissioning costs. At the year-end, Tenkay retains a working interest in the South

Timbalier 34 asset, which is expected to complete plug and abandonment early in 2024.

Other Manufacturing

Scope 1 and 2 reporting assurance and commencement of scope 3 emissions assessment

In the year, we completed a process to independently assure our scope 1 and 2 greenhouse gas emissions (“GHG”), and in September 2023, we began

the process of assessing our scope 3 GHG emission inventories. This process started in Q3 2023 at our Hunting Titan operating segment, which currently

represents around 23% of the Group’s scope 1 and 2 carbon footprint and is considered to be a major component of our overall footprint.

In 2024, this assessment will be extended to the Group’s Subsea Technologies, EMEA and Asia Pacic operating segments to further improve the

accuracy of our total GHG footprint. This will enable the Group to develop and publish a credible carbon reduction plan by mid-2025.

All

Non-oil and gas diversication/increase our position in high value non-oil and gas industries

The Group has ended the year with a strong non-oil and gas sales order book with orders for medical, military and commercial space sectors.

OCTG orders for geothermal applications into Europe increased, with the Netherlands facility increasing its sales of geothermal connections to $4.2m

in the year.

Advanced

Manufacturing

OCTG

Other Manufacturing

Chief Executive’s Report continued

Hunting PLC Annual Report and Accounts 2023 21Strategic Report Corporate Governance Financial Statements Other Information

Chief Executive’s Report continued

Group nancial summary

Hunting reports a 28% increase in revenue in the

year as market activity accelerated, with revenue

for the year increasing to $929.1m, compared to

$725.8m in 2022. Revenue in H1 2023 was

$477.8m (H1 2022 – $336.1m) and in H2 2023

was $451.3m (H2 2022 – $389.7m) as lower oil

and gas prices, especially in H2, led to more

subdued North American onshore activity.

However, there was an increase in international

offshore activity reported across many regions

through the year. Non-oil and gas revenue

increased 59% in the year from $47.6m in 2022

to $75.9m, driven by sales in our Electronics and

Dearborn businesses in the medical and defence

sectors as well as geothermal sales by the

Netherlands OCTG business.

Group EBITDA was $103.0m in 2023

(2022 – $52.0m), which reects the improved

market conditions seen in the year. With

increased volumes leading to better facility

utilisation, and targeted price increases taking

effect, the Group’s EBITDA margin increased

from 7% in 2022 to 11% in 2023. The Group’s

improved efciency is demonstrated by the

increase seen in EBITDA per average employee

from $25k in 2022 to $44k in 2023. EBITDA in

H2 2023 was $54.3m with a margin of 12%

compared to $48.7m in H1 2023 with a margin

of 10%.

Hunting Titan, which operates a short-cycle

business, generated revenue of $259.2m,

which was marginally lower than $266.0m in

2022, driven by the lower US onshore rig count.

This was offset by the continued adoption of the

H-3 Perforating System™ and the adoption of

the H-4 Perforating System™ introduced later in

the year; strong demand for its Pre-Loaded Gun

offering; increased sales of instruments and

detonating cord; and record international sales.

EBITDA for the year was $21.9m (2022 – $24.7m).

The North America operating segment has

reported excellent results in the year as

demand for premium connections and

completion accessories accelerated. Revenue

within the operating segment increased by 33%

in the year to $374.7m, compared to $280.7m in

2022, with a signicant increase in international

activity, specically the supply of well completion

packages to South America, contributing

signicantly towards this favourable result.

EBITDA for the year was $54.2m compared to

$26.7m in 2022, a signicant increase of 103%.

The newly formed Subsea Technologies

operating segment reported an increase of 43%

in revenue to $98.6m compared to $69.0m in

2022. A particular area of impressive growth has

been within the Subsea Spring business unit,

which won a number of large orders for its steel

and titanium stress joints (“TSJs”) for offshore

projects in Guyana and more recently in the

Turkish area of the Black Sea. EBITDA was

$13.7m compared to $3.4m in 2022, with an

EBITDA margin of 14% (2022 – 5%).

The EMEA operating segment reported a

year-on-year increase in revenue as international

activity levels continued to improve. Overall

revenue was $88.2m in the year, compared to

$71.5m in 2022, a 23% increase. EBITDA was

$1.7m compared to a $2.1m loss in 2022, due

to an increase in activity within our OCTG

businesses in relation to the Tubacex order for

Brazil. Activity levels across the Middle East

continued to increase during the year, resulting

in higher sales of pressure control equipment

and increased revenue from Hunting Titan

perforating products.

The increase in international drilling activity

and the growth in energy markets across

the Asia Pacic region have been the core

drivers of growth for the Asia Pacic operating

segment’s impressive performance in 2023,

with revenue increasing by 96% to $157.6m

from $80.4m in 2022. EBITDA was $11.5m

(2022 – $(0.7)m) with a margin of 7%

(2022 – (1)%). The signicant order secured

with CNOOC in 2022, for the supply of OCTG

with Hunting’s SEAL-LOCK XD™ premium

connection, contributed signicantly towards

the revenue growth seen in the year.

The Company ended the year with a record

sales order book of $565.2m compared to

$473.0m at the end of 2022, which underpins

our condence in the future protability of

the Company.

Operating prot for the year was $61.0m

(2022 – $2.0m) and, as there were no adjusting

items impacting operating prot, adjusted

operating prot for the year was also $61.0m

(2022 – $14.6m).

The Group’s prot before tax for the year was

$50.0m (2022 – $2.4m loss), with adjusted

prot before tax unchanged at $50.0m

(2022 – $10.2m).

Deferred tax assets of $83.1m, related to our

US businesses were recognised, validating the

condence we have in the continued return to

protability for these trading entities. This has

contributed to the large increase in statutory

protability and earnings per share.

Diluted earnings per share were, therefore,

70.0 cents (2022 – 2.8 cents loss per share),

with adjusted diluted earnings per share

20.3 cents (2022 – 4.7 cents), an increase

of 332% in the year.

Working capital has increased to $415.9m

from $362.8m, with the increase in inventories

supporting our record sales order book at the

year-end.

This, in part, led the Company to reporting

year-end total cash and bank of $(0.8)m

compared to a total cash and bank position

of $24.5m at the end of 2022.

Hunting is focused on converting prot into cash

ow and increasing its working capital efciency

This focus was reected in our cash generation

in H2 2023, which was $50.9m.

The Group’s net assets at the end of the year

were $957.1m compared to $846.2m at the end

of 2022, demonstrating the strengthening of our

balance sheet, providing nancial stability. The

Group’s return on average capital employed was

much improved at 6% (2022 – 1%) at the end of

the year.

The Company paid an Interim Dividend of

5.0 cents per share in October and the Board are

recommending a Final Dividend of 5.0 cents per

share, bringing the Total Dividend for the year to

10.0 cents per share, an increase of 11% over

2022 and in-line with the Hunting 2030 Strategy

to increase dividends annually by at least 10%.

Our employees continue to be our most

important asset and it was good to receive their

feedback in the employee engagement survey

conducted this year.

As part of the Board’s deliberations, which

included reviewing the impact of ination and

interest rate increases on the cost-of-living, base

salary increases were implemented across the

Group in Q1 2024 to assist our workforce.

Hunting PLC Annual Report and Accounts 2023 22Strategic Report Corporate Governance Financial Statements Other Information

I am really proud of the hard work and dedication

of the team during 2023, as their performance

enabled us to deliver a strong set of results for

the year. The Company’s overall protability and

efciency improved in 2023 and we are condent

that it is on an achievable pathway to meet the

targets set out at the CMD.

ESG and sustainability

We have continued to make good progress

during 2023 in increasing our disclosed

sustainability information.

Our safety and quality-assurance performance

has again delivered excellent outcomes,

demonstrating our focus and rigour in these

critical areas.

In the year, we also completed our second

employee engagement survey, which recorded

a strong improvement in our scoring. Our people

remain our most important asset and the Board

are pleased that our workforce is aligned with

our long-term strategic goals.

Finally, our published carbon and climate data

has also improved as new procedures have been

introduced to contain and reduce our impact on

the environment.

Outlook

The global outlook for energy in the year ahead

will be driven by similar themes to those reported

in 2023.

Geopolitical tensions and potential supply

disruptions are a continuing threat to the oil and

gas supply/demand balance, and while

commodity prices trended lower in the past year,

it is likely that they will remain in a range that

supports sustained activity levels during 2024.

Offshore market momentum is poised to

continue to increase in the coming years as

major development cycles in South America

and South West Africa continue to accelerate.

The North American onshore drilling market is

likely to be stable during 2024, with the US more

focused on oil production. Additional LNG

capacity is likely to come onstream later in the

year, which will support new natural gas drilling in

the second half. Projected growth in international

sales should also offset shifts in US onshore

market dynamics.

The Middle East will also likely show a continuation

of the activity levels reported in 2023. Despite the

pause in oil production expansion in Saudi Arabia

being announced in recent weeks, natural gas

drilling in-country will continue to grow to meet

local demand, underpinning steady activity levels

in the year ahead.

In India, the Group’s facility is shortly to receive its

API threading licence which will enable premium

threading activities to accelerate. Management

sees a positive prot contribution from our joint

venture in 2024, given the growth momentum

in-country.

Across Asia Pacic, traditional energy demand

as well as energy transition initiatives will continue

to drive growth, with geothermal opportunities

being captured as market activity increases,

particularly in the Philippines and Indonesia.

For Hunting, the Group’s OCTG product group

should deliver another year of growth, as activity

in South America continues to increase, coupled

with stable activity in the US and Canada.

Our EMEA OCTG operations will continue to

support projects in Brazil, while in Asia Pacic,

larger tenders continue to be announced, which

should lead to new orders being secured.

Hunting’s Perforating Systems business will

continue to roll-out its leading technology to

clients across North America, while continuing

to grow internationally where markets such as

Argentina present good opportunities due to

reduced import tariffs being announced.

Our Subsea Spring and Stafford businesses

should also deliver a further year of strong

results as orders for ExxonMobil and other

major operators across South America continue

to be progressed. The Enpro business should

also support this growth prole given the orders

secured in the second half of 2023.

Hunting will continue to drive its non-oil and

gas diversication through the Advanced

Manufacturing businesses. Momentum remains

strong, with opportunities in aerospace and

defence being pursued, supporting our 2030

strategic objectives.

In summary, the Board sees a further year of

growth ahead, given our diverse, international

product offering, with management remaining

comfortable with current market guidance.

On behalf of the Board

Jim Johnson

Chief Executive

29 February 2024

The balance sheet remains

strong to ensure the

Company’s nancial stability

and long-term sustainability.

Return on average capital employed

(2022 – 1%)

Net assets

$9 57.1m

(2022 – $846.2m)

Chief Executive’s Report continued

Hunting PLC Annual Report and Accounts 2023 23Strategic Report Corporate Governance Financial Statements Other Information

Market Summary

2023 was a year of energy market growth, despite geopolitical and

other economic volatility. With the ongoing conict in Ukraine and new

tensions in the Middle East, coupled with an increase to the cost-of-

living, oil and gas markets have shown resilience as multiple factors

impacted commodity prices.

The performance of the Group during 2023

has been underpinned by a broad-based

strengthening of activity within the global oil and

gas sector, driven by post-pandemic investment

in many areas of the energy industry following

many years of insufcient investment. Investment

in long-term international offshore projects has

seen strong growth in the year, particularly in

South America and Asia Pacic, which has led

to an increase in exploration and production

drilling and equipment purchasing that has

beneted a number of the Group’s key product

lines including OCTG, Subsea and Advanced

Manufacturing.

The US onshore drilling market was constrained

by spending discipline and reported a at

year-on-year capital investment prole as gas

drilling reduced in the year across the US,

following two years of strong growth.

While this has led to at results within our

Perforating Systems product group, when

comparing 2023 and 2022 performance, the

increase in international sales and the delivery

of new technology to our clients, particularly in

respect of the launch of the H-4 Perforating

System™, helped the Hunting Titan operating

segment signicantly outperform the US

onshore market.

Energy security continued to be high on political

agendas as governments continued to seek to

secure alternative energy sources and store

sufcient quantities of natural gas.

Other short-term solutions included expanding

oil and coal-red power generation, and pursuing

new renewable energy projects.

The year ended with COP28 where a global

commitment was reached to transition away

from fossil fuels over time while tripling renewable

energy capacity and doubling energy efciency

by 2030 to ensure the Paris Agreement

commitment to limit global temperature increases

to 1.5°C is met.

In summary, the market environment for energy,

while it has been volatile, has trended strongly

towards growth in the year, and the market for

the energy service industry has been robust,

which led to a 28% increase in Group revenue

and a 98% increase in EBITDA.

Hunting PLC Annual Report and Accounts 2023 24Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

137.1

96.4

144.2

2023

2022

2021

1,517

1,158

1,560

2023

2022

2021

53.5

41.8

68.3

2023

2022

2021

189

165

207

100

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Dec

5.0

4.0

3.0

2.0

1.0

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Dec

Commodity prices

The WTI crude oil price is a material market

indicator for the Group, as short- to medium-term

investment decisions of our clients are driven by

prevailing commodity prices. During 2023, the

average WTI crude oil price was $78 per barrel,

which is 17% lower than the $94 per barrel

reported in 2022. Key inputs to this outcome

include a normalising of the global supply/demand

prole following the price shocks seen in 2022

when Russia invaded Ukraine in February 2022.

In addition, the global economic outlook became

increasingly volatile from Q2 2023 onwards as

higher ination and global interest rates hampered

economic growth, following the strong recovery

seen in 2021 and 2022. The WTI crude oil price

traded between $94 and $67 per barrel in the

year as these various factors played out.

The Henry Hub natural gas price reported a

much more challenging year in 2023, following

exceptionally strong pricing throughout 2022 as

natural gas demand from Europe, also driven by

the conict in Ukraine, supported activity across

the US. The average price for natural gas was

$2.66 per mmBtu in 2023, which compares with

$6.54 per mmBtu in 2022, or a decline of 59%

year-on-year.

The combination of the above factors led to

volatile industry sentiment across the year, as

companies across all levels of the oil and gas

supply chain grappled with fast moving

investment decision making. However, many

global economies continued to exit from the

impact of the COVID-19 pandemic and increased

capital investment in oil and gas exploration and

production drilling, which in turn supported new

equipment purchasing across many of the

Group’s product lines. In 2023, total drilling

investment increased 11% compared to 2022

increasing from $190.6bn to $212.5bn in the year.

Offshore drilling investment grew at a faster pace

than onshore drilling investment. In the year,

offshore drilling grew 28% from $53.5bn in 2022

to $68.3bn in 2023, with the majority of this

increase due to buoyant international markets.

Onshore drilling investment grew 5% in the year

from $137.1bn in 2022 to $144.2bn in 2023.

The investment in exploration and production

drilling, noted above, supported the continued

strengthening of activity across the global energy

industry, despite the macro-economic and

geopolitical headwinds faced by operators. This

investment has enabled an overall increase in the

average global rig count to be reported, with

offshore rigs increasing by 9% in the year, while

onshore rig counts increased 3%, primarily due

to the increases reported within international

markets. The offshore rig count, therefore,

averaged 207 active units throughout 2023

compared to 189 units in 2022. The onshore rig

count averaged 1,560 active units throughout

2023 compared to 1,517 units in2022.

Within North America (being the US and

Canada), the average onshore rig count declined

4% to average 845 units, while the offshore rig

count increased by 4 units to average 20 active

units. Within international markets, the average

onshore rig count increased by 77 units to

average 715 units, while the offshore rig count

increased by 14 units to average 187 active units.

Drilling capital investment

Commodity prices

Rig counts

WTI crude oil price

$ per barrel

Global onshore capital investment

$bn

Global onshore average rig count

Henry Hub natural gas price

$ per mmBtu

Global offshore capital investment

$bn

Global offshore average rig count

Source: FT.com Source: FT.com

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Market Summary continued

Hunting PLC Annual Report and Accounts 2023 25Strategic Report Corporate Governance Financial Statements Other Information

Market Summary continued

Energy transition

The global energy landscape is experiencing

a transformation as efforts are made to mitigate

the effects of climate change and improve energy

security by shifting towards cleaner, more

sustainable energy options. COP28 saw a global

pledge to accelerate climate action, which

commits all signatory countries to move away

from carbon energy sources to address the

worst effects of climate change.

Amid this global shift towards sustainable energy

sources and energy reliability, the role that

geothermal energy is expected to play in the

global energy mix will increase as it can be used

for both power and heat generation and is not

carbon intensive like oil and gas. In 2023, installed

geothermal capacity comprised approximately

15.9 gigawatts (2022 – 14.6 gigawatts). Until

2030, a compound annual growth rate (“CAGR”)

of over 10% is expected for geothermal power,

with industry expenditures projected to exceed

$85bn between 2022 and 2030.

Geothermal energy is also going through a

technology step change from conventional

geothermal to high-tech “unconventional

geothermal” developments as wells are drilled

deeper. Geothermal wells use traditional energy

products and services and this provides

opportunities for Hunting to cross-sell OCTG

and Perforating Systems products.

Carbon sequestration, the process of capturing

and storing carbon dioxide, will also form a vital

part of the global solution to reduce carbon

emissions and reach Net Zero, and is the primary

route to decarbonising the oil and gas industry.

Projected global geothermal capacity

Planned CCUS capacity additions by year of announced start-up

mmtpa

Source: Wood Mackenzie

There are strong legislative drivers supporting

CCUS projects such as the Ination Reduction

Act in the US.

leakage is one of the biggest concerns for

CCUS wells. This, combined with the need to

withstand cryogenic temperatures, means that

the wells require the use of higher chrome

content and high corrosion resistant alloys.

OCTG demand for high chrome content is

expected to double year-on-year to 2026.

Other non-oil and gas

Defence, medical and commercial space

markets are seeing impressive growth,

presenting a number of opportunities for the

Company to diversify its revenue streams.

The medical electronics market was estimated

at $82bn in 2020 and is expected to hit $248bn

by 2030, poised to grow at a CAGR of 11.8%

to 2030.

The US Department for Defense Budget for

2024 totals $842bn, an increase of 9% from

the 2023 budget of $773bn and the commercial

space market, which was approximately $280bn

in 2010, is expected to increase from $474bn in

2022 to $1.0tn by 2030 according to McKinsey

& Company.

Hunting expects to benet from increasing its

share of these markets as well as beneting from

the ongoing expansion in the markets themselves.

2022 2023 2024

2025

2026 2027 2028 2029 2030

35,000

30,000

25,000

20,000

15,000

10,000

5,000

Up to

2023

2024 2025

2026

2027 2028 2029 2030 2030+

1,200

1,000

800

600

400

200

Hunting PLC Annual Report and Accounts 2023 26Strategic Report Corporate Governance Financial Statements Other Information

Market Summary continued

Hunting PLC Annual Report and Accounts 2023 27Strategic Report Corporate Governance Financial Statements Other Information

IEA projected fossil fuel demand: 1990-2050

Oil Coal Natural gas Share of fossil fuels in TES (right axis)

Source: IEA – World Energy Outlook 2022

20501990 2000 2010 2020 2030 2040

300

500

450

400

350

250

200

150

100

60%

100%

90%

80%

70%

50%

40%

30%

20%

10%

Exajoules

Business Model

Hunting is a global precision

engineering group, focused

on high-value end markets

that recognise and value our

manufacturing capabilities and

strong focus on quality-assured

products and services.

Delivering high performance

technologies, which enables

an engineering solution to be

delivered safer, faster and at lower

cost for our customers are key

themes in our approach to the

markets we select. This approach

is supported by our robust health

and safety protocols, which are

aimed at keeping our highly

trained employees safe.

Our key product groups are

sold through our ve operatingsold through our five operating

segments as noted on pages

50 to 54.

Energy – oil and gas

Our primary market focus is the global oil

and gas industry. Affordable and secure

energy has been the foundation of economic

growth for many decades, with a technology

and geographic landscape that constantly

changes. Global crude oil demand is currently

c.100 million barrels per day and, as the chart

below demonstrates, this is likely to remain

unchanged for decades to come. Our products

and services are developed to support this

global need. The oil and gas industry is a

complex, well-regulated, multi-faceted sector

with a wide range of technological needs to

address the extraction of hydrocarbons in a

safe and responsible manner. Hunting’s

products are, therefore, aimed at addressing

the needs of our customers, whether that be

integrated energy groups, international service

companies, national or independent oil and

gas companies. To deliver this daily need for

oil and gas, the industry needs technology

and equipment that are high performance

engineered solutions. Hunting’s major product

groups are summarised on pages 40 to 49, and

range from onshore-focused well completion

solutions produced by our Perforating Systems

business (Hunting Titan) to equipment used in

deepwater developments produced by our

Subsea Technologies businesses. A key market

indicator for Hunting’s businesses is the annual

capital expenditures allocated by the industry’s

stakeholders. In 2023, the global investment

in crude oil and natural gas production was

c.$213 billion. This is likely to be stable for many

years to come as the world maintains its reliance

on traditional energy solutions.

Energy – transition technologies

As western economies increase efforts to

decarbonise their energy needs, exciting market

opportunities are opening up to the Group.

Geothermal energy is a primary energy source

that is seeing strong growth in the short term,

to deliver cleaner sources of heat and energy.

These developments are presenting complex

engineering challenges to the energy industry.

Hunting sees high growth opportunities for

its OCTG product group as our premium

connections and strategic supply channels offer

critical solutions to many clients. Carbon capture,

usage and storage (“CCUS”) is another solution

being accelerated to reduce atmospheric carbon.

CCUS projects demand high-end materials and

engineered solutions that will enable these

projects to operate for many decades.

Non-oil and gas

Hunting has been manufacturing products and

technologies to the aviation industry for many

years. The Group has key defence-related

accreditations within its Advanced Manufacturing

businesses, which enable Hunting to participate

in government contracts including the naval

and air force segments, supplying engine shafts

for military aircraft and periscope tubes for

submarines. In recent years, the Group has also

manufactured components for the commercial

space sector, which demands our unique

precision engineering skills and expertise.

Hunting manufactures key components for

the power generation sector, including turbine

shafts and is also focused on developing

accessories for the medical sector.

What we do

Hunting PLC Annual Report and Accounts 2023 28Strategic Report Corporate Governance Financial Statements Other Information

Business Model continued

We develop

proprietary technology

We manufacture close to where our

clients need us

We leverage our brand and

reputation through strong quality

assured products

We train our employees and

keep them safe

The development of new technology and

products is a key element of our business

model and strategy. This intellectual property

and know-how is introduced to our blue chip

customers as the drive for more efcient and

safer delivery of oil and gas continues as well

as addressing the challenging environments

that the geothermal and CCUS sectors

operate in.

In 2023, the Group held 538 patents and

trademarks, covering 153 products.

Related risks

Increased competition and market

consolidation; adverse movement in

commodity prices; climate change and

energy transition; cyber security; loss of key

executives or staff and shortage of key staff;

work environment issues including health and

safety; product quality and reliability; reaction

to external and internal forces; and changing

global rules and regulations.

Hunting has a global operating presence

in strategic locations to ensure that we are

close to where our customers are drilling

and developing any resource type. Our

established operating footprint ensures that

we can support our customers in the oil and

gas industry and can be leveraged to address

global geothermal and CCUS projects.

At 31 December 2023, we manufactured

in 11 countries, from 27 operating sites

(2022 – 28) and had 16 distribution centres

(2022 – 14).

Related risks

Increased competition and market

consolidation; product quality and reliability;

third-party risk; and changing global rules

and regulations.

The Hunting brand is supported by our strong

reputation for quality assurance and health

and safety. These credentials drive customer

loyalty and form the basis of most industry

tenders, which support our success in

increasing our market share in key product

lines and multiple end-markets.

During 2023, the Group manufactured

23.0m parts (2022 – 16.6m) with an

internal manufacturing reject rate of

0.20% (2022 – 0.13%). The reject rate for

goods shipped was 0.0006% in the year

(2022 – 0.0013%). These metrics demonstrate

the impressive quality and reliability of our

products. This performance strengthens

Hunting’s standing in its end-markets.

Related risks

Increased competition and market

consolidation; cyber security; loss of key

executives or staff and shortage of key staff;

work environment issues including health and

safety; product quality and reliability; reaction

to external and internal forces; third-party risk;

and acquisition risk.

Our health and safety protocols have been

developed to keep our employees safe, with

our safety performance measured using an

industry-wide performance indicator, which

is monitored closely.

In 2023, the Group had 24 recordable

incidents (2022 – 23) leading to a total

recordable incident rate of 0.91 (2022 – 0.97)

compared to the industry standard of 4.0.

Related risks

Increased competition and market

consolidation; cyber security; loss of key

executives or staff and shortage of key staff;

work environment issues including health and

safety; reaction to external and internal forces;

third-party risk; and acquisition risk.

Our pillars for value creation

Hunting PLC Annual Report and Accounts 2023 29Strategic Report Corporate Governance Financial Statements Other Information

We provide critical supply channels We target blue-chip customers

and suppliers

We leverage our expertise

in materials and engineering

We operate in a responsible

and sustainable way

Our products are often manufactured using

critical raw materials, which enable them to

perform in highly challenging environments.

We work hard to provide competitive supply

channels to lower project costs without

compromising on quality. Hunting is an

independent provider of premium and

semi-premium connections and precision

engineered accessories for all oil and gas

resource types, providing cost agility for

our customers. The Group has a number

of strategic partnerships, including our joint

venture partner Jindal SAW in India, which

produces OCTG pipe and tubulars, to which

Hunting’s premium connections are applied

for the local Indian energy market. This

venture meets local content requirements.

The Group also has strategic supply chain

partners to support the accelerating energy

transition sector, including the ten-year

alliance with Jiuli and the ve-year agreement

with CRA-Tubulars.

Related risks

Increased competition and market

consolidation; reaction to external and internal

forces; and third-party risk.

Hunting is a trusted supplier to some of the

world’s leading energy companies, including

integrated energy companies, international

services groups, independent oil and gas

producers, as well as leading engineering

companies who operate in the global aviation,

commercial space, defence, medical and

power generation sectors.

We target clients and end-markets who value

strongly assured products and services, and

who demand high-performance technology

and products. We have developed long-

standing relationships with our customers

through our market-leading reputation for

health and safety, quality and reliability,

differentiated technology, availability and

delivery, and customer service and support.

Related risks

Increased competition and market

consolidation; adverse movement in

commodity prices; cyber security; product

quality and reliability; third-party risk; and

acquisition risk.

Hunting’s workforce comprises highly skilled

engineers and machinists who lead the

development and manufacture of our

high-performance technology and products.

Our expertise in mechanical and materials

engineering and metallurgy, ensures that

our products will perform in high-pressure,

high-temperature environments.

We are able to leverage this expertise into

energy transition markets as well as high-

value non-oil and gas markets, such as

aviation, commercial space, defence and

medical for diversication opportunities.

Related risks

Increased competition and market

consolidation; adverse movement in

commodity prices; product quality and

reliability; third-party risk; and acquisition risk.

Hunting’s responsible and sustainable

approach to its global operations includes the

monitoring of waste and emissions to ensure

we have a minimal impact on the environment.

We have recycled for many years and, more

recently, have started to monitor our carbon

and climate impact, with initiatives being

introduced to reduce this impact. In 2023,

the Group announced new 2030 emissions

reduction targets as part of the Board’s drive

to improve our carbon reduction credentials

and to assist in the preparation of a Net Zero

transition plan.

Related risks

Climate change and energy transition; cyber

security; loss of key executives or staff and

shortage of key staff; work environment

issues including health and safety; product

quality and reliability; reaction to external and

internal forces; third-party risk; acquisition risk;

and changing global rules and regulations.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 30Strategic Report Corporate Governance Financial Statements Other Information

Business Model continued

Delivering value for our stakeholders

The Group’s stakeholders enable

the delivery of Hunting’s business

model and strategy. Stakeholder

engagement forms a key element

of our culture and is an area which

has increased over the past few

years. Understanding the needs

of our shareholders, customers,

suppliers and workforce is

achieved through regular dialogue.

Shareholders and lenders

Our shareholders and lenders provide equity

and loan capital to the Group. The Directors

regularly engage with shareholders and

lenders to discuss performance, strategy,

governance and other matters. This feedback

is used to rene our strategic plans.

Employees

Hunting’s employees deliver our strategic

plans and are the Group’s most important

asset. We are committed to training and

developing our workforce, and keeping them

safe through the operation of stringent health

and safety policies. The Board meets regularly

with management and the workforce through

site visits and engagement programmes.

Customers and suppliers

Our clients are critical to the nancial success

of the Group. Customer dialogue helps us

shape our product development strategy and

provides focus to our service offering. Hunting

continuously works hard to deliver a secure

supply chain for our clients and in the year

signed new strategic agreements.

Environment and climate

The Group is committed to strong

environmental stewardship. Our operating

principals are focused on containing and

reducing our carbon footprint, maximising

recycling, reducing waste streams and

increasing our climate change commitments.

Governments and communities

The Group continued its engagement

with local regulators, tax authorities and

governments in the year. Hunting continues

to assist communities through a wide range

of activities, including fund raising events

and donations. Each region develops their

own community initiatives to align with local

cultural practices.

10.0 cents

2023 dividend per share declared

9 years

Average employee tenure

538

Patents and trademarks

23%

Electricity from renewable resources

$81k

Charitable donations

Hunting PLC Annual Report and Accounts 2023 31Strategic Report Corporate Governance Financial Statements Other Information

Shareholders and lenders

Shareholders

Hunting’s shareholders provide a key source

of capital to enable growth for the longer term.

The Group has one class of Ordinary shares

and has a premium listing on the London Stock

Exchange. At 31 December 2023, the total

number of Ordinary shares in issue was 164.9m

(2022 – 164.9m), and the number of shareholders

on the register was 1,263 (2022 – 1,285). The

Board is responsible for setting the Company’s

dividend policy. The Group’s current practice is

to declare dividends in US dollars, but pay in

Sterling. Returns achieved by shareholders, by

holding the Company’s Ordinary shares, are

measured through total shareholder return

(“TSR”). TSR forms a large portion of the

longer-term remuneration paid to the executives

of the Group, with demanding vesting targets

measured against our industry peers. In 2023,

Hunting PLC’s Ordinary shares achieved a TSR

of (9)% on an annualised basis, due to weaker

investor sentiment on the US market outlook

during the year. For the denition of TSR please

see page 12.

Shareholder engagement

Regular shareholder engagement meetings are

organised through an annual calendar of work

arranged through our investor relations function.

The Chief Executive and Finance Director meet

with institutional investors directly following the

publication of the Group’s half- and full-year

nancial results and throughout the year, and

also attend investor conferences in the UK,

Europe and the US to meet new shareholders.

Further, the Company Chair and Senior

Independent Director meet investors annually

to discuss governance and other matters. In

September 2023, the Group held a Capital

Markets Day, where Hunting’s senior

management set out the strategy for growth

to support stronger shareholder distributions

and returns to 2030.

Total shareholder return

2023

2022

2021

102

(22)

(9)

Board engagement and decision making

– shareholders

The Directors of Hunting receive a report

detailing the Company’s major shareholders at

each Board Meeting, with a brieng by the Chief

Executive and Finance Director on meetings

with shareholders that have recently occurred.

The Audit Committee reviews dividend

proposals as part of its regular programme of

work and makes a recommendation to the

Board following a review of the nancial

performance for the relevant reporting period.

Dividends are announced along with each set

of Group results and are usually paid in May

and in October. The Directors are proposing

a 2023 Final Dividend of 5.0 cents per share,

which will be subject to approval by

shareholders at the 2024 AGM.

During the year, an investor perception survey

was conducted by a third party on behalf of

the Company, with feedback presented to the

Board. The survey sought to appreciate major

investors’ perceptions on strategy, performance,

executive management and other issues.

During H2 2023, the Directors engaged with

major institutional investors on a new Directors’

Remuneration Policy and Long-Term Incentive

Plan, which is to be tabled at the 2024 AGM.

Following discussion and feedback,

amendments were made to the proposals.

Lenders

The $150m Asset Based Lending (“ABL”) facility

commenced in February 2022 and is due to

expire in February 2026. The ABL lending group

comprises Wells Fargo and HSBC.

Given the Group’s return to strong growth in

the year, the ABL has been utilised and drawn

down to support the Group’s working capital

requirements to meet sales orders. The average

interest rate on the ABL was 7%.

Dividend per share declared

cents

2023

2022

2021

9.0

8.0

10.0

Board engagement and decision making

– lenders

The Directors are briefed at each Board

meeting by the Finance Director on the

Group’s nancial position and the relationship

with members of the bank lending group.

Regular meetings between the Chief

Executive, Finance Director, Group Treasurer

and the ABL lenders were held during the

year to brief the banks on the performance

and position of the Group.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 32Strategic Report Corporate Governance Financial Statements Other Information

Employees

Hunting’s reputation, which has been built over

many years, is underpinned by its highly skilled

employees, who are key to fullling the Group’s

strategic objectives. At 31 December 2023, the

Group had 2,420 employees (2022 – 2,258)

across its global operations.

The Group is committed to training and developing

all employees, which includes Health and Safety

training, professional development and general

career development initiatives. To retain our staff,

our employees are fairly remunerated with a

competitive base salary. Given the competitive

landscape of our industry, our base levels of pay

are well above minimum wage thresholds.

Employees are offered benets on joining the

Group, including healthcare cover, post-retirement

benets and, in certain instances, when Group

outperformance in terms of operational or

nancial targets has been delivered, participation

in annual bonus arrangements.

The Group has a strong reputation for being a

responsible employer, which is reected in the

average tenure of nine years (2022 – nine) and

voluntary workforce turnover rate of 14%

(2022 – 13%). This demonstrates Hunting’s

commitment to its employees and its drive to

nurture a mutually benecial relationship between

the Company and its employees.

Hunting takes diligent steps to achieve full

compliance with all relevant regional laws

covering employment and minimum wage

legislation. As a responsible employer, full and fair

consideration is given to applications for positions

from disabled persons.

The Group’s ethics policies support equal

employment opportunities across all of Hunting’s

operations. While the Board, through the work of

the Ethics and Sustainability Committee, monitors

procedures to comply with our published Code

of Conduct, responsibility for our employees lies,

for the most part, with local management to

enable local matters to be addressed, with all

businesses complying with the Group’s ethical

employment and human rights policies as

published in the Hunting PLC Code of Conduct

(www.huntingplc.com).

Year-end employees

2023

2022

2021

2,258

1,949

2,420

Training

The Group operates an embedded Health and

Safety training programme for its employees, with

an on-boarding programme for new employees.

The Group also provides ethics training through

a Code of Conduct course, to ensure awareness

of our published policies. The programme

incorporates anti-bribery and corruption, modern

slavery, fraud and tax modules to ensure our

employees understand their responsibilities on

joining the Group. During the year, machinists

and inspectors of the JV in India were trained by

Hunting to ensure that our quality-assurance

standards are applied. As cyber security is a

principal risk, a cyber security training programme

was rolled out for all relevant employees in the

year. For further information on employee

attraction, retention and development, and

employee engagement, see pages 75 and 76.

Diversity and inclusion

The Company recognises the benets of having

a diverse workforce, which include attracting and

retaining the best people for the job, supporting

and delivering high performance, and increasing

the effectiveness of the Company. To this end,

Hunting aims to build and maintain a working

culture that is inclusive of all and values diversity.

Hunting believes that promoting and developing

diversity is everyone’s responsibility. The

Company’s aim is to promote equality and good

relations between employees of a diverse

background and eliminate discrimination. Hunting

is also committed to providing a safe working

environment where staff are treated with respect

and ensuring that our employees enjoy prejudice-

free decision making, taking into account all

stakeholder interests and committing Hunting

to building a working environment in which all

individuals are able to make best use of their

skills, free from discrimination, victimisation,

harassment and/or bullying, and in which all

appointments are based on merit. Hunting has

an embedded culture of equal opportunities

for all employees, regardless of gender, sexual

orientation, race, colour, nationality, disability,

neurodiversity, age, religion or belief, marital

or civil partnership status, pregnancy or on

maternity or paternity leave. We will ensure that all

our employees have the opportunity to develop to

their full potential. For further reporting on diversity

and inclusion, see page 76.

Hunting’s policies promote gender and ethnicity

suggestions made in the Hampton Alexander

Review and the Parker Review, and these are

taken into consideration as the Board is refreshed

over the coming years, with the new reporting

requirements published by the Financial Conduct

Authority noted on page 118.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 33Strategic Report Corporate Governance Financial Statements Other Information

Human rights

We are committed to respecting and upholding

the human rights of all our employees and

training is provided to employees on a regular

basis. For further reporting on our approach to

human rights, see page 78.

Modern slavery

Our Modern Slavery statement can be found

on our website (www.huntingplc.com).

Whistleblowing

The Board of Hunting has established procedures

whereby employees can raise concerns, in

condence, by contacting the Company Chair

or Senior Independent Director.

The Group also uses an independent

whistleblowing service operated by SafeCall.

Contact information for both these lines of

reporting is published on staff notice boards

across the Group’s facilities and within the Group’s

magazine published twice yearly, the “Hunting

Review”, which is available to all employees.

Employee engagement survey

During H1 2023, Hunting completed its second

all-employee engagement survey using the

Gallup Q12 poll.

Management recognises that strong employee

engagement benets the bottom line outcome

for the Group with the “most engaged”

organisations enjoying greater nancial returns.

With this understanding, the measurement and

improvement of employee engagement

continues to be an objective of our Company’s

core strategy.

The HR team and location managers worked

hard to ensure employees without regular

computer access participated in the survey.

We were extremely pleased with the participation

results from the 2023 employee survey. Of the

2,254 employees eligible to participate in the

survey, 1,866 responded, which equates to 83%

of our employees. This is an improvement over

the 2019 participation rate of 80%.

This high level of participation indicates the

positive level of engagement from our employees

as it demonstrates that they are invested in their

work environment and are willing to participate

in an exercise to improve our workplace.

Details of the results of the survey can be found

on the following page.

Gallup Q12 employee engagement results

– average score out of 5

2023

2019

3.78

3.88

Following the results of the survey, the next steps

for the Company include:

• Enhance our development programmes to

include broad based, on-site delivered

supervisory and leadership training;

• Increase employee recognition initiatives,

leadership training to include a focus on

developing leaders’ skillsets in coaching and

providing feedback to employees. In addition,

review current business unit recognition

programmes for future opportunities and

enhancement;

• Implement the UKG-based performance

review process globally; and

• Create a strategy to communicate corporate

direction and initiatives throughout the

Company. Each division will be asked to hold

employee town hall meetings twice per year;

corporate messaging will be provided to

supplement local updates.

Health and safety

The Group is committed to achieving and

maintaining the highest standards of safety for its

employees and other stakeholders. Hunting has

a culture of aiming for best practice and employs

rigorous Health and Safety practices.

In the year, the number of hours worked increased

by 13% to 5.3m hours (2022 – 4.7m hours) as

trading increased across the Group’s businesses.

The Group’s target is to achieve zero recordable

incidents. Each local business is required to

develop tailored Health and Safety policies to

suit their environment. These incorporate the

Group’s approach to putting safety rst and,

at a minimum, comply with local regulatory

requirements.

During the year, there were no fatalities across

the Group’s operations (2022 – nil), with 24

recordable incidents (2022 – 23). The total

recordable incident rate was 0.91 compared to

0.97 in 2022 and the industry average of 4.0

(2022 – 4.0), as published by the US Bureau of

Labor Statistics. This incident rate reects a 6%

year-on-year decrease compared to the prior

year, despite new employees being hired and

activity increasing throughout the year.

Total recordable incident rate

2023

2022

2021

0.97

0.99

0.91

The total near miss frequency rate was 1.55 in

2023 (2022 – 2.79) reecting 41 near misses

(2022 – 66). The decrease in near misses reects

the more stable workforce numbers seen in the

year, following the recruitment drive in 2022,

as energy markets returned to growth.

All incidents were investigated, rectication

processes were implemented, and learnings

utilised in safety training sessions. The Group’s

enhanced SASB reporting includes vehicle

incident data, with nil incidents (2022 – nine)

reported in the year.

Total near-miss frequency rate

2023

2022

2021

2.79

0.78

1.55

Please see pages 80 and 81 for more information

on compliance with the SASB reporting framework.

For further reporting on Health and Safety, see

page 75.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 34Strategic Report Corporate Governance Financial Statements Other Information

Business Model continued

Board engagement and decision making

– employees

Through the Ethics and Sustainability

Committee, the Board has formalised the

reporting of Human Resources and HSE

matters, with the Group’s Chief HR Ofcer

and Director of QAHSE providing reports

at each meeting.

These senior managers are also members

of the Executive Committee.

The Directors organised an employee

engagement event at the Group’s OCTG

facility in Houma, Louisiana, in June 2023

where employees were able to ask questions

to the Board.

The second all-employee engagement survey

was completed in the year, with the positive

results noted above.

All reports to the Group’s SafeCall service

are taken seriously, with care being taken

to retain condentiality and anonymity of all

callers. Each report is investigated thoroughly,

with the Board receiving briengs from Keith

Lough, the Company’s Senior Independent

Director. During the year, the Group received

six reports to the SafeCall service (2022 – two).

For further reporting on our approach to

business ethics, see page 130.

Employee engagement survey shows positive results

Hunting completed its second all-employee

engagement survey during 2023. Listening to

our employees and responding to their feedback

is critical to our business. It helps us to

understand where we are succeeding and where

we need to focus our efforts.

The most important question the survey asked

was: “On a ve-point scale, how satised are you

with your organisation as a place to work?” We

were pleased that the score for this question was

4.07 out of 5 points, which is consistent with our

2019 score of 4.06.

Our average score across all 12 questions

was 3.88 out of 5, a 0.10 increase from 2019.

This result is statistically signicant because

most companies experienced a downward

trend between pre- and post-pandemic surveys,

and we are delighted that we saw a slight

improvement instead.

We scored especially well in the rst few questions

that dene our employees’ basic needs.

These results demonstrate that we provide our

employees with the technology and equipment

to do their work well, and that we create a

high-quality workplace.

Companies with high scores in these areas are

typically more productive, cost effective, creative

and adaptive.

We were pleased that 42% of our employees

were identied as being “engaged”, an increase

of 6% on our 2019 result of 36%.

Furthermore, we were happy with the survey’s

participation rate of 83%, a 3% increase on our

2019 participation rate.

This indicates that our employees are interested

in their work environment, and willing to play their

part in helping to improve it.

The survey also offered us insight on areas that

require our attention. We learned that we need

to focus our attention on employee recognition

procedures, offering more detailed feedback,

and improving communication.

An action plan has been developed to address

these issues. It includes broad-based, on-site

supervisory and leadership training to improve

employee recognition and feedback, and the

introduction of a performance review process,

which will be rolled out in North America and

EMEA rst, and Asia Pacic later this year. New

communication channels are also being

implemented.

We found it useful to compare our two surveys,

and we anticipate repeating the survey in two to

three years’ time.

Question 2023 2019 Change

I know what is expected of me at work 4.47 4.42 +0.05

I have the materials and equipment I need to do my work right 4.12 4.11 +0.01

At work, I have the opportunity to do what I do best every day 4.19 4.12 +0.07

FIND OUT MORE HERE

Hunting PLC Annual Report and Accounts 2023 35Strategic Report Corporate Governance Financial Statements Other Information

Customers and suppliers

Our customers

As a key participant in the oil and gas equipment

supply chain, Hunting’s broad portfolio of

products and services enables the Group to

cover a large proportion of the needs of the

global energy industry, including onshore and

offshore drilling projects and conventional and

unconventional resource development, supported

by selected high-value services to help our

customers achieve their strategic objectives.

A common theme across all of our businesses

is our ability to add value for our customers,

which is achieved by providing high-technology

products that lower the cost of operation, resolve

technical problems, or simply enable a job to be

completed more quickly or safely, without

compromising on quality.

A major area of the Group’s customer discussions

in the year was the improving outlook for energy

demand and the ability of the supply chain to

meet client needs as and when equipment

purchasing recommenced in earnest.

Hunting continues to engage its customer base

proactively to ensure our clients meet their

strategic objectives and continue to assist

customers with technology developments to

lower production costs or increase in-eld safety.

Customer engagement

Customer engagement is key to the Group’s

understanding of the short- to medium-term

needs of our various clients. This dialogue helps

us shape our strategy and focus our product

research and development programmes.

In the year, the Group continued to launch new

products that directly addressed customer

needs, some of which resulted from close

customer collaboration in response to in-eld

technical challenges.

As part of our active dialogue and engagement

with our customer base, key clients are usually

invited to our facilities to review our production

capabilities and processes, review new

technology and brainstorm on future projects.

Customer contact reports are a regular feature

of our sales function, which often include issues

or concerns, in-eld performance feedback and

overall customer satisfaction.

Customer perception and satisfaction surveys

undertaken by an independent third-party are

also employed to provide customer feedback

to the Company.

Hunting’s customer-facing sales teams are directly

supported by the Group’s engineering, quality

assurance and health, safety and environment

teams, who all assist in the provision of key

operational performance information that supports

global tenders and the overall sales function.

During the year, the Group’s sales teams

attended a number of international trade shows,

including ADIPEC in Abu Dhabi which enables

engagement with existing, as well as potential,

customers to take place.

Anti-bribery and corruption (“ABC”)

The Group has processes and procedures in

place to monitor and assess the risk of bribery

and corruption occurring.

Hunting’s Code of Conduct training course

includes detailed modules on ABC compliance

and risk assessment procedures.

Twice a year, each major business unit

completes a risk assessment process, detailing

management’s views on its risk prole against

16 key ABC considerations, and includes details

of the mitigating controls in place for each of

these risks.

As part of the Group’s Internal Audit function’s

work programme, a review of these risk registers

is undertaken where the bribery and corruption

risk prole is challenged.

Customer-related ethics and governance

Hunting’s close relationship with its customers

is also enhanced by our ethical policies and

transparent ways of doing business.

All of our major customers receive our Code of

Conduct, which includes a commitment to be

transparent in our business dealings.

Due diligence on new customers is also

undertaken to ensure the Group complies with

international trading and sanctions legislation.

Where relevant, we ask our clients to complete

“end user” declarations to conrm that Hunting’s

products do not conict or breach trading

restrictions or sanctions legislation. The Group

also has strong entertainment and hospitality

approval policies, which support our

commitment to conduct business with the

highest ethical standards.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 36Strategic Report Corporate Governance Financial Statements Other Information

Our suppliers

Hunting’s supplier base facilitates the Group in

achieving its purpose of providing highly trusted

and innovative products for our customers.

The Group ensures that critical materials are not

sourced from a single supplier, which provides

assurance to our customers that Hunting will

always be in a position to deliver.

Long lead-time material supplies are regularly

reviewed to ensure market pricing remains

competitive. Hunting’s management of its supply

chain includes working with a wide range of

suppliers with regular two-way dialogue on

quality expectations.

Often, supply chain managers visit the facilities

of our suppliers to review procedures, including

quality assurance, health and safety performance

and employment practices.

In the case of new suppliers, including those who

provide key components, rst article inspection

procedures are in place prior to issuing the order,

to ensure quality and delivery expectations are met.

During the year, the new facility in Nashik, India

was opened, which has been set up alongside

our JV partner Jindal SAW’s steel mill. The

strategic location of the new facility ensures the

supply of pipes and tubes in India to which

Hunting’s premium connections can be applied.

Hunting signed new strategic partnership

agreements in the year to further secure its supply

chain, and to support the accelerating energy

transition sector. A ten-year strategic alliance

agreement was signed with Jiuli to ensure the

supply of OCTG casing to which Hunting’s

SEAL-LOCK XD

connection is applied.

High-performance, corrosion resistant alloys

(“CRA”) are now viewed as a critical material to

deliver geothermal energy and carbon capture

and storage projects.

Hunting also signed a ve-year collaboration

agreement with CRA-Tubulars to market its

technology in the North America market.

CRA-Tubulars manufactures titanium composite

tubing, which is a corrosion resistant alternative

tubular technology.

The Company is a signatory to the Prompt

Payment Code and is committed to paying at

least 95% of its suppliers within the agreed

payment terms and to promptly advise them if

there is a dispute to ensure that disruptions to the

supply chain are kept to a minimum. We report

on our payment practices and performance

in-line with the UK Reporting Payment Practices

and Performance Regulations 2017. The Company

is looking to put in place early payment facilities

for suppliers during 2024.

Supplier-related ethics and governance

As with the Group’s customer base, Hunting

completes due diligence on its supplier base

and communicates its ethics policies to its

major suppliers.

The Group’s Supplier Code of Conduct is issued

to its suppliers as well as our Modern Slavery

policy, which highlights the Group’s ethical

trading and fair labour policies.

For further reporting on our approach to

business ethics, see page 130.

Business Model continued

Board engagement and decision making

– customers and suppliers

In parallel with the commercial dialogue and

engagement undertaken by our leadership

teams with our customers, the Board of

Hunting, in support of its statutory stakeholder

duty, has approved the development of the

Group’s strategy by reviewing and approving

capital investment projects that directly

support future customer needs.

Board approvals are also required for

contracts over a certain monetary value. The

Board approved these capital investments,

either as part of the approval of the Strategic

Plan or Annual Budget process.

In each case, the Board was satised that

there was good alignment between the

nal capital allocation and the Board’s

consideration of customer matters.

The Board, through the work of the Ethics

and Sustainability Committee, reviews the

Group’s supply chain risk prole and reviews

engagement reports on the Group’s dialogue

with suppliers. This leads to discussion and

challenge by the Directors.

For further reporting on our approach to

business ethics, see page 130.

Hunting PLC Annual Report and Accounts 2023 37Strategic Report Corporate Governance Financial Statements Other Information

Environment

Carbon and climate matters have become an

area of close scrutiny in recent years, with the

Board overseeing the development and

introduction of strong governance and reporting

initiatives that will support Hunting’s commitment

to these issues for the long term. As part of this

commitment to manage and reduce its carbon

footprint, the Board announced a new carbon

reduction ambition in March 2023, whereby

Hunting will now target a 50% reduction in its

scope 1 and 2 emissions, from its base-line year

of 2019, by 2030. The Directors are mindful that

all commitments made by the Group should

remain proportionate to the size and prole of our

operations, but also to protect our earnings and

shareholder returns, which form the basis of our

investment case. In 2023, the Group commenced

work to assess its scope 3 emissions, beginning

with Hunting Titan. This work will be expanded

during 2024 to cover the remaining businesses

in the Group. The Group continues to migrate its

primary and secondary energy sources to lower

carbon sources, with the Group targeting the

purchase of 50% of our energy requirements

from renewable sources by 2030. For more

information on the determination of the Group’s

scope 3 data, please see pages 70 and 71.

Total scope 1 and 2 CO

e emissions

tonnes

2023

2022

2021

22,422

18,859

24,042

Group climate policy and commitment

to the Paris Accords

The Board of Hunting has committed to the

principles published in the 2015 Paris Agreement,

which aims to limit the increase in global

temperatures. The Group’s Climate Policy can

be found at www.huntingplc.com.

Annual greenhouse gas emissions

To monitor the impact of Hunting’s operations

on the environment, and in compliance with UK

Company Law, the Group collates greenhouse

gas (“GHG”) data in accordance with the

principles of the Kyoto Protocol. Hunting is

committed to addressing environmental issues

and embedding a low carbon culture within our

Company. New facilities take into account

environmental impact considerations, including

protection from extreme weather events, such

as wind storms and ooding. The Company

discloses the breakdown of its GHG emissions,

to enable stakeholders to understand the overall

mix of emissions and the likely areas of emissions

reduction, as the Group continues to evolve its

initiatives to contain and reduce its carbon

footprint. The Company began a process to

independently assure its carbon data with a view

to setting science-based targets in the near future.

The Group submits its greenhouse gas data to

the Carbon Disclosure Project, which is available

at www.cdp.net. The data reported and the

carbon dioxide conversion factors used to report

the Group’s carbon footprint are based on those

published by BEIS and DEFRA in the UK

(www.defra.org.uk) and the International

Energy Agency.

e intensity factor

2023

2022

2021

30.9

36.2

25.9

For further information on Hunting’s climate, ESG

and wider sustainability efforts, please see pages

62 to 81.

Board engagement and

decision making – environment

The Board has continued to oversee the

development of carbon and climate initiatives,

which includes the assurance of its scope 1

and 2 greenhouse gas carbon data, utilising

the services of S&P Global.

The Board has also approved the work

stream to evaluate Hunting’s scope 3

greenhouse gas inventories, which will be

expanded further in 2024. Carbon data

management has been introduced into the

annual bonus objectives of the executive

Directors, as noted in the Annual Report

on Remuneration.

Tonnes CO

e 2023 2022

2019

(base line year)

Scope 1

Fuel consumption, including natural gas 2,037 2,411 4,128

Vehicle fuel consumption 3,575 3,367 2,972

Total scope 1 5,612 5,778 7,100

Scope 2

Electricity consumption 18,430 16,644 28,774

Total scope 1 and 2 24,042 22,422 35,874

Scope 3

Scope 3 (estimated) 353,346 277,143 n/a

Total scope 1, 2 and 3 377,388 299,565 n/a

Business Model continued

Hunting PLC Annual Report and Accounts 2023 38Strategic Report Corporate Governance Financial Statements Other Information

Governments and communities

Governments

Hunting’s global operating footprint extends

across 11 countries. As a consequence of this,

the Group interacts with a number of local

regulators, governments and tax authorities to

ensure that Hunting retains a good reputation

and business standing within each region of

operation and also seeks to comply with all

applicable and relevant local laws and

regulations. As a UK premium-listed public

company, the Financial Conduct Authority

(“FCA”) is the Group’s primary regulator. With

the assistance of the Group’s brokers and legal

advisers, the relationship with the FCA is closely

managed as and when relevant matters arise.

Each business unit retains a close relationship

with the relevant local tax and legal authorities.

Given the sensitivity of interacting with

government ofcials, with respect to the risk of

bribery, the Group’s internal procedures include

analysis of which customers and suppliers are

government-owned, with all external-facing

employees trained in the Group’s anti-bribery

and corruption policies.

Tax strategy

Hunting is committed to acting with integrity

and transparency in order to pay the right

amount of tax at the right time. Hunting’s tax

strategy is to fully comply with the tax laws,

regulations, and disclosure requirements in the

countries we operate in. Hunting may engage

with reputable professional rms on areas of

signicant complexity, uncertainty or materiality

to support it in complying with its tax strategy.

Hunting seeks to engage with tax authorities with

professionalism, honesty and respect. It works

with all tax authorities in a timely and constructive

manner to resolve disputes when they arise.

Hunting has a zero tolerance approach for tax

evasion and the facilitation of tax evasion.

Hunting’s Code of Conduct training course

includes training modules on this area to help

employees understand the risks and procedures

in this regard.

Board engagement and decision making

– governments

The Group’s tax governance is managed as

follows:

• The Board reviews Hunting’s tax strategy

and policies on an ongoing basis, with

regular updates on the tax position

provided at each Board Meeting;

• As part of the work of the Audit Committee,

tax matters are also monitored. Further

details can be found in the Audit Committee

Report on pages 155 to 159;

• Day-to-day matters are delegated to

Hunting’s Head of Tax and a small team

of in-house tax professionals who hold

a combination of accounting and tax

qualications;

• An annual review of our tax policies form

part of our internal Group Manual review

procedures; and

• Ongoing monitoring of tax legislation that

will impact us, including engaging specialist

advisers when appropriate.

Communities

The Board encourages community-focused

initiatives, with the Executive Committee

responsible for identifying local activities and

projects to support. This delegation allows

regional cultural practices to be taken into

account.

Local community sponsorships or charitable

donations are encouraged, following approval by

a member of the Board or Executive Committee.

Most businesses within the Group host “Open

House” days at facilities to allow customers,

suppliers, employees’ families and other members

of the local community to see our operations.

Community initiatives are regularly reported in the

Group’s magazine, the “Hunting Review”, which

proles the Group’s operations, employees and

community work.

For further reporting on community engagement,

see pages 76 and 77.

Board engagement and decision making

– communities

In December 2022, the Board agreed a new

policy on the use of unclaimed dividends

which had been returned to the Company.

On the recommendation of the Ethics and

Sustainability Committee, the Board has

agreed to donate to UK charities all

unclaimed dividends, with a small committee,

led by the Finance Director, agreeing the

charitable donations.

Business Model continued

Hunting PLC Annual Report and Accounts 2023 39Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON HUNTING TITAN

Perforating Systems

Hunting’s Perforating Systems technology platform and manufacturing

and distribution presence across North America has maintained a

market-leading position in this region for many years. The development

of intellectual property has formed a cornerstone of the Group’s

strategy to maintain this market position and in 2023, Hunting retained

185 patents over its Perforating Systems technologies.

With the introduction of the H-3™ and H-4™

Perforating Systems overthe past few years, the

Group has launched more efcient and higher

precision perforating technologies for its clients.

The Group isnow seeking to deploy perforating

systems, energetics charges, detonation cord,

instruments and other components to international

markets, with strong growth anticipated in South

America, the Middle East and China, where

modern perforating techniques are being adopted

in unconventional resource developments.

Introduction and market overview

The Group’s Perforating Systems business has

faced trading headwinds during 2023 as the

US onshore rig count weakened throughout the

year. The low point in this rig count was reached

in November 2023, with 616 active units in

operation, this being a reduction from 779 units

at the start of the year, which represents a decline

of 21% in 2023.

In Canada the rig count has been more stable

throughout the year, averaging 175 in the year,

which is broadly at compared to 2022.

Group nancial performance

Due to these market conditions, revenue from

this product line decreased by 3% to $243.8m

in 2023, compared to $251.9m in 2022. Within

this, international revenue grew by 33% as

efforts to globalise the Group’s technologies

accelerated.

EBITDA for the product line was $25.1m

compared to $27.3m in the prior year, giving an

EBITDA margin of 10% in 2023 compared to 11%

in 2022. The introduction of the H-4 Perforating

System™ occurred later in 2023. It is aimed at a

higher tiered market, which is expected to benet

revenue and prot margins as production ramps

up in 2024.

The Perforating Systems sales order book at

the year-end was $12.7m, compared to $18.7m

at the 2022 year-end. Perforating Systems does

not carry a large order book as the business

operates a ‘manufacture to stock’ model and is,

therefore, a short cycle business overall.

Intellectual property

Intellectual property based on the Group’s

Perforating Systems product group totalled 185

patents and 34 trademarks covering 50 products

and components.

Product Review

Hunting PLC Annual Report and Accounts 2023 40Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

251.9

181.7

243.8

2023

2022

2021

27.3

8.5

25.1

2023

2022

18.7

12.7

2023

2022

2021

879

590

845

2023

2022

2021

316.9

252.2

311.9

2023

2022

2021

13,033

11,419

12,966

Technology

The Group has continued to rollout the H-3

Perforating System™ to clients in the year and to

support the evolving perforating practices in the

US, the H-4 Perforating System™ was launched

in H2 2023. The H-4™ is a self-orienting system

that improves shooting accuracies.

Hunting also launched the Perf+ shooting panel,

which provides further system integration

between the gun and associated ring systems.

The Group sees further technology integration

in the future as in-eld operating efciencies

continue to be pursued.

The Group is also planning to introduce a new

high temperature switch, which can operate at

400ºF, as more complex unconventional resource

plays are pursued.

North America

To improve manufacturing margins and increase

efciencies, it was announced in August 2023

that the Oklahoma City operating site would

be closed, with production transferred to the

Monterrey and Pampa facilities, following

investment in new production equipment at

these locations. The Group has maintained

a distribution centre in Oklahoma to service

clients in the area.

In Canada, the Group invested in Pre-Loaded

Gun manufacturing capacity at the Grand Prairie

facility and intends to introduce this offering to

clients in 2024.

Both of these improvements are expected to

benet margins in 2024.

International

During the year, and as part of the short- to

medium-term strategy for the Group to increase

its international sales of perforating products

globally, Hunting increased component sales into

Argentina and Mexico, as onshore unconventional

resources are developed. The Group’s E-SUB™

perforating gun saw good demand in Saudi Arabia,

and is also seeing growth across Asia Pacic.

Hunting 2030 Strategy

The Group’s strategy for its Perforating

Systems product lines is twofold:

(1) to lead the further integration of perforating

technologies and ring instrumentation,

to enable increased safety and cost

efciencies to be captured within its core

North America market; and

(2) internationally, the Group will pursue a

strategy of growth, through the sales of

both systems and components, which

align with the individual needs of clients.

Product Review continued

Perforating Systems – revenue

North America footage drilled

mft

US frac jobs

Perforating Systems – EBITDA

North America onshore average rig count

Perforating Systems – sales order book

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Company

Non-GAAP Measure see NGM C

Hunting PLC Annual Report and Accounts 2023 41Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON OCTG

Product Review continued

Introduction and market overview

Hunting’s OCTG offering has made strong

progress during 2023 in all major regions across

the Group. This has been driven by the

continuation of the broad-based recovery in

activity, predominantly led by resurging offshore

and international drilling and development

expenditures. During the year, global oil and gas

capital investment increased by 11% from

$190.6bn in 2022 to $212.5bn. Global offshore

oil and gas capital investment has increased 28%

to $68.3bn in the year, while international capital

investment has increased 24% to $93.1bn. This

industry investment has driven the Group’s

OCTG sales growth in the year.

Group nancial performance

Revenue from the Group’s OCTG product lines

totalled $395.8m in 2023, compared to $258.8m

in 2022. This has been primarily driven by OCTG

contract wins within Asia Pacic for CNOOC and

Cairn Oil and Gas (Vedanta), in addition to well

completion work for ExxonMobil and

Schlumberger in South America.

EBITDA for the product line was $46.7m

compared to $16.2m in the prior year, giving an

EBITDA margin of 12% in 2023 compared to 6%

in 2022.

The OCTG sales order book at the year-end

was $222.0m compared to $196.5m at the 2022

year-end, which represents an increase of 13%

in the year.

North America

Hunting, including Hunting Titan OCTG, reported

good activity throughout the US and Canada in

the year, with revenue increasing by 26% from

$157.8m in 2022 to $198.5m in 2023. Strong

sales of the TEC-LOCK™ semi-premium

connection were reported in the US and robust

sales of the TKC4040™ connection in Canada.

The product group continued to work with

Chevron Gulf of Mexico in the year, utilising

Hunting’s SEAL-LOCK™ premium connection.

Sales of the Group’s WEDGE-LOCK™

connection also increased in the year, as more

offshore projects were sanctioned. While there

was some softening in demand in the second

half of the year in the US due to the declining

onshore rig count, the Group reports increased

revenue in the year across the region, compared

to 2022. A region of strong growth in the year

has been South America, where activity in Brazil,

Guyana and Suriname have provided a range

of opportunities for OCTG and supporting

accessories manufacturing. Of note has been

the success in Guyana, where well completion

activity for offshore developments accelerated

in the year.

Asia Pacic and EMEA

The Group’s Asia Pacic and EMEA OCTG

product groups reported an increase in revenue

from $101.0m in 2022 to $197.3m in 2023, an

increase of 95%.

OCTG

Hunting’s OCTG product group comprises sales from the Group’s

three major premium and semi-premium connection families:

SEAL-LOCK™, WEDGE-LOCK™ and TEC-LOCK™ and associated

accessories. These connections are applied to many oil and gas wells

and are directly applicable to geothermal and carbon capture projects.

Hunting PLC Annual Report and Accounts 2023 42Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

258.8

172.5

395.8

2023

2022

2021

16.2

(7.4)

46.7

2023

2022

196.5

222.0

2023

2022

2021

190.6

138.2

212.5

2023

2022

2021

1,706

1,323

1,767

2023

2022

2021

53.5

41.8

68.3

Activity in the North Sea has been subdued;

however, the Group’s EMEA facilities were busy

providing threading services for Tubacex, for

offshore projects in Brazil, with this work expected

to continue for at least the next two years.

Elsewhere in Europe, energy transition sales,

totalling $4.2m have been secured in the year,

for clients in the Netherlands. The Group’s OCTG

activities across the Middle East comprise sales

into Kuwait, Egypt and Saudi Arabia. In Saudi

Arabia, accessories manufacturing, coupled with

perforating systems sales, have supported

performance in the year.

In May 2023, the Group announced a $91m

three-year contract with Cairn Oil and Gas,

Vedanta Limited, for Hunting’s SEAL-LOCK™

premium connections. The contract is in support

of a 100 well programme in Rajasthan. The

Group also substantially completed the major

CNOOC contract in the year, which was awarded

in August 2022.

Through the Jindal Hunting Energy Services joint

venture, the Group commissioned its premium

threading facility in Nashik province, India, in

September 2023. The state-of-the-art facility has

three threading lines and has an annual capacity

of 60,000 tonnes of OCTG. The facility provides

the Group with early mover opportunities in the

country, given the government’s local content

requirements. In addition, during the year, the

Group captured work via Jindal SAW, including

premium threading and accessories

manufacturing contracts. The Group’s Asia

Pacic operating segment has also captured

sales in Africa and South East Asia for OCTG

and accessories manufacturing.

Supply chain

Hunting has entered into two key partnerships

in 2023 to secure important raw materials for its

energy transition growth ambitions.

The Group has secured a 10-year strategic alliance

with Jiuli in China to provide corrosion resistant

alloy (“CRA”) OCTG, which is key to geothermal

and carbon capture projects. This high-value

OCTG is rapidly being adopted due to the

temperature cycling in these projects. The Group

also entered into an agreement with CRA-

Tubulars to commercialise its novel titanium

composite tubular technology, which is also seeing

promise in energy transition projects, given its

lower weight and novel mechanical properties.

Hunting 2030 Strategy

As a major pillar of the Hunting 2030 Strategy,

the Group will continue to develop its premium

connection and OCTG technologies for oil

and gas and energy transition applications in

the coming years.

Within the Group’s oil and gas markets, strong

growth is anticipated in South America as

developments in Argentina, Brazil and Guyana

continue to accelerate.

Across Africa, key growth areas include

Namibia, Angola, Gabon and Nigeria. In the

Middle East opportunities in Northern Iraq,

Kuwait and Oman continue to be pursued.

Energy transition opportunities are most likely

to be delivered from North America, with the

US government support providing strong

incentives for decarbonisation projects to be

accelerated.

Short-term opportunities lie with geothermal

projects, while carbon capture and storage

projects are more towards the end of the decade.

Outside of the US, opportunities in Europe

and Asia Pacic, in particularly Indonesia and

the Philippines, for geothermal projects are

accelerating.

Product Review continued

OCTG – EBITDA

OCTG – revenue

OCTG – sales order book

Source: Company

Non-GAAP Measure see NGM C

Source: Company

Global drilling capital investment

$bn

Global average rig count

Global offshore capital investment

$bn

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Hunting PLC Annual Report and Accounts 2023 43Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON ADVANCED MANUFACTURING

Advanced Manufacturing

Hunting’s Advanced Manufacturing product lines serve oil and gas,

aviation, commercial space, defence, medical and power generation

markets. Hunting’s expertise is driven by its manufacturing know-how

and precision engineering skills for high-value, critical applications as

well as high temperature and pressure electronics applications.

The Electronics and Dearborn business units,

which comprise the majority of Hunting’s

Advanced Manufacturing offering, form the

foundation of the Group’s non-oil and gas sales

strategy, which is one of the core pillars of the

Hunting 2030 Strategy. Hunting’s offering of

complex, high-precision engineered products

provides clients with components that are used

in important mission-critical applications. The

businesses attract blue chip clients, based on

these skillsets and know-how and this forms the

basis of our sales diversication strategy.

Introduction and market overview

Hunting’s Advanced Manufacturing offering

reported good progress within in its core energy

markets as well as non-oil and gas markets,

including aviation, medical devices, naval and

power generation end-markets. The Electronics

business continued to report a strong oil and gas

revenue prole, driven by its expertise in MWD /

LWD downhole tools and printed circuit board

(“PCB”) assemblies as well as manufacturing

switches for Hunting Titan throughout the year.

Non-oil and gas sales have increased as more

defence-related work was captured with clients

including Cubic and Textron in the US.

The Dearborn business unit has also been

successful in developing its non-oil and gas

sales, in the sectors noted above, and has

developed a strong non-oil and gas sales order

book in the year.

Advanced Manufacturing markets, therefore,

are based on oil and gas capital investment,

which continues to be the foundation of both

the Electronics and Dearborn business units.

In addition, a further market indicator is the

overall level of defence spend by North America

and European governments. Both these

end-markets are likely tosee robust growth

to the end of the decade.

During the year, global industry capital

investment increased by 11% from $190.6bn

in 2022 to $212.5bn. Global offshore capital

investment has increased 28% to $68.3bn in

the year, while international capital investment

has increased 24% to $93.1bn. This industry

investment has driven the Group’s Advanced

Manufacturing sales growth in the year, coupled

with strong defence and medical markets.

Group nancial performance

Revenue from the Group’s Advanced

Manufacturing product lines totalled $112.1m

in2023, compared to $75.1m in 2022. $48.1m

of Electronics revenue related to the oil and gas

sector, which includes revenue from work for

Hunting Titan, and $8.3m was related to non-oil

and gas markets, and were predominantly

medical and defence-related sales. Dearborn’s

revenue of $14.0m related to the oil and gas

sector, while $42.7m related to non-oil and gas

sectors. Further detail on the performance of

the business units is noted below.

Product Review continued

Hunting PLC Annual Report and Accounts 2023 44Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

75.1

59.6

112.1

2023

2022

2021

0.9

0.7

10.7

2023

2022

137.6

161.5

2023

2022

2021

190.6

138.2

212.5

2023

2022

2021

1,706

1,323

1,767

2023

2022

2021

47.6

37.6

75.9

EBITDA for the product group was $10.7m

compared to $0.9m in the prior year, giving an

EBITDA margin of 10% in 2023 compared to

1% in 2022.

The Advanced Manufacturing sales order book

at the year-end was $161.5m compared to

$137.6m at the 2022 year-end, which represents

an increase of 17% in the year.

Advanced Manufacturing – Electronics

During 2023, the Electronics business unit

reported a strong ramp up in client orders,

as activity levels across the oil and gas sector

increased, with the demand for MWD/LWD tools

improving throughout the year.

Sales accelerated throughout the year as supply

chain constraints eased. However, the business

has spent the year, encouraging clients to place

orders early, given that certain components

remain on a 52+ week delivery time scale.

During the year, the business installed new

equipment, which enabled volumes to be

accelerated through the facility, but also to enable

the business to manufacture heavier assemblies

that had previously been completed by other

vendors. This new equipment also enables other

PCB applications to be pursued as part of the

wider Hunting 2030 Strategy to diversify its total

revenue streams to other high-value end-markets.

The Electronics business has seen strong order

ows from Halliburton, Schlumberger and Baker

Hughes in the year, as well as Hunting Titan as

a key internal customer. As noted above, the

business unit has been successful in progressing

defence-related sales growth, which is likely to

grow strongly in the medium term as defence

budgets are increased by Western governments.

Progress has also been made in the area of

medical devices, where sales have reached

$4.3m in 2023.

Advanced Manufacturing – Dearborn

The performance and productivity within the

Dearborn business unit has improved

dramatically from Q2 2023, following the easing

of some labour issues that impacted production

in 2022. The business also beneted from large

increases in facility throughput in the year. In the

early part of the year, the business commissioned

new equipment. These factors meant that it

outperformed management’s expectations

during the year.

The business continued to complete work for

clients such as Halliburton and other international

energy services groups in the year. The real

success of the business unit in the year has been

the increase in its non-oil and gas sales, as well as

its total sales order book, to end-markets such as

commercial space, defence and power generation.

The business increased work with Solar Turbines

in the year for turbine shafts, with Pratt and Whitney

for engine shafts; with Blue Origin for accumulator

cylinders; as well as SpaceX, where the Group

manufactures pistons for rocket landing legs.

Hunting 2030 Strategy

The Group’s non-oil and gas sales, including

the Advanced Manufacturing product group,

have increased 59% in the year from $47.6m

in 2022 to $75.9m in 2023. This result

demonstrates strong progress in the past

year and keeps Hunting on track to deliver

a meaningful diversication by 2030.

Product Review continued

Non-oil and gas revenue

(including Advanced Manufacturing)

Global average rig count

Global drilling capital investment

$bn

Advanced Manufacturing – EBITDA

Advanced Manufacturing – revenue

Advanced Manufacturing

– sales order book

Source: Company

Source: Spears and Associates Drilling and Production

Outlook – December 2023

Source: Spears and Associates Drilling and Production

Outlook – December 2023

Source: Company

Non-GAAP Measure see NGM C

Source: Company

Hunting PLC Annual Report and Accounts 2023 45Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON SUBSEA TECHNOLOGIES

Subsea

The Group’s Subsea product offering comprises three sub-groups:

(i) hydraulic valves and couplings, manufactured by the Stafford

business unit; (ii) titanium and steel stress joints, manufactured by

the Spring business unit and; (iii) ow access modules and ow

intervention systems, manufactured by the Enpro business unit.

Offshore drilling and production capital

investment has grown strongly in the past two

years, as operators have re-evaluated the

long-term, stable production and investment

proles offered by deepwater developments.

Further, the offshore segment of the industry has

shifted to a business model where end-user

operators are more willing to interact with

equipment providers further down the supply

chain, which has provided opportunities for

Hunting to bring its novel technologies into main

stream deepwater eld developments. This has

been an area of success for the Group’s titanium

stress joint offering, where Hunting has engaged

directly with operators ahead of contracts being

awarded in South America and the Turkish area

of the Black Sea.

Introduction and market overview

The Group’s Subsea businesses have reported

healthy growth during 2023, as new contract

wins coupled with strong investment in offshore

projects led to a notable increase in revenue and

EBITDA in the year.

Momentum within the Stafford business has

been driven by the demand for subsea trees,

which is a critical component of deepwater eld

developments and is a useful market indicator

of the ongoing demand for the Group’s hydraulic

valves and couplings.

The Spring business has seen huge success

in rolling out its titanium stress joint technology

to Floating Production, Storage and Ofoading

(“FPSOs”) vessels. The investment by clients,

such as ExxonMobil, in this technology application

has driven the increase in the Subsea sales

order book.

The Enpro business started the year slowly, but

from mid-year has won a number of large orders

as offshore-focused clients have accelerated

developments globally.

Global offshore capital investments have

increased 28% from $53.5m in 2022 to $68.3m

in 2023, with international growth being a key

driver in the year.

Group nancial performance

Based on this market environment, revenue in

the year totalled $98.6m in 2023, compared to

$69.0m in 2022, as strong momentum was

reported within the Stafford business unit,

with the Spring business unit continuing to

progress its larger orders for South America.

As noted above, the Enpro business had a

slower H1 2023, but its performance improved

in the second half of the year, as new orders

were commenced.

Product Review continued

Hunting PLC Annual Report and Accounts 2023 46Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

69.0

58.8

98.6

2023

2022

2021

3.4

4.7

13.7

2023

2022

105.1

152.2

2023

2022

2021

53.5

41.8

68.3

2023

2022

2021

189

165

207

2023

2022

2021

264

160

253

EBITDA for the product group was $13.7m

compared to $3.4m in the prior year, giving an

EBITDA margin of 14% in 2023 compared to

5% in 2022.

The order book closed 2023 at a very healthy

$152.2m, up from $105.1m at the end of 2022,

principally due to another large order for titanium

stress joints booked during the year.

Intellectual property

Intellectual property, patents and trade marks

totalled 186 in the year, covering 11 product lines

across the three major business units noted above.

North America

The Stafford and Spring businesses are both

located in Houston, Texas, but service

international offshore markets and customers,

ranging from South America to West Africa as

well as the Gulf of Mexico.

The Stafford business has seen strong demand

for its hydraulic coupling and valves in the year

from a range of international clients, including

Baker Hughes, TechnipFMC and ExxonMobil.

The Spring business has also seen the

development of a strong relationship with

ExxonMobil in recent years, as the business’s

titanium stress joints have become the preferred

technology for application to FPSOs in Guyana.

The business completed stress joints for vessels

bound for the YellowTail and Uaru developments,

with these contracts to be completed during

2024 and 2025. Work on the Whiptail project

will continue into 2026 after being awarded

in Q4 2023.

In October 2023, the Group also secured an

order with Subsea7 for titanium stress joints,

which are to be applied to an FPSO in the Black

Sea. This is a new client in a new region for

Hunting and the management team is delighted

that the Group’s stress joint technology is seeing

wider adoption.

Europe, Middle East and Africa

Enpro Subsea’s Flow Access Modules have

seen solid order wins during H2 2023, with clients

including Shell and LLOG. These contracts are

for the Gulf of Mexico and West Africa.

Hunting 2030 Strategy

Subsea is a key area for growth for the Group

to the end of the decade, with the industry

moving to more modular development plans,

along with more standardisation of eld

designs. This is to ensure total project costs

are contained.

The approach of operators to engage with a

wider number of suppliers within the offshore

supply chain provides opportunities for the

Group to leverage its technology and service

offering into large, turnkey projects, as

demonstrated with the success with

ExxonMobil since 2021.

As part of the Hunting 2030 Strategy, the

Group will invest in new technologies to build

the scale of Hunting’s subsea product offering,

and to capitalise on the renewed interest in

offshore projects.

Hunting sees acquisition opportunities in this

sub-segment of the market, to increase the

scale and products offered by the Group.

Product Review continued

Global offshore capital investment

$bn

Global offshore average rig count

Subsea – revenue

Global subsea tree demand

Subsea – EBITDA

Subsea – sales order book

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Company

Non-GAAP Measure see NGM C

Source: Company Source: Rystad Energy

Hunting PLC Annual Report and Accounts 2023 47Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON EMEA

Other Manufacturing

Hunting’s Other Manufacturing product group includes the Group’s

well intervention and well testing offerings, along with trenchless and

organic oil recovery businesses.

The well intervention business is serviced from

the Group’s North America, Europe and Asia

Pacic operations.

The Group’s European well testing business is

also incorporated into this product group, given

its differing business model and prole to the

other products groups. This business is more

focused on European and Middle East markets.

Hunting’s Trenchless business unit, which sells

drill stems, connections and drill pipe, is also part

of the Other Manufacturing product group and

forms part of the Group’s non-oil and gas sales.

The organic oil recovery business is focused

across EMEA, commercialising a licenced

technology to optimise reservoir performance

and recovery rates and extend the life of the well.

The Group’s exploration and production assets

also formed part of this product group and, as

noted elsewhere, were disposed of in the year,

leaving one asset at year-end.

Introduction and market overview

Hunting’s Other Manufacturing revenue is

predominantly based on oil and gas capital

investment, which reported good growth in the

year, supporting the sales growth noted below.

Sales of well testing and well intervention

equipment have increased in the year, as

broad-based investment across the industry

increased.

During the year, global industry capital

investment increased by 11% from $190.6bn

in 2022 to $212.5bn.

Hunting’s Trenchless business units reported

good sales growth as 5G roll out across the US

increased demand for its connections, drill stems

and drill pipe.

Product Review continued

Hunting PLC Annual Report and Accounts 2023 48Strategic Report Corporate Governance Financial Statements Other Information

2023

2022

2021

190.6

138.2

212.5

2023

2022

2021

1,706

1,323

1,767

2023

2022

15.1

16.8

2023

2022

2021

71.0

49.0

78.8

2023

2022

2021

4.2

(3.4)

6.8

Group nancial performance

Revenue from the Group’s Other Manufacturing

product lines totalled $78.8m in 2023, compared

to $71.0m in 2022.

EBITDA for the product line was $6.8m compared

to $4.2m in the prior year, giving an EBITDA

margin of 9% in 2023 compared to 6% in 2022.

The Other Manufacturing sales order book at

the year-end was $16.8m, which compares to

$15.1m at the 2022 year-end, and represents

an increase of 11% in the year.

Well intervention

2023 has seen a notable increase in the sale

and rental of well intervention equipment globally.

The product line has seen good revenue growth

across North America and Europe, beneting the

US Manufacturing and Aberdeen facilities.

Well testing

In the year, the well testing business delivered

another year of revenue growth, in-line with the

increase in capital investment across the industry.

Given the focus on the Middle East for this product

line, in August 2023 it was announced the two

facilities in the Netherlands were to be combined

into a single facility, with well testing assembly to

be transferred to Dubai, once the new, larger

manufacturing facility has been completed.

Organic oil recovery

The product continued to make progress in

2023, with new trials and eld pilots being agreed

or commenced by an increasing number of major

international energy businesses.

Trenchless

The Trenchless business reported another solid

year, supported by the ongoing rollout of 5G

across North America. Sales of connections, drill

stems and drill pipe have growth compared to

2022, with the outlook for 2024 also strong.

Exploration and production

As noted above, the Group sold all but one of its

remaining onshore and offshore assets in the

year to streamline Hunting’s business prole. The

assets were disposed of at net book value, with

Hunting being released from future plug and

abandonment liabilities.

Other Manufacturing – revenue

Other Manufacturing – EBITDA

Source: Company

Non-GAAP Measure see NGM C

Product Review continued

Global average rig count

Global drilling capital investment

$bn

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Source: Spears and Associates Drilling and

Production Outlook – December 2023

Other Manufacturing – sales order book

Source: Company

Hunting PLC Annual Report and Accounts 2023 49Strategic Report Corporate Governance Financial Statements Other Information

Operating Segment Review

Hunting Titan

2023 2022

Market indicators*

US onshore – average rig count # 670 705

Canada onshore – average rig count # 175 174

Revenue

Perforating $m 93.7 106.1

Energetics $m 70.0 69.7

Instruments $m 72.4 70.7

Perforating Systems $m 236.1 246.5

OCTG $m 6.1 3.5

Advanced Manufacturing $m 8.0 7.8

External revenue $m 250.2 257.8

Inter-segment revenue $m 9.0 8.2

Segment revenue $m 259.2 266.0

Protability

EBITDA** $m 21.9 24.7

EBITDA margin % 8 9

Operating prot $m 12.7 10.3

Adjusting items $m – 5.6

Adjusted operating prot** $m 12.7 15.9

Adjusted operating margin % 5 6

Other nancial measures

Inventory $m 140.5 122.6

Capital investment** $m 3.1 3.9

Operational

Headcount (year-end) # 622 656

Headcount (average) # 647 595

Operating sites # 4 5

Service and distribution centres # 14 12

Operational footage kft

659 651

* Source: Spears & Associates – December 2023 Drilling and Production Report

** Non-GAAP Measure (see pages 239 to 244)

Introduction

The Hunting Titan operating segment focuses

predominantly on the US and Canadian onshore

drilling and completion markets, but also services

international markets from its operating sites in

the US.

Hunting Titan has a network of distribution

centres throughout the US and Canada from

which the majority of the segment’s sales are

derived. Hunting Titan also utilises the global

manufacturing footprint of the wider Group to

assist in meeting customer demand and, during

the year, the Electronics business unit, which is

part of the North America operating segment,

continued to manufacture switches on behalf

of Hunting Titan.

Segment performance

Hunting Titan’s revenue streams are divided into

four sub-groups: (i) perforating; (ii) energetics;

(iii) instruments; and (iv) advanced manufacturing

and OCTG. Perforating gun sales decreased by

$12.4m in the year while energetics sales

remained at at $70.0m reecting the slower US

market. This was offset by an increase in

instrument sales of $1.7m compared to 2022.

Segment revenue was down 3% in 2023 at

$259.2m (2022 – $266.0m), as the decline in the

average WTI crude oil price, higher interest rates

and the lower average US rig count dampened

activity across North America during the year.

Offsetting this domestic performance, Hunting

Titan’s international sales increased from $33.6m

in 2022 to $45.0m in 2023, as demand for

perforating products increased within Asia

Pacic, the Middle East and South America.

EBITDA for the year was $21.9m (2022 – $24.7m)

leading to an EBITDA margin of 8% compared to

9% in 2022.

Operating prot for the year was $12.7m

(2022 – $10.3m), and given there were no

adjusting items in the year, the adjusted operating

prot was $12.7m (2022 – $15.9m). In 2022, the

adjusting item of $5.6m was in respect of legal fees

arising on defending a patent infringement claim.

Given the slower US onshore drilling market,

inventory levels within the segment increased

from $122.6m in 2022 to $140.5m in 2023.

Hunting Titan recorded capital investment of

$3.1m (2022 – $3.9m) mainly relating to new

equipment purchases for the Milford and

Pampa facilities, including further expansion

of detonation cord capacity.

The segment capitalised $2.2m (2022 – $1.0m)

research and development costs in the year. This

predominantly related to the development of the

H-4 Perforating System™ and new energetics

charges launched in the year.

Operating footprint and headcount

During the year, the Oklahoma City operating

site was closed, following the investment at the

Pampa and Monterrey operating sites. The

Group retains a distribution centre in Oklahoma

City to service clients in the immediate area.

During the year, the Group opened a distribution

centre in Grande Prairie, Canada to service

clients in this region with its H-4 Perforating

System™ and Pre-Loaded Guns.

At the year-end, Hunting Titan operated from

four operating sites and 14 distribution centres,

located in Canada, Mexico and the US.

Headcount within the segment decreased from

656 in 2022 to 622 in 2023, predominantly due

to the facility consolidation noted above.

Hunting PLC Annual Report and Accounts 2023 50Strategic Report Corporate Governance Financial Statements Other Information

Operating Segment Review continued

North America

2023 2022

Market indicators*

US onshore – average rig count # 670 705

US offshore – average rig count # 19 15

US – total drilling spend $bn 102.5 100.8

Canada onshore – average rig count # 175 174

Canada – total drilling spend $bn 16.8 14.8

Revenue

OCTG $m 192.4 154.3

Advanced Manufacturing $m 104.1 67.3

Other Manufacturing $m 42.8 34.5

External revenue $m 339.3 256.1

Inter-segment revenue $m 35.4 24.6

Segment revenue $m 374.7 280.7

Protability

EBITDA** $m 54.2 26.7

EBITDA margin % 14 10

Operating prot $m 34.1 9.2

Adjusting items $m – –

Adjusted operating prot** $m 34.1 9.2

Adjusted operating margin % 9 3

Other nancial measures

Inventory $m 107.8 90.4

Capital investment** $m 14.5 6.3

Operational

Headcount (year-end) # 900 818

Headcount (average) # 868 760

Operating sites # 10 10

Service and distribution centres # 2 2

Operational footage kft

1,142 1,136

* Source: Spears & Associates – December 2023 Drilling and Production Report

** Non-GAAP Measure (see pages 239 to 244)

Introduction

Hunting’s North America operating segment

incorporates the US and Canada OCTG

businesses, and the Dearborn and Electronics

businesses which form the majority of the

Group’s Advanced Manufacturing product lines.

The segment generates a large proportion of the

Group’s non-oil and gas sales, which includes

the Advanced Manufacturing group and the

Trenchless business unit that services the

telecommunications sector, which is reported

under ‘Other Manufacturing’.

Segment performance

Revenue within the North America operating

segment is derived from three primary product

groups being: (i) OCTG, which incorporates

premium connection and accessories

manufacturing; (ii) Advanced Manufacturing,

which incorporates the Electronics and Dearborn

business units; and (iii) Other Manufacturing, which

incorporates well intervention and trenchless sales.

The segment’s OCTG revenue has beneted from

strong well completion sales into Guyana and

Brazil during the year, as offshore developments

have accelerated throughout the period. Sales of

the Group’s TEC-LOCK™; SEAL-LOCK™ and

TKC4040™ connections have been strong as

activity in North and South America has

strengthened in the year, leading to a $38.1m

increase in revenue in 2023 compared to 2022.

The Electronics business reported good growth,

as traditional oil and gas sales, as well as medical

device, other non-oil and sales and inter-company

sales to Titan continued in the year. The Dearborn

business reported a strong improvement in

performance during 2023, as new equipment

was installed and efforts to increase non-oil and

gas revenue also were captured. Overall,

Advanced Manufacturing revenue increased by

$36.8m in the year compared to 2022.

Other Manufacturing revenue, increased by

$8.3m, supported by improving well intervention

sales and a steady performance from the

trenchless business unit.

Overall, segment revenue was up by 33% from

$280.7m in 2022 to $374.7m in 2023.

EBITDA for the segment was $54.2m

(2022 – $26.7m) as activity increased in all

product lines. This has led to an EBITDA margin

of 14% compared to 10% in 2022. Operating

prot and adjusted operating prot for the year

were $34.1m (2022 – $9.2m), as there were no

adjusting items in either year.

Inventory levels within the segment increased

from $90.4m in 2022 to $107.8m, as new orders

were commenced, particularly within the

Electronics and US Manufacturing businesses.

The North America operating segment recorded

capital investment of $14.5m (2022 – $6.3m)

mainly relating to new equipment purchases and

upgrades at the segment’s Dearborn and US

Manufacturing businesses.

The segment spent $4.1m (2022 – $4.3m) on

research and development in the year, including

spend to support the development and

qualication of premium connections for

application to geothermal and carbon capture

projects.

Operating footprint and headcount

During the year, the operating footprint of the

segment remained unchanged, with ten

operating sites and two distribution centres at

year-end. With the increase in activity reported

across most product lines, the headcount within

the segment increased from 818 in 2022 to 900

in 2023, predominantly within the Dearborn and

US Manufacturing (OCTG) sites.

Hunting PLC Annual Report and Accounts 2023 51Strategic Report Corporate Governance Financial Statements Other Information

Subsea Technologies

2023 2022

Market indicators*

Global offshore – average rig count # 207 189

Global offshore – total drilling spend $bn 68.3 53.5

Revenue

Stafford – Couplings and valves $m 42.1 34.1

Spring – Stress joints $m 49.1 25.0

Enpro – Flow access modules & Flow intervention systems $m 7.4 9.9

External revenue $m 98.6 69.0

Inter-segment revenue $m – –

Segment revenue $m 98.6 69.0

Protability

EBITDA** $m 13.7 3.4

EBITDA margin % 14 5

Operating prot (loss) $m 8.0 (8.1)

Adjusting items $m – 7.0

Adjusted operating prot (loss)** $m 8.0 (1.1)

Adjusted operating margin % 8 (2)

Other nancial measures

Inventory $m 25.4 18.3

Capital investment** $m 1.2 0.9

Operational

Headcount (year-end) # 196 155

Headcount (average) # 180 149

Operating sites # 3 3

Operational footage kft

188 188

* Source: Spears & Associates – December 2023 Drilling and Production Report

** Non-GAAP Measure (see pages 239 to 244)

Introduction

The Subsea Technologies operating segment was

formed on 1 January 2023 and comprises three

business units: (i) Stafford, which manufactures

hydraulic valves and couplings; (ii) Spring, which

manufactures titanium and steel stress joints;

and (iii) Enpro which manufactures ow access

modules and ow intervention systems.

These businesses occupy different parts of

the offshore / subsea equipment supply chain,

with customers ranging from tier one OEMs to

exploration and production companies.

The segment operates from three facilities, two

being located in the US and one in Scotland, UK.

Segment performance

With the increase in global offshore drilling spend

noted on pages 24 and 25, revenue with the

Subsea Technologies operating segment has

increased 43% in the year, from $69.0m in 2022

to $98.6m in 2023.

The Stafford business unit has reported an

$8.0m increase in revenue in the year, supported

by new deepwater developments being

progressed globally. The business reported

record levels of sales in October and November

2023, which were similar to revenue reported

in 2014, supporting the view that offshore

investment is a key area of development for

the global energy industry.

The Spring business unit has continued to grow

its market share in the supply of steel and titanium

stress joints for application to Floating Production,

Storage and Offtake vessels and in the year

revenue nearly doubled from $25.0m in 2022

to $49.1m in 2023.

The Enpro business unit reported a slow 2023,

with revenue decreasing by $2.5m in 2023

compared to the prior year. However, a number

of new orders were received in H2 2023, with the

unit nishing the year with the largest backlog in

its history.

EBITDA for the segment was $13.7m

(2022 – $3.4m) as key contracts were

progressed and operating efciencies were

improved on the back of increased volumes

and stronger pricing. This has led to an EBITDA

margin of 14% compared to 5% in 2022.

Operating prot for the year was $8.0m

(2022 – $8.1m loss). The adjusted operating

prot was $8.0m (2022 – $1.1m loss), with 2022

including a $7.0m adjustment for impairment of

goodwill in Enpro.

Inventory levels within the segment increased

from $18.3m in 2022 to $25.4m, as new orders

were commenced, particularly within the Spring

business unit.

During the year, the Subsea Technologies

operating segment recorded capital investment

of $1.2m (2022 – $0.9m) mainly relating to new

equipment purchases at the Stafford facility.

Operating footprint and headcount

During the year, the operating footprint of the

segment remained unchanged. The segment’s

Westhill operating site was merged into the

Group’s Badentoy, Aberdeen facility to save

overhead costs, in January 2024.

Headcount within the segment increased

from 155 in 2022 to 196 in 2023, reecting

the higher activity levels reported across the

operating segment.

Operating Segment Review continued

Hunting PLC Annual Report and Accounts 2023 52Strategic Report Corporate Governance Financial Statements Other Information

Operating Segment Review continued

EMEA

2023 2022

Market indicators*

Europe – average rig count # 96 74

Europe – spend $bn 15.8 14.1

North Sea – average rig count # 30 30

North Sea – spend $bn 14.5 13.0

Middle East – spend $bn 21.8 19.0

Revenue

OCTG $m 46.5 32.4

Perforating Systems $m 7.7 5.4

Other Manufacturing $m 32.5 31.5

External revenue $m 86.7 69.3

Inter-segment revenue $m 1.5 2.2

Segment revenue $m 88.2 71.5

Protability

EBITDA** $m 1.7 (2.1)

EBITDA margin % 2 (3)

Operating loss $m (2.3) (6.0)

Adjusting items $m – –

Adjusted loss** $m (2.3) (6.0)

Adjusted operating margin % (3) (8)

Other nancial measures

Inventory $m 28.1 23.6

Capital investment** $m 2.4 0.7

Operational

Headcount (year-end) # 270 247

Headcount (average) # 261 226

Operating sites # 7 7

Operational footage kft

279 236

* Source: Spears & Associates – December 2023 Drilling and Production Report

** Non-GAAP Measure (see pages 239 to 244)

Introduction

Hunting’s EMEA operating segment comprises

businesses in the Netherlands, Norway, Saudi

Arabia, UAE and UK. The segment provides

OCTG (including threading, storage and

accessories manufacturing) in the Netherlands,

Saudi Arabia and the UK. In the UAE the Group

operates an equipment assembly function for

well testing and intervention products as well as

a global sales ofce for all of the Group’s product

lines and operates a service and distribution

function in Norway. The Group’s operations in

Saudi Arabia are through a 65% joint venture

arrangement with Saja Energy.

Segment performance

Revenue within the EMEA operating segment is

derived from three primary product groups being:

(i) OCTG, incorporating premium connection and

accessories manufacturing; (ii) Perforating Systems,

supporting the sales of products on behalf of

Hunting Titan; and (iii) Other Manufacturing,

which incorporates well intervention, well testing

and organic oil recovery sales.

OCTG revenue has beneted strongly from the

Tubacex contract, which is for an offshore, deep

water project in Brazil. Within OCTG revenue,

$4.2m of sales have been derived from energy

transition / geothermal projects, which were

completed for clients in the Netherlands. OCTG

accessories revenue has also increased in Saudi

Arabia as activity in the country increased

throughout the year. Overall, OCTG revenue has

increased by $14.1m in 2023 compared to the

prior year.

Sales of Perforating Systems have also increased

in the year, as demand for Hunting Titan’s

components increased across the Middle East

and in Norway. Revenue from this product group

increased $2.3m in the year.

Other Manufacturing, which includes well

intervention sales and rental in addition to well

testing and organic oil recovery sales have

increased by $1.0m during the year to $32.5m.

This includes $1.0m of non-oil and gas revenue

for the sale of trenchless products.

EBITDA for the segment was $1.7m (2022 – $2.1m

loss) as the activity noted above increased across

most product lines. This has led to an EBITDA

margin of 2% compared to (3)% in 2022.

The operating loss and adjusted operating loss

narrowed to $2.3m loss (2022 – $6.0m loss).

There were no adjusting items in either year.

Inventory levels within the segment increased

from $23.6m in 2022 to $28.1m, as new orders

were commenced, particularly in respect of the

Tubacex contract.

During the year, the EMEA operating segment

recorded capital investment of $2.4m

(2022 – $0.7m) mainly relating to new equipment

purchases at the segment’s Badentoy facility.

Operating footprint and headcount

During the year, the operating footprint of the

segment remained unchanged, with seven

operating sites at the year-end.

In August 2023, the Group announced the

consolidation of facilities in the Netherlands from

two to one operating sites. Well testing assembly

is being transferred to the UAE, where a new

larger facility is currently being built and will be

opened towards the end of 2024.

The headcount within the segment increased

from 247 in 2022 to 270 in 2023.

Hunting PLC Annual Report and Accounts 2023 53Strategic Report Corporate Governance Financial Statements Other Information

Asia Pacic

2023 2022

Market indicators*

Far East – spend $bn 24.8 17.5

Middle East – spend $bn 21.8 19.0

Revenue

OCTG $m 150.8 68.6

Other Manufacturing $m 3.5 5.0

External revenue $m 154.3 73.6

Inter-segment revenue $m 3.3 6.8

Segment revenue $m 157.6 80.4

Protability

EBITDA** $m 11.5 (0.7)

EBITDA margin % 7 (1)

Operating prot (loss) $m 8.5 (3.4)

Adjusting items $m – –

Adjusted operating prot (loss)** $m 8.5 (3.4)

Adjusted operating margin % 5 (4)

Other nancial measures

Inventory $m 29.2 19.3

Capital investment** $m 2.2 2.6

Operational

Headcount (year-end) # 346 309

Headcount (average) # 324 301

Operating sites # 3 3

Operational footage kft

540 531

* Source: Spears & Associates – December 2023 Drilling and Production Report

** Non-GAAP Measure (see pages 239 to 244)

Introduction

Hunting’s Asia Pacic operating segment

covers three operating facilities across China,

Indonesia and Singapore and services

customers predominantly in Africa, Asia Pacic,

India and the Middle East.

In Singapore, Hunting manufactures OCTG

premium connections and accessories and well

intervention equipment. The Group’s Indonesia

facility also completes threading and accessories

work. In China, the Group operates from a facility

in Wuxi, which has OCTG threading and

perforating gun manufacturing capabilities.

Segment performance

Revenue within the Asia Pacic operating

segment is derived from two primary product

groups being: (i) OCTG, which incorporates

premium connection and accessories

manufacturing; and (ii) Other Manufacturing,

which incorporates well intervention

manufacturing.

Revenue increased signicantly in 2023, growing

by 96% to $157.6m, from $80.4m in 2022. This is

primarily due to OCTG product revenue which

has grown strongly during 2023, following the

signicant CNOOC order win which was secured

in August 2022, followed by a $91m order from

Cairn Oil and Gas, Vedanta Limited, which is a

three-year contract, and was announced in May

2023. Both contracts utilises China-sourced

OCTG, with Hunting applying its SEAL-LOCK™

premium connection technology to this pipe.

EBITDA for the segment was $11.5m

(2022 – $0.7m loss) due to a combination of the

increased activity, pricing and operating leverage.

This has led to an EBITDA margin of 7%

compared to (1)% in 2022.

Operating prot and adjusted operating prot for

the year was $8.5m (2022 – $3.4m loss), as there

were no adjusting items in either year.

Inventory levels within the segment increased

from $19.3m in 2022 to $29.2m, as new orders

were commenced, particularly in respect to the

CNOOC and Cairn Oil and Gas contracts.

During the year, the Asia Pacic operating

segment recorded capital investment of $2.2m

(2022 – $2.6m) mainly relating to new equipment

purchases at the segment’s Singapore and

Wuxi facilities.

Operating footprint and headcount

During the year, the operating footprint of the

segment remained unchanged, with three

operating sites at year-end.

The headcount within the segment increased

from 309 in 2022 to 346 in 2023, in support of

the large OCTG orders secured during the year.

India joint venture

The segment has Group oversight of the

Jindal Hunting Energy Services joint venture

in India, in which Hunting holds a 49% interest.

In September 2023, a state-of-the-art premium

connection threading facility was opened in

Nashik Province, which has capacity for 60,000

metric tonnes of OCTG per annum.

Operating Segment Review continued

FIND OUT MORE ON ASIA PACIFIC

Hunting PLC Annual Report and Accounts 2023 54Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review

The Group delivered strong operational performance in 2023 reporting

growth in revenue, operating prot and earnings, following a return

to protability in 2022. This was driven by heightened industry activity

and was achieved despite more subdued commodity prices during the

year, demonstrating the robust demand for the Group’s diverse portfolio

of products.

Financial performance measures

The following are nancial key performance indicators as identied on page 12.

2023

2022

Revenue 929.1 725.8

EBITDA (NGM C) 103.0 52.0

EBITDA margin

11% 7%

Adjusted prot before tax

(NGM B) 50.0 10.2

Adjusted diluted earnings per share – cents

(NGM B) 20.3c 4.7c

Free cash ow

iii

(NGM P) (0.5) (60.4)

Total cash and bank (NGM K) (0.8) 24.5

Dividend per share declared – cents (NGM Q) 10.0c 9.0c

Sales order book (note 23) 565.2 473.0

Financial performance measures derived from IFRS

2023

2022

Operating prot 61.0 2.0

Prot/(loss) before tax 50.0 (2.4)

Diluted earnings/(loss) per share – cents 70.0c (2.8)c

Net cash inow/(outow) from operating activities 49.3 (36.8)

i. EBITDA as a percentage of revenue.

ii. Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results

reect adjusting items determined by management, which are described in Non-GAAP Measures (“NGM”) on pages 239 to 244.

iii. Free cash ow in 2022 has been restated to include capital investment and intangible asset investment, see NGM P for further details.

FIND OUT MORE FROM FINANCE DIRECTOR,

BRUCE FERGUSON

Hunting PLC Annual Report and Accounts 2023 55Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

Overview

Group revenue increased by 28% in 2023 to

$929.1m, from $725.8m in 2022, buoyed by

market momentum, notably in South America

and Asia Pacic where drilling activity improved.

All operating segments delivered growth in

revenue, with the exception of Hunting Titan

where demand for Perforating Systems was

impacted by a reduction in the North American

rig count. There was particularly strong growth

in the North America and Asia Pacic operating

segments where demand for the Group’s

OCTG products accelerated in response to the

increased activity in these regions. The newly

formed Subsea Technologies operating segment

beneted from growth in offshore drilling activity

and the continued progress in sales of its titanium

and steel stress joints. Additionally, in North

America the Group’s Advanced Manufacturing

businesses reported strong revenue growth

including the expansion of non-oil and gas sales,

which now account for 8% of total Group

revenue, up from 7% in 2022.

Gross margin improved by one percentage point,

increasing to 25%, primarily from improvements

in the Advanced Manufacturing and Subsea

product groups.

With increased efciencies and improved operating

leverage, operating expenses as a percentage of

revenue improved from 23% to 18%, and EBITDA

nearly doubled compared to 2022, and at

$103.0m (2022 – $52.0m) represents an EBITDA

margin of 11%, up from 7% in 2022.

The Group’s activities were further streamlined in

2023 with the disposal of Hunting’s legacy oil and

gas production assets, together with the closure

of the Oklahoma manufacturing facility in the US.

In 2024, further efciencies will be gained with

the consolidation of facilities in the Netherlands.

The improvement to EBITDA has driven operating

prot performance, and also the adjusted diluted

earnings per share, which at 20.3 cents, compared

to 4.7 cents in 2022, improved by 332%.

Cash generation has been a focus as revenue

growth through 2022 and 2023 has placed

demands on increased levels of working capital.

This focus can be seen in the cash performance

of the Group in the second half of 2023. While

working capital (NGM E) increased during the

year from $362.8m in 2022 to $415.9m, it has

reduced by $30.0m during H2 2023.

The Company’s denition of free cash ow has

been revised in 2023 and now includes capital

investment and intangible asset investment. Free

cash outow in 2023 was $0.5m, compared to

a $60.4m outow in the prior year. Of note was

the $59.0m inow delivered in the second half

of the year. Total cash and bank nished the year

at $(0.8)m, following the movements noted above.

There is more work to do to further improve our

working capital efciency and overall cash

generation, and this is a priority for 2024.

The balance sheet at the end of 2023 was

strong. There was an increase in non-current

assets following continued capital and intangible

asset investment in the Group of $34.6m

(2022 – $22.0m) to support the growth outlook.

As part of the year-end procedures and following

detailed analysis, the Group has recognised

$83.1m of previously unrecognised deferred tax

assets in the US, driven by the increased forecast

protability across the US businesses.

Whilst capital employed was up, protability grew

by a greater extent, resulting in an improvement

in return on average capital employed from 1%

in 2022 to 6% in 2023 (NGM S).

Cash returns to shareholders also increased

during the year to $15.0m (2022 – $13.6m) and,

following the strong performance of the Group

in the year, the Board has proposed an increase

in the full year dividend of 11% to 10.0 cents

per share.

Hunting is well positioned for 2024 and beyond,

with a record sales order book of $565.2m at

the year-end, compared to $473.0m in 2022,

following material OCTG and Subsea order wins.

It is expected that $444.5m of the order book will

be recognised as revenue in 2024.

Operating results

Revenue

Revenue for 2023 increased by 28% to $929.1m

(2022 – $725.8m) reecting the accelerated

industry activity during the year, particularly in

South America, as drilling in Guyana and Brazil

expanded, and in Asia Pacic, where drilling in

India and the Middle East gathered momentum.

Performance was particularly strong within the

North America, Subsea Technologies and Asia

Pacic operating segments driven by growth in

the OCTG, Subsea and Advanced Manufacturing

product lines, partially offset by some softness in

Hunting Titan’s perforating systems sales, due

in part to a reduction in the North American rig

count. There was also growth in non-oil and gas

revenue of 59% from $47.6m in 2022 to $75.9m

in 2023.

Gross prot

Gross prot for the year increased to $227.7m

compared to $171.4m in 2022 driven by higher

revenue and facility utilisation, leading to a better

absorption of overheads. Gross margin was

25% in the year (2022 – 24%) as product mix,

increased pricing and higher utilisation of facilities

provided a healthier drop through to prot.

Summary Group operating results

2023

2022

Revenue 929.1 725.8

Cost of sales (701.4) (554.4)

Gross prot 227.7 171.4

Selling and distribution costs (49.3) (46.1)

Administrative expenses (119.8) (124.9)

Net operating income and other expenses 2.4 1.6

Operating prot 61.0 2.0

Adjusting items

(NGM A) – 12.6

Adjusted operating prot

(NGM B) 61.0 14.6

EBITDA (NGM C) 103.0 52.0

Diluted earnings/(loss) per share – cents (note 10) 70.0c (2.8)c

Adjusted diluted earnings per share – cents

(NGM B) 20.3c 4.7c

i. Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results

reect adjusting items determined by management, which are described in Non-GAAP Measures (“NGM”) on pages 239 to 244.

Hunting PLC Annual Report and Accounts 2023 56Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

Operating prot

Following the charges for selling and distribution,

administration, and other net operating income

and expenses totalling $166.7m (2022 – $169.4m),

operating prot in 2023 was $61.0m compared

to $2.0m in 2022.

Selling and distribution costs increased by

$3.2m to $49.3m (2022 – $46.1m) reecting

the increased level of activity across the Group.

Administrative expenses were down from

$124.9m in 2022 to $119.8m in 2023. 2022

included $12.6m relating to one-off adjusting

items, see below. Excluding these items, the 7%

increase in administrative expenses reects

further investment in support functions and

infrastructure to underpin the growth agenda.

Prot/(loss) before tax

Net nance expense amounted to $10.4m

(2022 – $1.7m) with the higher expense reecting

the interest paid on the utilisation of the Asset

Based Lending (“ABL”) facility during the year.

The Group’s share of associates’ and joint

ventures’ results in the year was a loss of $0.6m,

reduced from a loss of $2.7m in 2022, reecting

an improved performance within Rival Downhole

Tools. With the mobilisation of the joint venture

with Jindal SAW during the year, the Group’s

share of associates’ and joint ventures’ results

will be presented within operating prot and

EBITDA from 1 January 2024.

Following these charges, the Group’s prot

before tax was $50.0m (2022 – $2.4m loss).

Taxation

The tax credit for the year was $69.0m

(2022 – $1.3m charge) resulting in an effective

tax rate (“ETR”) of (138)% compared to (54)%

in 2022.

The adjusted ETR provides a more meaningful

comparison of the year-on-year position, which is

discussed below. The Group’s ETR is signicantly

different to that which might be expected when

applying the weighted average tax rate of 23%

to the prots made by the Group. The main driver

of this difference relates to an adjusting tax credit

of $83.1m that arose from the recognition of

previously unrecognised deferred tax assets in

the US. Due to the increased protability in the

region, the criteria for the recognition of the

deferred tax assets was met in the period.

Prot/(loss) for the year

Following the tax, the prot for the year was

$119.0m (2022 – $3.7m loss), with a prot of

$117.1m (2022 – $4.6m loss) attributable to

Hunting’s shareholders.

Earnings/(loss) per share

Diluted earnings per share were 70.0 cents, up

from a 2.8 cents loss per share in 2022. There

were 167.3m (2022 – 170.1m) weighted average

Ordinary shares in issue, inclusive of all dilutive

potential Ordinary shares.

Non-GAAP prot measures

The Board continues to monitor the Group’s

progress using adjusted protability measures

and reviews and approves the adjusting items

proposed by management, as the Group believes

these adjusted measures aid the comparison of

the Group’s operating performance from one

period to the next. The Group’s adjusted trading

results have been highlighted throughout this

review, with reconciliations between the statutory

and adjusted results detailed in NGM B. The

denition and calculation of a range of other

NGMs including EBITDA, total cash and bank,

working capital, free cash ow and ROCE can

be found on pages 239 to 244.

EBITDA of $103.0m nearly doubled compared

to $52.0m in 2022, demonstrating the

increased strength of global energy markets

and the overall demand for the Group’s diverse

product portfolio. As a result, EBITDA margin

improved to 11% (2022 – 7%). The denition

and calculation of EBITDA is shown in NGM C.

There were no adjusting items impacting

operating prot in 2023. Therefore, adjusted

operating prot and adjusted prot before

tax were the same as the corresponding

statutory results.

In 2022, following the annual review of goodwill,

an impairment charge of $7.0m was recognised

in relation to Enpro Subsea. Hunting also

incurred legal fees of $5.6m defending a claim

made by a competitor against the Group

relating to a patent infringement. These

adjustments, which impacted operating prot,

totalled $12.6m. For further information, please

see NGM A.

Adjusted operating prot in 2022 was $14.6m

after adding back the adjusting items of $12.6m,

which equated to an adjusted prot before tax

of $10.2m. Adjusted operating margin in 2023

was 7% compared to 2% in 2022.

There was one adjusting item in 2023 relating

to the tax credit of $83.1m in relation to the

recognition of US deferred tax assets in the

year. As detailed in NGM D, the adjusted tax

charge for the year was, therefore, $14.1m,

with an adjusted ETR of 28% (2022 – 13%).

The impact on diluted earnings per share of

the adjustment to the tax charge was a

reduction of 49.7 cents per share to 20.3 cents

(2022 – 4.7 cents) for the year.

With revenue growth

combined with increased

efciencies and improved

operating leverage, EBITDA

nearly doubled to $103.0m.

Revenue

$929.1m

(2022 – $725.8m)

Operating prot

$61.0m

(2022 – $2.0m)

Hunting PLC Annual Report and Accounts 2023 57Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

Operating segment, product

line nancial data and sales

order book

The Hunting business is organised and managed

by segment but has a consistent product

structure that runs across the organisation.

In order to provide better insight and visibility,

management has provided additional information

for revenue and EBITDA by product group, which

claries the relationship between Hunting’s

operating segments and key product groups.

The Group’s sales order book has increasingly

become a more meaningful measure for

shareholders to monitor the Company’s

trading outlook.

Management therefore presents below the sales

order book of the Group, as at 31 December

2023, by operating segment and product group

to assist in the outlook for the medium term.

The sales order book comprises the value

of all unsatised orders from customers and is

expected to be recognised as revenue in future

periods. The sales order book represents the

aggregate amount of the transaction price

allocated to partially or fully unsatised

performance obligations, as dened in IFRS 15

Revenue from Contracts with Customers

(note 23).

Segmental operating results

2023 2022

Revenue

EBITDA

Adjusted

operating

result

Sales

order

book

Revenue

EBITDA

Adjusted

operating

result

Sales

order

book

Hunting Titan 259.2 21.9 12.7 20.3 266.0 24.7 15.9 33.0

North America 374.7 54.2 34.1 298.8 280.7 26.7 9.2 251.7

Subsea Technologies 98.6 13.7 8.0 152.2 69.0 3.4 (1.1) 105.1

EMEA 88.2 1.7 (2.3) 31.1 71.5 (2.1) (6.0) 35.1

Asia Pacic 157.6 11.5 8.5 142.8 80.4 (0.7) (3.4) 110.4

Inter-segment elimination (49.2) – – (80.0) (41.8) – – (62.3)

929.1 103.0 61.0 565.2 725.8 52.0 14.6 473.0

i. EBITDA is a non-GAAP measure, see NGM C.

ii. Results are presented on a statutory basis as reported under UK adopted International Financial Reporting Standards. Adjusted results reect adjusting items determined by management, which are described in

NGM A.

Results by product group

2023 2022

Revenue

EBITDA

Sales

order

book

Revenue

EBITDA

Sales

order

book

Perforating Systems 243.8 25.1 12.7 251.9 27.3 18.7

OCTG 395.8 46.7 222.0 258.8 16.2 196.5

Advanced Manufacturing 112.1 10.7 161.5 75.1 0.9 137.6

Subsea 98.6 13.7 152.2 69.0 3.4 105.1

Other Manufacturing

78.8 6.8 16.8 71.0 4.2 15.1

929.1 103.0 565.2 725.8 52.0 473.0

i. EBITDA is a non-GAAP measure, see NGM C.

ii. Other Manufacturing now includes the previously disclosed Well Intervention product group.

The Group sales order book continued to grow

and was a record $565.2m at 31 December

2023, up 19% from $473.0m at 31 December

2022, following several material order wins within

the Subsea and OCTG product groups.

The sales order book comprises 2% Perforating

Systems (2022 – 4%); 39% OCTG (2022 – 42%);

29% Advanced Manufacturing (2022 – 29%);

27% Subsea (2022 – 22%) and 3% Other

Manufacturing (2022 – 3%).

Of this order book, approximately 79% is

expected to be recognised as revenue in 2024,

10% during 2025 and 11% from 2026 onwards,

underlying the changing prole of Hunting’s

revenue visibility.

Detailed commentary on the nancial

performance of each operating segment

can be found on pages 50 to 54.

Detailed commentary on the nancial

performance of Hunting’s product groups

can be found on pages 40 to 49.

Group funding

The Group’s primary source of funding is through

the $150.0m Asset Based Lending (“ABL”) facility,

which is in place until February 2026.

An accordion feature of up to $50.0m has also

been agreed and providing there is lender

support to do so at the appropriate time, this

feature allows the Company to increase the total

facility quantum to $200.0m.

The ABL was drawn down during 2023 due to

investment in working capital to support the

increased activity. The closing ABL borrowing

position was $44.9m and, together with bank

overdrafts of $1.4m, was offset by $45.5m of

cash held across the Group. Of this cash holding,

$24.3m is in China.

Hunting PLC Annual Report and Accounts 2023 58Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

reecting the changing product mix, with OCTG

typically having slightly longer payment terms

than Perforating Systems. Payables days have

remained consistent moving from 50 days to 49

days (NGM H). In addition, Hunting has reduced

its payments on account to suppliers from

$23.7m in 2022 to $12.4m at the end of 2023,

and increased its advances from customers from

$8.8m in 2022 to $31.0m at the end of 2023.

During the year, the Group’s leasing

arrangements gave rise to cash payments of

$10.4m (2022 – $8.0m), with the majority of the

increase attributable to a one-off payment made

to exit a lease for a surplus property in Canada.

Summary Group cash ow statement

2023

2022

EBITDA (NGM C) 103.0 52.0

Add: share-based payment expense 13.5 9.9

116.5 61.9

Working capital movements (NGM M) (55.0) (86.6)

Lease payments (10.4) (8.0)

Net interest and bank fees paid (7.3) (2.9)

Net tax paid (9.1) (3.9)

Capital investment (NGM N) (23.7) (16.4)

Intangible asset investment (10.9) (5.6)

Proceeds from asset disposals 1.9 9.0

Net gains on asset disposals (1.7) (2.8)

Legal fees to defend patent infringement claim – (5.6)

Other operating and non-cash movements (NGM O) (0.8) 0.5

Free cash ow (NGM P) (0.5) (60.4)

Investment in associates and joint ventures (1.6) (3.5)

Dividends received from associates 0.6 –

Dividends paid to equity shareholders (15.0) (13.6)

Net purchase of treasury shares (8.7) (7.7)

Net cash ow (25.2) (85.2)

Foreign exchange (0.1) (4.5)

Movement in total cash and bank (note 26) (25.3) (89.7)

Opening total cash and bank 24.5 114.2

Closing total cash and bank (NGM K) (0.8) 24.5

i. Free cash ow in 2022 has been restated to include capital investment and intangible asset investment, see NGM P for further details.

The collateral reporting cycle for the period

ending 30 November 2023, which determined

availability under the ABL facility at 31 December

2023, delivered applicable asset values amounting

to $151.1m (2022 – $158.0m). The difference

between the total facility quantum available to

the Group under the ABL (i.e. $150.0m) and the

applicable asset values was $1.1m (2022 – $8.0m).

This suppressed availability represents the

amount of over collateralisation provided by the

Group and means that the entire $150.0m

remains available for utilisation by the Group.

It is management’s view that the ABL remains

resilient and continues to provide a strong

foundation on which the strategic growth

aspirations of the Group may be established.

Further details relating to the ABL and the other

facilities, as well as information on the Group’s

nancial risk management are disclosed in

note 30.

Consideration of the likelihood that the Group will

require access to the facilities, or any other sources

of external funding, to support our existing

operations in the next 12 months are covered in

the going concern assessment on page 107.

Cash ow

After adding non-cash share-based payment

charges back to EBITDA, the resulting cash

inow in 2023 was $116.5m (2022 – $61.9m).

The outow relating to working capital in 2023

was $55.0m (2022 – $86.6m) reecting the

continued growth in activity across the Group.

Hunting is measuring balance sheet efciency

using working capital as a percentage of

annualised revenue.

Whilst signicant progress was made in the

second half of 2023, with working capital

reducing by $30.0m, our closing ratio as a

percentage of annualised revenue of 46% is

slightly down on the position at the end of 2022

of 44% (NGM E).

Supporting measures of working capital have

also been a focus. Inventory days moved from

159 days at 31 December 2022 to 175 days at

31 December 2023 (NGM F), reecting inventory

build in support of both the current order book,

and in Titan for future orders. Receivables days

have increased slightly to 89 days compared

to 84 days at 31 December 2022 (NGM G)

The Group sales order

book grew by 19%

and was a record at

31 December 2023.

Sales order book

$565.2m

(2022 – $473.0m)

Hunting PLC Annual Report and Accounts 2023 59Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

Legal fees of $5.6m were paid in 2022 to

defend the Group against a patent infringement

claim made by a competitor. There were no

corresponding fees in 2023.

The resulting free cash outow was $0.5m,

compared to a free cash outow in 2022

of $60.4m.

During the year, the Group made a further

investment in Cumberland Additive totalling

$1.6m, following the $1.6m invested in 2022. In

2022, the Group also invested $1.9m in the joint

venture with Jindal SAW in India to support the

development of the new threading facility which

opened in the second half of 2023. Hunting also

received a $0.6m distribution from an associate

during 2023.

There were increased returns to shareholders

in 2023 with dividends paid to Hunting PLC

shareholders amounting to $15.0m (2022 – $13.6m).

During the year, 2.9m Ordinary shares

(2022 – 2.1m Ordinary shares) were purchased

as treasury shares through Hunting’s Employee

Benet Trust for a total consideration of $9.0m

(2022 – $7.9m). These shares will be used to

satisfy future awards under the Group’s share

award programme. This was offset by $0.3m

(2022 – $0.2m) received on the disposal of

treasury shares.

Overall, the Group recorded a net cash outow

of $25.2m (2022 – $85.2m), which was

predominantly driven by the absorption of cash

into working capital, as noted above.

As a result of the above cash outows and

$0.1m foreign exchange losses (2022 – $4.5m),

total cash and bank was $(0.8)m (NGM K) at

the year-end (31 December 2022 – $24.5m).

Balance sheet

Property, plant and equipment was $254.5m at

31 December 2023 (2022 – $256.7m) following

additions of $23.1m and other items of $2.7m,

offset by depreciation of $27.2m and disposals

of $0.8m. Capital investment during the year

was made to support the growth agenda.

Right-of-use assets totalled $26.2m at

31 December 2023 compared to $26.0m at

31 December 2022.

Goodwill was largely unchanged at $154.4m

(2022 – $155.5m) with impairment and foreign

exchange movements totalling $1.1m.

Other intangible assets increased by $5.1m to

$40.8m at 31 December 2023. Additions of

$10.9m on internal development of new products

at Hunting Titan as well as on software and IT

data centres, and favourable foreign exchange

movements of $0.8m were offset by amortisation

charges of $6.6m.

Investments in associates and joint ventures

increased by $0.4m, reecting a further

investment in Cumberland Additive of $1.6m,

offset by the Group’s share of associates’ and

joint ventures’ losses for the period of $0.6m and

the receipt of a $0.6m distribution. The Group’s

share of post-tax prot of its material associate,

Rival Downhole Tools, was $1.4m in 2023

(2022 – $1.6m loss).

Working capital (NGM E) increased by $53.1m

to $415.9m, in-line with the growth in activity

in the business. Inventory levels grew by $58.8m

to $380.9m but inventory provision levels

remained broadly at at $52.5m supported by

the growth outlook.

Net interest and bank fees paid in the period

were higher at $7.3m (2022 – $2.9m), mainly

due to interest paid on the borrowings under

the ABL facility. 2022 included $3.0m relating

to ABL fees paid, which were capitalised on

the balance sheet.

Net tax payments of $9.1m were made in 2023

(2022 – $3.9m), reecting the Group’s improved

operating results during the year.

We continued to invest in the business with

capital investment in the year totalling $23.7m

(2022 – $16.4m). Hunting Titan spent $3.1m,

mostly on new plant and machinery; $14.5m

was in North America, with $6.1m spent by

Dearborn and $4.5m spent by US Manufacturing

on new machines and upgrades; $1.2m was

in Subsea Technologies on new machines;

$2.4m was in EMEA; $2.2m by Asia Pacic;

and $0.3m centrally.

Intangible asset investments in the year were

$10.9m (2022 – $5.6m), with $7.0m incurred on

software and the continued roll out of the D365

ERP system, and $2.2m by Hunting Titan on

internally generated technology.

Proceeds from the disposal of assets totalled

$1.9m (2022 – $9.0m). In 2022, net proceeds

comprised a net $5.0m received following the

sale of a property in Casper, Wyoming and a net

receipt of $2.4m to exit the leased property at

Benoi Road in Singapore.

Gains on asset disposals of $1.7m (2022 – $2.8m)

relate to gains on the disposal of property, plant

and equipment including the disposal of legacy

oil and gas exploration and development assets.

Summary Group balance sheet

2023

2022

Property, plant and equipment 254.5 256.7

Right-of-use assets 26.2 26.0

Goodwill 154.4 155.5

Other intangible assets 40.8 35.7

Investments in associates and joint ventures 20.5 20.1

Working capital (NGM E) 415.9 362.8

Taxation (current and deferred) 82.7 4.0

Provisions (7.5) (8.9)

Other net assets 3.0 4.3

Capital employed (NGM J) 990.5 856.2

Total cash and bank (NGM K) (0.8) 24.5

Lease liabilities (28.7) (30.6)

Shareholder loan from non-controlling interest (3.9) (3.9)

Net debt (note 26) (33.4) (10.0)

Net assets 957.1 846.2

Hunting PLC Annual Report and Accounts 2023 60Strategic Report Corporate Governance Financial Statements Other Information

Group Financial Review continued

Net tax assets on the balance sheet were

$82.7m at 31 December 2023 compared to

$4.0m in the prior year. Net tax assets have

risen signicantly as a result of the recognition

of previously unrecognised deferred tax assets

in the US, reecting improved prot expectations

in the region.

As a result of the above changes, capital

employed in the Group increased by $134.3m

to $990.5m. The return on average capital

employed was 6% in 2023 compared to 1%

in 2022 (NGM S).

Net debt (note 26) at 31 December 2023

was $33.4m (31 December 2022 – $10.0m),

a signicant improvement on the position

reported at half year of $82.3m due to strong

cash generation in the second half. The closing

position is a result of working capital outows

reecting the strong trading environment and

increased sales order book, as described above.

Net debt includes $28.7m of lease liabilities,

which have decreased by $1.9m during the year

due to lease payments being made.

Dividend

A Final Dividend of 5.0 cents per share

(2022 – 4.5 cents) has been proposed by the

Board, making the total dividends declared for

the year ending 31 December 2023 10.0 cents

per share (2022 – 9.0 cents per share), an

increase of 11% over 2022. Subject to

shareholder approval at the 2024 Annual General

Meeting, the Final Dividend will be paid on 10

May 2024. This distribution will amount to an

estimated cash return of $7.9m (2022 – $7.1m).

The dividend will be paid in Sterling with the

Sterling value of the dividend payable per share

xed and announced approximately two weeks

prior to the payment date, based on the average

spot exchange rate over the three business days

preceding the announcement date. The dividend

will be paid to those shareholders on the register

at the close of business on 12 April 2024, with

an ex-dividend date of 11 April 2024.

Bruce Ferguson

Finance Director

29 February 2024

Hunting PLC Annual Report and Accounts 2023 61Strategic Report Corporate Governance Financial Statements Other Information

ESG and Sustainability

Our approach

Hunting is committed to operating responsibly, ethically and

sustainably to create long-term value by rmly embedding these

principles into our strategy and culture. We are committed to

relevant and transparent disclosures and continue to improve our

ESG-related reporting procedures, aligning these with current

and new disclosure regulations and standards and the needs

of our stakeholders.

ESG disclosures

• We continue to report in line with the SASB

standards most relevant to our business:

SASB Oil & Gas – Services and Industrial

Machinery & Goods standards. Our SASB

content index may be found on pages 80

and 81.

• We have adopted and report against the Task

Force on Climate-related Financial Disclosure

(“TCFD”) standard. See pages 82 to 95.

• We make an annual submission to the Carbon

Disclosure Project, which can be reviewed at

www.cdp.net.

• Our annual Modern Slavery Act Statement,

which is approved by the Board, is available

on our website at www.huntingplc.com.

• As a publicly-listed company providing

products and services primarily to the oil

and gas sector, we annually disclose the

Payments made to Governments on a

country-by-country and project-by-project

basis under the Payments to Government

Regulation 2015. This is available at

www.huntingplc.com.

We also highlight our contribution to the UN

Sustainable Development Goals (“SDGs”). We

have identied SDGs 3, 5, 6, 7, 8, 9, 12, 13 and

17 as the ones to which we can make the most

positive contribution.

Hunting PLC Annual Report and Accounts 2023 62Strategic Report Corporate Governance Financial Statements Other Information

Focus on material issues

In 2023, we again undertook a materiality

assessment to guide our ESG framework and

disclosures. For the rst time we adopted a

‘double materiality approach’, considering:

• Impact materiality, that is the actual or

potential, positive or negative impacts of the

business on people or our environments over

the short, medium or long term; and

• Financial materiality, that is whether an issue

may be material from a nancial perspective,

and could potentially trigger nancial effects on

Hunting, either as a risk or opportunity, in the

short, medium or long term.

Our process involved:

• An assessment of new and impending

reporting disclosure regulations and standards;

a review of peer reporting; and an analysis of

feedback from ratings agencies;

• Interviews undertaken with senior executives

across the Group in core disciplines:

compliance; investor relations; human

resources; health, safety, environment and

quality; IT; and customer engagement and

marketing;

• We undertook an online survey of key

executives to determine their assessment of

the issues through the lenses of impact and

nancial materiality; and

• The survey resulted in the identication and

ranking of issues. We have focused on the

top 14 issues, which were reviewed by the

Executive Committee prior to their being

submitted to the Board for consideration

and approval.

These issues are illustrated on the right in

alignment with our sustainability framework.

Material issues 2023 – adopting a ‘double

materiality’ approach

Governance

The Ethics and Sustainability Committee has

stewardship of the Group’s strategic approach

to ESG matters. The Committee monitors and

guides those matters that are both nancially

material to the value of the Group’s businesses

over time, and those that are important to our

markets, our employees, other stakeholders and

the environment. The Committee met on two

occasions in 2023. For more details see pages

128 to 130.

The management of ESG matters is led by the

Chief Executive and the Executive Committee,

supported by the ESG Steering Committee and

TCFD Working Group.

ESG and Sustainability continued

The environment

• Ensuring environmental

compliance and good practice; and

• Pursuing the responsible transition

to and growth of our business in

less carbon-intensive sectors.

Responsible Products

• Ensuring the quality and

consistency of our products;

• Ensuring customer and market

responsiveness; and

• Delivering innovation.

People and society

• Protecting the health and safety

of our customers;

• Protecting the health, safety and

well-being of employees; and

• Promoting and ensuring employee

engagement.

Governance

• Safeguarding cyber-security;

• Protecting and enhancing our

reputation;

• Complying with regulations;

• Promoting business ethics,

anti-bribery and corruption;

• Assuring due diligence in our

supply chain; and

• Promoting Board leadership and

accountability for ESG.

Hunting PLC Annual Report and Accounts 2023 63Strategic Report Corporate Governance Financial Statements Other Information

At a glance

ESG and Sustainability continued

The environment People and society Responsible products Governance

Scope

1 and 2

GHG data

assurance

completed

To review our assurance

report please see

www.huntingplc.com

Safety remains a priority

Zero

fatalities (2022 – zero)

recordable incidents

(2022 – 23)

1.55

near-miss frequency rate

(2022 – 2.79)

Improved levels of employee

engagement

78%

of our facilities are

compliantwith ISO 9001: 2015,

a globally recognised standard

for quality management

Continued focus on Board

accountability for ESG

Ethics and

Sustainability

Committee met twice

in 2023 (2022 – twice)

The 2023 employee engagement

survey recorded an engagement

score of 42%, compared to 36%

recorded in 2019.

Waste and

environmental

impact:

Zero environmental

nes or recordable

environmental

incidents (2022 – zero)

Gender diversity improvements

44%

of the Board are women

(2022 – 37%)

25%

of workforce are women

(2022 – 24%)

Our Quality Management

System is aligned with

ISO 14001 (international

standard for designing

and implementing an

environmental management

system)

32%

of senior management are

women (2022 – 28%)

Board independence

78%

of the Board is independent

ISO 50001

(international standard for

designing, implementing

and maintaining an energy

management system)

Hunting PLC Annual Report and Accounts 2023 64Strategic Report Corporate Governance Financial Statements Other Information

Our ambition

Responsibly creating long-term,

sustainable value

Our commitment

Sound environmental stewardship and

aresponsible transition to a lower

carboneconomy

Our commitment

Delivering innovative, high quality

and reliable products

Our commitment

Ensuring the safety and

health of employees and

customers, engaging

with and supporting

our people and the

communities around us

Our commitment

Ethical and transparent

conduct in our business

and our supply chain

Our sustainability framework

We have continued to rene and simplify our ESG

framework, aligning this with the outcomes of our

materiality process.

Our overriding ESG ambition is to create

long-term, sustainable value and this was applied

in four areas of focus:

• The environment;

• People and society;

• Responsible products; and

• Governance.

Our commitments remain unchanged and are

aligned with each of these focus areas, which

form the basis of our ongoing disclosure. For

each focus area, we indicate the relevant

Sustainable Development Goal (“SDG”).

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 65Strategic Report Corporate Governance Financial Statements Other Information

AREA OUR COMMITMENTS MATERIAL ISSUES ADDRESSED WHAT WE MEASURE PERFORMANCE IN 2023

The environment Managing our environmental performance,

mitigating our impacts

We protect and minimise our impact on the

environments in which we operate, and where

our products are used. We focus on climate

change – setting and achieving emissions

reductions and mitigating climate-related risks.

• Applying integrated risk management

across the business;

• Increasing GHG emissions disclosures,

and developing a credible transition

pathway to Net Zero; and

• Ensuring environmental compliance and

good practice (emissions, water, waste).

Environmental incidents

e intensity factor

Water consumption

Zero (2022 – zero)

25.9 kg CO

per $k revenue

(2022 – 30.9 kg)

198,000m

(2022 – 164,000m

)

People and society

Operating safely

We seek to achieve and maintain the highest

standards of safety for our employees,

customers, suppliers and the public.

• Protecting the safety of our customers

and users of our products; and

• Protecting the health, safety and

well-being of our employees.

Internal manufacturing reject rate

Fatalities

Total recordable incident rate

Near-miss frequency rate

Vehicle incidents

0.20% (2022 – 0.13%)

Zero (2022 – zero)

0.91 (2022 – 0.97)

1.55 (2022 – 2.79)

Zero (2022 – nine)

Supporting and developing our people

We want to attract and retain a highly skilled

workforce. We provide training and development

to our employees to help them sustain and grow

their careers. We promote diversity and

workplaces that are free of prejudice.

• Ensuring fair labour practices and

optimal human capital management;

• Promoting diversity and inclusion,

with the current focus on gender

diversity; and

• Engaging with our employees.

Voluntary turnover

Representation of women on

the Board, in senior management;

and in the workforce

Engagement level

14% (2022 – 13%)

44% women on the Board (2022 – 37%)

32% women in senior management

(2022 – 28%)

25% women in workforce (2022 – 24%)

42% engagement score (2019 – 36%)

Supporting communities around us

We make a positive contribution to the

communities in which we operate.

• Investing in our communities. Charitable donations $81k paid in charitable donations

(2022 – $85k)

Progress against our commitments

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 66Strategic Report Corporate Governance Financial Statements Other Information

AREA OUR COMMITMENTS MATERIAL ISSUES ADDRESSED WHAT WE MEASURE PERFORMANCE IN 2023

Responsible

products

Delivering high quality products and

services

We meet and pre-empt the needs of our

customers and the environments we both

operate in, through innovation, customisation

and the highest levels of quality control.

• Ensuring the quality assurance of

our products;

• Transition to and growth of business

in less carbon-intensive sectors;

• Promoting innovation to develop new

products and applications; and

• Being responsive to the needs of our

customers and market.

Internal manufacturing reject rate

% of shipped goods returned

% of facilities accredited to

ISO 9001: 2015 (Quality)

Non-oil and gas revenue

Research and development

expenditure

0.20% (2022 – 0.13%)

0.0006% (2022 – 0.0013%)

78% (2022 – 74%)

$75.9m (2022 – $47.6m)

$6.9m (2022 – $5.8m)

Governance

Fostering mutually benecial partnerships

We foster sound and positive partnerships with

our customers and suppliers, industry bodies,

and regulators in the regions in which we

operate. We respect human rights.

• Ensuring sound governance, business

ethics, and anti-bribery and corruption;

• Due diligence in supply chain;

• Observance of regulation and custom,

including local content;

• Respecting human rights, including

preventing modern slavery;

• Maintaining transparency and improving

ESG disclosure; and

• Disclosing Board and leadership

accountability for ESG, and linking this

to remuneration.

Whistleblowing reports Six reports (2022 – two)

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 67Strategic Report Corporate Governance Financial Statements Other Information

Good health and well-being Affordable and clean energy Responsible consumption

and production

The health and safety of our employees is of the

utmost importance to us. We are responsible for

the health and safety of those who use or are

affected by our services and equipment. We

believe that we can address employee and

community health through the systems we have

in place, the training, support and access to

healthcare we provide, and through innovation

and technology – by building and implementing

safety-enhancing features in the work we do.

Through the technology, products and services

we provide to the oil and gas sector, we assist in

the safe, and reliable extraction of resources,

while minimising environmental impacts. We also

have a number of readily available technologies

and products to supply to the tangential

geothermal and carbon capture and storage

markets in the emerging energy transition sector.

As a responsible and efcient operator, we strive

to limit the consumption of the materials we use,

and to increase recycling and integration into the

circular economy. We are conscious of the need

for the responsible sourcing of materials.

Gender equality Decent work and economic

growth

Climate action

Our aim is to ensure that our workplaces and

decision making processes are free from

prejudice, and that hiring and promotion is based

on merit. Not only do we aim to improve gender

representation in our business, we also seek to

promote diversity on our Board and among our

senior leadership team.

We have a skilled and diverse workforce,

operating in 11 countries across the globe.

We place a great emphasis on attracting and

retaining talented employees, ensuring that

they are engaged and able to develop to their

full potential. Measures are in place to identify

and guard against modern slavery and

human trafcking.

We recognise that climate change is a global

challenge and a risk to our business, and that we

can make the most positive contribution towards

climate change mitigation by improving our

energy efciency mix and reducing our

greenhouse emissions. We also recognise the

need to understand and plan for climate change

impacts and transition.

Clean water and sanitation Industry, innovation and

infrastructure

Partnership for the goals

We monitor and manage our water usage,

understanding that water is a valuable and

constrained resource, especially in some of the

regions in which we operate. We protect water

resources, guarding against potentially

hazardous emissions to water bodies.

We support inclusive and sustainable

industrialisation. We produce and work with

innovative technology that is safe and efcient.

We recognise that the achievement of the SDGs

requires partnership and collaboration. Through

Hunting’s TEK-HUB™, we seek to attract

innovative individuals and companies to develop

technology partnerships. By working in true

collaboration, we will bring innovations to market

under licence.

Our contribution to the SDGs

The United Nations’ 2030 Agenda

for Sustainable Development

provides a shared blueprint for

peace and prosperity for people

and the planet, now and into the

future. At its heart are the 17

SDGs, which are an urgent call

for action by all countries –

developed and developing – in a

global partnership. These goals

recognise that ending poverty and

other deprivations must go hand-

in-hand with strategies that

improve health and education,

reduce inequality, and spur

economic growth – all while

tackling climate change and

working to preserve our oceans

and forests.

At Hunting, we believe we can contribute to

achieving these goals, and that every contribution

– no matter how small – can have a positive

impact on society and the environment.

We have identied nine SDGs to which we can

make a positive contribution.

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 68Strategic Report Corporate Governance Financial Statements Other Information

The environment

OUR COMMITMENT

We protect and minimise our impact on the

environment in which we operate, and where our

products are used. We support the responsible

transition to a low carbon economy, by setting

and achieving emissions reductions and

mitigating climate-related risks, and transitioning

our business to less carbon intensive sectors.

MATERIAL ISSUES

Ensuring environmental compliance and good

practice (emissions, water, waste)

Pursuing the transition to and growth of our

business in less carbon-intensive sectors

SDGS

Our comprehensive and integrated approach

to quality, safety, health and environmental

management and compliance is underpinned

by our sound enterprise risk management

framework. This supports our aim to ensure

compliance with all environmental regulation

in the regions in which we operate.

We are committed to the efcient use of natural

resources, such as energy, water and raw

materials, and to reducing our overall

environmental footprint.

The Group’s Quality Management System is

aligned with the globally recognised ISO 14001

(environmental) standard and the ISO 50001

(energy management) standard. In 2023,

78% (2022 – 74%) of facilities were in compliance

with ISO 9001: 2015.

Climate change

At Hunting, we support a science-based

approach to climate change and recognise that

responsible companies have a role to play in

mitigating our contribution to climate change and

its impacts on business and society. The Hunting

Board has committed to the principles published

in the 2015 Paris Agreement, which aims to limit

the increase in global warming to below 2°C and

to pursue efforts to limit the increase to 1.5°C.

Our Climate Policy was updated in January 2023,

and is available at www.huntingplc.com. Having

adopted and progressed our TCFD reporting,

additional strong governance and reporting

initiatives have been put in place to further

support our commitment to addressing and

mitigating our impact on climate change, as well

as the impact of climate change on our business

in the short, medium and long term. Our TCFD

disclosure is available on pages 82 to 95.

We seek to manage our climate-related impacts

by setting and achieving emission reductions,

and mitigating climate-related risks. While

Hunting’s businesses have historically operated

in the oil and gas sector, the Group is deliberately

seeking to transition to lower carbon products

and services. We are committed to pursuing

energy transition opportunities as well as

diversifying revenue sources to include non-oil

and gas sales.

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 69Strategic Report Corporate Governance Financial Statements Other Information

Our scope 1 and 2 carbon footprint

To reduce our scope 1 and 2 emissions footprint,

we aim to improve our energy efciency and, at

the same time, increase the contribution of

renewables to our energy mix. Importantly, we

aim to introduce a ‘low carbon’ culture within our

operating facilities and among our employees.

In the US, where most of the Group’s facilities are

located, wind generation capacity is substantial,

giving the Board condence that a large

proportion of our carbon footprint (predominantly

scope 2 electricity usage) can be substantially

eliminated by moving to renewable energy.

In the UK, the Group’s Aberdeen and London

operations have secured renewable energy

supplies. The Group also participates in several

initiatives, including the Energy Saving

Opportunity Scheme, which requires Hunting’s

UK facilities to be audited for energy efciency,

with recommendations provided to reduce

energy usage.

In 2023, our total electricity usage was

49.4 GWh (2022 – 43.4 GWh). Of this gure,

total renewable electricity purchased was

11.4 GWh, (2022 – 8.7 GWh) or 23% of

electricity purchased (2022 – 20%).

Total purchased electricity

GWh

2023

2022

2021

43.4

40.5

49.4

Renewable electricity purchased

GWh

2023

2022

2021

8.7

6.5

11.4

The data reported and the carbon dioxide

conversion factors used to report the Group’s

carbon footprint, are based on those published

by the International Energy Agency and BEIS and

DEFRA in the UK (www.defra.org.uk).

Total scope 1 and 2 CO

e emissions

tonnes

2030

2022

021

17,937

24,042

22,422

18,859

* 2030 Target

The Group’s total scope 1 and 2 emissions

in 2023 were 24,042 tonnes CO

(2022 – 22,422 tonnes CO

e). In the UK,

total scope 1 and 2 emissions in 2023 were

787 tonnes CO

e (2022 – 359 tonnes CO

e).

Our scope 3 carbon footprint

In 2023, the Group appointed an independent

third-party expert adviser to assist in the

determination of Hunting’s scope 3 inventories.

Following internal discussion, management

decided to commence this exercise using the

Hunting Titan operating segment as a proxy for

the Group’s total scope 3 inventories. Hunting

Titan has a centralised operating structure, which

enabled a broad range of emissions data to be

collected and assessed. In recent years, the

segment has accounted for c.24% of the Group’s

total scope 1 and 2 footprint, which management

believes to be sufciently material in order to

extrapolate the data and derive an estimate of

the Group’s total scope 3 footprint.

Working with the third-party expert, the Group

has been able to report against eight of the 15

pillars of scope 3 inventories including: purchased

goods and services; capital goods; fuel and

energy related activities; upstream transportation

and distribution; waste generated from operations;

business travel; employee commuting; and end

of life treatment of sold products.

Measuring our emissions and setting

targets

Hunting has disclosed its scope 1 and 2 GHG

emissions since 2013, in accordance with the

principles of the Kyoto Protocol. The process for

the reporting of these emissions is integrated into

our non-nancial reporting framework. As our

scope 1 and 2 emissions are within our control,

our aim is to reduce them as a priority:

• In 2022, the Board approved a target to reduce

our GHG emissions by 50% by 2030, from

levels reported in 2019, the baseline year. This

equates to a target of 17,937 tonnes in total

scope 1 and 2 emissions by the end of the

decade. The Group continues to drive an

intensity factor (calculated as total emissions

divided by revenue) of less than 30; and

• In late 2022, the Group appointed S&P Global

to assure our 2022 scope 1 and 2 GHG

emissions data. This process was completed

in July 2023, with no material issues being

identied.

In September 2023, the Group appointed a

third-party expert to assist in the evaluation of

Hunting’s scope 3 GHG emission inventories.

This process started in late 2023 at our Hunting

Titan operating segment. Hunting Titan currently

represents around 23% of the Group’s scope 1

and 2 carbon footprint and is considered to be

a major component of our overall footprint.

In 2024, this assessment will be extended to the

Group’s Subsea Technologies, EMEA and Asia

Pacic operating segments to further improve the

accuracy of our total GHG footprint. This will

enable the Group to develop and publish a

credible carbon reduction plan by mid-2025.

ESG and Sustainability continued

2013 2019 2021 2022 2023 2024 2025

Began scope 1

and 2 GHG

emissions

reporting

Publication of

maiden carbon

reduction and

intensity targets

Initial TCFD

disclosures

published

Publication of

enhanced TCFD

disclosures

Commenced

carbon assurance

against AA1000

standard

Maiden scope 3

GHG reporting,

based on Hunting

Titan operating

segment data

Proposed

expansion of

scope 3 reporting

and development

of Net Zero plan

Proposed

publication of

Net Zero plan

Hunting PLC Annual Report and Accounts 2023 70Strategic Report Corporate Governance Financial Statements Other Information

Carbon intensity factor

Hunting’s CO

e intensity factor is based on total

carbon dioxide equivalent emissions divided by

Group revenue. In 2023, this was 25.9 kg/$k of

revenue (2022 – 30.9 kg/$k of revenue). This is

based on our scope 1 and 2 CO

e tonnage only.

e intensity factor

2023

2022

2021

30.9

36.2

25.9

Our latest submission to the Carbon Disclosure

Project is available at www.cdp.net.

Climate change impact and transition

Hunting is currently transforming its business

model to pursue opportunities in a lower carbon

economy in response to, and to mitigate, climate

change. Currently, around $75.9m or 8%

(2022 – $47.6m or 7%) of our revenue contribution

is from non-oil and gas sectors, and this is set to

steadily increase in the years to come.

Our efforts to align our business model to take

into account and pre-empt this transition and the

opportunities that this potential for diversication

has for the business, are described in our Climate

Change statement on page 69.

An integral part of our risk management

approach ensures that all new facilities take into

account environmental impact considerations,

including protection from extreme weather

events, such as severe storms and ooding.

Water management

We recognise that water is a valuable resource

and, in some areas in which we operate, it is also

a scarce resource. Hunting has a number of

water supplies, some provided by utility networks

and some from boreholes drilled at certain

locations. While Hunting is not considered to be a

signicant water user, we are mindful of the need

to actively reduce our freshwater consumption,

to reuse/recycle water as far as possible, and to

ensure that no contaminated water is discharged

into the original water source. Any water

contaminated during industrial activities is

collected and treated or contained as special

waste. Our intention is to recycle as much as we

are able to internally or facilitate treatment and

recycling off site. We are mindful of the potential

impact on our facilities of extreme weather

events, and ensure that any run-off from our

facilities is captured and contained, prior to

treatment, through secondary containment

measures. A feature of all new and planned

facilities is the likely impact of severe storms.

In 2023, freshwater consumption was 198,000m

(2022 – 164,000m

Water consumption

‘000 m

2023

2022

2021

164

198

Waste management and recycling

We are mindful of the need to responsibly source

and consume materials, to increase and optimise

reuse and recycle, and to responsibly dispose

of waste.

All our operations have recycling programmes

in place and recycling data is collated for metal,

wood and plastics. Our industrial waste is largely

in the form of liquid waste streams. We continue

to explore ways of reusing chemicals and

materials. For example, we have introduced a

mechanism to capture and reuse cutting uids,

that not only limits this waste stream, but is also

cost-effective. Where a waste stream is

unavoidable, we dispose of this responsibly using

appropriately vetted suppliers. We take the view

that we are responsible for materials throughout

their life cycles. An excellent example of our

approach is Hunting’s joint venture manufacturing

facility in Nashik, India. The facility produces and

supplies pipes, tubes and premium connections

for the OCTG and is aiming to be entirely

waste-free. See the case study on page 72.

Metal recycling

tonnes

2023

2022

2021

2,032

2,199

2,827

Plastic recycling

tonnes

2023

2022

2021

Wood recycling

tonnes

2023

2022

2021

Two pillars will be reported on in the future when

further analysis has been completed, being use

of sold products; and downstream leased assets.

Five pillars were determined not to be relevant

to the business prole of Hunting Titan, being

upstream leased assets; downstream

transportation and distribution; processing of

sold products; franchises; and investments.

Based on these eight reported pillars, Hunting

Titan’s 2022 scope 3 inventories were calculated

to be 94,938 tonnes. In 2022, Hunting Titan’s

scope 1 and 2 inventories totalled 5,455 tonnes,

indicating that its scope 3 footprint was c.95%

of its total scope 1, 2 and 3 footprint. In 2022,

Hunting Titan, therefore, had an estimated scope

1, 2 and 3 footprint of c.100,393 tonnes.

Management have used this assessment to

extrapolate Hunting’s total Group scope 3

footprint for 2022 and 2023. The method for

extrapolation had been based on the cost of

sales of Hunting Titan and that of the wider

Group over these two years, and reects

materials purchasing and employee increases,

based on the higher levels of activity reported in

the year. The Group’s scope 3 inventories for

2023 and 2022 have, therefore, been assessed

to be 353,346 tonnes and 277,143 tonnes

respectively. The estimated total Group scope 1,

2 and 3 emissions for 2023 were, therefore,

377,388 tonnes (2022 – 299,565 tonnes).

Management will be extending this

assessment exercise to include the Group’s

Subsea Technologies, EMEA and Asia Pacic

operating segments in 2024, with the North

America operating segment to be assessed in

2025. In addition, further work is planned to

broaden the number of reporting pillars of

scope 3 being assessed.

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 71Strategic Report Corporate Governance Financial Statements Other Information

Nashik facility in India drives strong waste

management protocols

Hunting operates a joint venture manufacturing

facility together with Jindal SAW Ltd in Nashik,

India, approximately 200km north-east of

Mumbai.

The facility, Jindal Hunting Energy Services Ltd,

produces and supplies pipes, tubes and

premium connections for the OCTG sector, and

is poised to reach an annual threading capacity

of 60,000 metric tonnes of OCTG.

Every day, the manganese phosphate and

copper plate processes that the facility uses

produce waste water that contains particles

and chemical compounds. This water cannot

be released into the environment and is

therefore properly treated and recycled through

the facility’s efuent treatment plant (“ETP”).

“We have built a 15kl ETP to treat all wastewater

produced during the manganese phosphate

and copper plate processes,” says Kwek Wee

Liang, Hunting’s Regional GM for QHSE and

the facility’s Project Manager. “The ETP

includes a zero liquid discharge (“ZLD”) plant,

which is still under construction. Once the ZLD

plant is complete, it will process approximately

30% of the waste water, with the remaining

70% going to external treatment.”

The ZLD system involves a range of advanced

wastewater treatment technologies to recycle,

recover and reuse the treated wastewater. It also

separates sludge in salt form and disposes of it

through a local government-approved vendor.

After treatment, about 99% of the waste

water is recycled for utility purposes, and no

wastewater is discharged into the environment.

Other forms of waste, including waste oil,

sludge, chemical fumes and contaminated

dust, are also ethically disposed of, either

through the ETP or approved vendors.

Finally, the facility’s phosphate, copper plating,

pipe stencilling and painting, and blasting

processes are equipped with scrubber systems

to remove particulates and contaminants before

any gases are released into the atmosphere.

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 72Strategic Report Corporate Governance Financial Statements Other Information

Annual energy summary

Units

2023 2022 2021 2020 2019

base line year

Energy type

Natural gas – Group GWh 7.2 7.9 8.5 13.7 17.8

Natural gas – UK GWh 0.8 0.8 0.9 2.6 4.2

Vehicle consumption and process emissions – Group tonnes CO

e 3,575 3,367 2,491 3,338 2,972

Vehicle consumption and process emissions – UK tonnes CO

e 76 76 28 34 60

Electricity purchased – Group GWh 49.4 43.4 40.5 48.6 55.7

Electricity purchased – UK GWh 1.7 0.5 1.4 1.4 1.6

Renewable electricity purchased – Group GWh 11.4 8.7 6.5 5.8 2.1

Renewable electricity purchased – UK GWh 1.7 0.5 0.3 0.4 0.5

Greenhouse gas emissions

Scope 1 tonnes CO

e 5,612 5,778 4,171 6,605 7,100

Scope 2 tonnes CO

e 18,430 16,644 14,688 18,811 28,774

Total scope 1 and 2 tonnes CO

e 24,042 22,422 18,859 25,416 35,874

Scope 3 tonnes CO

e 353,346 277,143 n/a n/a n/a

Total tonnes CO

e 377,388 299,565 n/a n/a n/a

e intensity factor (based on scope 1 and 2 emissions only) kilogrammes per $k revenue 25.9 30.9 36.2 40.6 37.4

Water consumption thousand cubic metres 198 164 69 257 319

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 73Strategic Report Corporate Governance Financial Statements Other Information

ESG and Sustainability continued

People and society

OUR COMMITMENTS

Operating safely

We seek to achieve and maintain the highest

standards of safety for our employees and

customers.

Supporting and developing our people

We want to attract and retain a highly skilled

workforce. We provide training and development

to our employees to help them sustain and

grow their careers. We promote diversity and

workplaces that are free of prejudice.

Supporting communities around us

We make a positive contribution to the

communities in which we operate.

MATERIAL ISSUES

Protecting the safety of our customers and users

of our products

Protecting the health, safety and well-being of

our employees

Engaging with our employees

SDGS

Our people

People are at the heart of our business, and

ensuring the safety, health and well-being of

every person employed by the Company, or

associated with our business, is a priority.

At 31 December 2023, the Group employed

2,420 people across our global operations

(2022 – 2,258 people). Of these, 37% are

employed in our North America operations,

26% at Hunting Titan, 14% in Asia Pacic,

11% in EMEA, 8% at Subsea Technologies,

and 4% in regional headquarters.

Employees by operating segment

Operating segments

Hunting Titan

North America

Subsea Technologies

EMEA

Asia Pacic

Central

Hunting PLC Annual Report and Accounts 2023 74Strategic Report Corporate Governance Financial Statements Other Information

Our Group Health, Safety and Environmental

Global Manual is accredited to ISO 14001:

Environmental Management System and was

compiled in accordance with the ISO 45001:

Occupational Health and Safety Management

System. This manual species requirements for

HSE training, the need for protective equipment,

and procedures and practices associated with

high-risk operations.

Each local business has tailored health and

safety policies to suit their particular working

environment. At a minimum, we comply with local

regulatory requirements.

Our target is to achieve zero recordable incidents.

While this was not achieved in 2023, our overall

safety performance, as measured by the total

recordable incident rate, improved despite a

signicant increase in the number of hours worked

during the year as trading activities increased.

• There were no fatalities in the Group

(2022 – zero);

• Recordable incidents rose slightly to 24 in 2023

(2022 – 23), while the total recordable incident

rate decreased by 6% to 0.91 (2022 – 0.97) as

the number of hours worked increased from

4.7m in 2022 to 5.3m in 2023; and

• There were 41 near-miss incidents in 2023

(2022 – 66), which translates into a total

near-miss frequency rate of 1.55 (2022 – 2.79),

which decreased by 44% as the number of

hours worked increased.

Total near-miss frequency rate

2023

2022

2021

2.79

0.78

1.55

Climate, noise and air quality testing is undertaken

regularly at our operations to ensure both regulatory

compliance and the achievement of our own

internal standards.

Through our internal HSE Management System,

OnBase, processes, communication, training

and reporting are now captured seamlessly

within one application across the Group, helping

to ensure that all operations are in compliance

with local regulatory agencies.

We operate an embedded Health and Safety

training programme for all employees, with each

shop-oor member of staff attending weekly

“Tool Box” sessions, where HSE messaging

is reinforced.

Attracting, retaining and developing

employees

Our ability to successfully deliver on our

objectives, and the reputation that we have built

over many years, rests on the values and

behaviours of our highly skilled and committed

employees.

We take diligent steps to comply with all relevant

regional laws covering employment and minimum

wage legislation.

Recruiting and retention, and training and

development have been important areas of focus

during the year. Competition for talent remains

strong globally. Nonetheless, while nding talent

may currently take longer than it has previously,

Hunting continues to nd and place good

candidates.

Voluntary turnover is a measure we use to

understand the Company’s retention prole. Over

the last couple of years, we have experienced an

uptick in voluntary turnover, which is currently at

14%. Although this is marginally higher than the

last few years, it is still relatively low compared to

industry standards.

The tenure of our employees is another good

indicator of a positive work culture and Hunting

has a reputation for long service of its employees.

We maintain this success through competitive

compensation, excellent benets, and a

commitment to a safe environment.

To retain our staff, we ensure that our employees

are fairly remunerated. Given the competitive

landscape of our industry, our base levels of pay

are well above minimum wage thresholds.

Health and safety

Our health, safety and environment (“HSE”) goals

of “No Accidents, No Harm to People”, and “No

Damage to the Environment” continue to drive

our HSE agenda and support our pursuit of high

standards of performance.

We place great emphasis on entrenching HSE

best practice in our culture and employ rigorous

health and safety practices. Our HSE policy

guides the way we work, putting safety rst.

Our approach ensures:

• Regular audit and maintenance reviews

of facilities;

• Appropriate training and education of all staff;

• Accreditation and alignment of long-standing

internal programmes with internationally

recognised standards; and

• Regular reporting to the Board.

We place a great deal of emphasis on training

and learning from incidents. We have a rigorous

safety training curriculum in place, and each

employee received, on average, around 29

(2022 – 12) hours of HSE training in the year.

Total recordable incident rate

2023

2022

2021

0.97

0.99

0.91

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 75Strategic Report Corporate Governance Financial Statements Other Information

Employee engagement

Hunting places a great deal of emphasis on

employee engagement, recognising that high

levels of engagement are related to bottom line

outcomes such as job performance, client

satisfaction and nancial returns, while also

improving employees’ own quality of life.

In 2023, Hunting undertook an all-employee

Gallup Q12 survey, a following the survey

completed in 2019.

We were extremely pleased with the participation

results. A total of 1,866 employees responded to

the survey, resulting in a participation rate of 83%

(2019 – 80%).

Both the engagement score and engagement

index ratio (which denes engaged workers to

actively disengaged workers) improved. Since

2019, we have increased our engagement

activities through perception surveys and town

hall meetings. In addition, engagement

processes have been embedded within all

business units to enhance transparent two-way

dialogue between the Board and the Group’s

employees.

Another important result is the employee

engagement ratio of engaged workers versus

actively disengaged workers. Hunting’s

Engagement Index Ratio was 3.5:1 which means

there are 3.5 engaged employees for each

actively disengaged employee. This is again an

improvement from our 2019 result of 2.25:1. An

optimal ratio and our goal for future surveys is

a ratio of 4:1.

Our employees are encouraged to engage in

dialogue with management to raise issues of

concern. These procedures are supported by

an independent reporting service operated by

SafeCall, where condential matters can be

raised with the Board.

Diversity and inclusion

Hunting prides itself on being a fair and

responsible employer. We are committed to

creating a positive workplace environment for

all our employees, one that is safe, respectful,

fair and inclusive, and free of any form of

harassment, bullying or discrimination.

More than that, we actively seek to increase the

diversity of our workforce through recruitment,

training and development, conditions of work

and disciplinary procedures.

The Group’s ethics policies support equal

employment opportunities across all of Hunting’s

operations.

As a responsible employer, Hunting gives full

and fair consideration to applications from

disabled persons.

Further, Hunting’s Gender Diversity Policy

commits us to:

• an embedded culture of equal opportunities

for all employees, regardless of gender;

• require external recruitment consultants to

submit their diversity policies to the Group prior

to appointment;

• ensure that external consultants appointed

by Hunting provide the Board with shortlists

comprising an appropriate gender

balance; and

• a periodic review by the Nomination

Committee of its progress in complying with

best practice recommendations.

Community engagement and support

Hunting continues to engage with and support

the communities located around our operations

through a wide range of activities, including fund

raising events or community donations. Each

region is encouraged to develop their own

community engagement initiatives to align with

local cultural practices as well as Hunting’s

corporate values.

An example of this approach is our long-standing

relationship with three orphanages in Batam,

the largest city in the province of Riau Islands

in Indonesia.

Employees are offered benets on joining

the Group, including healthcare cover,

post-retirement benets and, in certain

instances, can include participation in annual

bonus arrangements that reects strong

performances. We also continue to enhance

the benets we offer, such as maternity and

paternity leave.

During the year, some of our employees were

selected from different business units across

the globe, to participate in the Energy Workforce

and Technology Council Executive Leadership

programmes, which are designed to develop and

enhance leadership skills as well as engagement

in networking opportunities within the industry.

An area of focus in the year ahead is leadership

training. An outcome of the engagement survey

completed in the year is the need for more

recognition of employees. One approach that is

being pursued is to better train managers on how

to give good feedback and daily recognition.

Additionally, we are placing our senior managers

in a programme for executive leadership and our

mid-level managers in an operations leadership

programme.

Training in respect of the Code of Conduct,

anti-harassment and discrimination and

unconscious bias is also continuing in support of

our diversity and inclusion efforts. We are further

committed to uplifting all employees, with training

and development covering Health and Safety

training, professional development and general

career development initiatives.

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 76Strategic Report Corporate Governance Financial Statements Other Information

FIND OUT MORE ON CSR

ESG and Sustainability continued

Supporting safe and nurturing spaces for orphans in Batam

Hunting believes in providing meaningful and

constructive support to communities in which

our operations are located, and encourages

employees to actively volunteer to good causes.

For some years we have actively supported

three orphanages in Batam, the largest city in

the province of Riau Islands in Indonesia. The

orphanages – Elshaddai Abigail, Manbaul

Hidayah and Al Kah – provide safe and

nurturing environments for orphans and

underprivileged children between the ages

of two and eighteen. They ensure that the

children’s basic needs are met and that they

receive a good education.

“We are aware that these orphanages face

numerous challenges, and are committed to

meeting their daily needs, providing them with

sustainable support, and ensuring their children

receive a good education” says Faris Gateneh,

Hunting’s HR Manager in Batam.

Over the last three years, Hunting has focused

on the following initiatives:

• Hydroponic gardening: Through our

hydroponic gardening programme, we help

the orphanages to grow their own food and

earn an income through the vegetables they

sell. We have also helped to improve their

hydroponics competency;

• Baking tools: The provision of baking tools

helps the orphanages to prepare their own

meals, and nurtures an interest among

children who are curious about cooking and

baking. The hope is that this will help some

children to use these skills to start their own

businesses in the future;

• Industrial sewing machines: The provision

of industrial sewing machines has helped the

orphanages to make and mend their own

clothing. This has been a signicant cost

saving and has improved their sewing skills;

• Chicken coops: Chicken coops give the

orphanages a fresh supply of eggs, and help

them to raise money through the eggs they

sell. It also ensures the children’s daily protein

needs are met;

• Cleft surgery: Children who require cleft

palate surgeries receive excellent care as

well as emotional support; and

• Tuition fees: Hunting pays tuition fees

towards the orphans’ education, which is

critical in helping them pursue tertiary

studies and nd employment or become

entrepreneurs.

At its annual charity event, Hunting also

welcomes voluntary donations from employees

in support of the orphanages. In 2022, Hunting

transitioned its fundraising system to the Sonny

Benevolent Smile Fund, which now processes

regular contributions. All future support for

orphanages will use the fund to manage and

control both donations and expenses.

Hunting PLC Annual Report and Accounts 2023 77Strategic Report Corporate Governance Financial Statements Other Information

ESG and Sustainability continued

Governance

Fostering mutually benecial

partnerships

OUR COMMITMENT

We ensure honest, ethical and transparent

conduct in our business and our supply chain.

We foster sound and positive partnerships with

our customers and suppliers, industry bodies,

and regulators in the regions in which we

operate. We respect human rights.

MATERIAL ISSUES

Ensuring cyber security and protection of data

Protecting and enhancing Hunting’s reputation

Ensuring sound governance, business ethics,

and anti-bribery and corruption

Undertaking due diligence in our supply chain

Compliance with regulation and custom,

including local content

Disclosing Board and leadership accountability

for ESG

SDGS

Business ethics

Hunting’s Code of Conduct (the “Code”) contains

policies and procedures covering how the Group

conducts business, internally and externally, and

maintains its relationships with business partners.

All employees and business partners are

provided with a copy of the Code and are

expected to adhere to it.

Human rights

We are committed to upholding the human

rights of all our stakeholders, and achieve this

by providing a safe and comfortable working

environment for all employees and contractors;

respecting the rights of each individual, with

a zero tolerance approach to any form of

discrimination, harassment or bullying; providing

training and development programmes to our

global workforce; respecting and upholding the

rights of employees to engage in collective

bargaining where relevant; and acting with

honesty, transparency and integrity in all of our

dealings with our workforce, and anyone else

who is in contact with and reliant on our

business. We have a zero tolerance stance on

slavery and trafcking, and we expect the same

from our business and trading partners. We

demonstrate our compliance with corporate

regulations through our Ethical Employment and

Trading Policy; our Modern Slavery, Human

Trafcking Transparency Statement; and our

Ethics Reporting Procedures.

Cyber security

We recognise that as we are more reliant on

globally-connected IT infrastructure, our business

has become more vulnerable to cyber threats.

To this end, we ensure that we have in place the

necessary processes and procedures to protect

our systems and data that could affect the

functioning of the business, and to protect the

Company from cyber attacks. We also recognise

that we are custodians of data, on behalf of our

employees, customers and suppliers, and that

we must do all that we can to protect information

in order to secure and maintain trust. Our

approach is proactive and precautionary and

we engage only with Tier 1 suppliers.

Hunting PLC Annual Report and Accounts 2023 78Strategic Report Corporate Governance Financial Statements Other Information

ESG and Sustainability continued

Responsible Products

Delivering high quality products

and services

OUR COMMITMENT

We meet and pre-empt the needs of our

customers and the environment, through

innovation, customisation and the highest levels

of quality control.

MATERIAL ISSUES

Ensuring the quality consistency of our products

Transition to and growth of business in less

carbon-intensive sectors

Promoting innovation to develop new products

and applications

Being responsive to the needs of our customers

and market

SDGS

Reliable and sustainable products

Our purpose as a business is to be a highly

trusted innovator and manufacturer of technology

and products that create sustainable value for

our stakeholders. Our customers rely on us to

meet and even pre-empt their needs,

consistently, reliably and sustainably. We

recognise that achieving this requires both

innovation and trust. Trust in turn is delivered

through consistent quality delivery.

A critical part of the customer engagement

strategy is to use our core competencies in

systems manufacture, precision engineering and

print-part manufacturing to deliver innovative

solutions in existing and new markets.

Focus on quality

Our Quality Management System (“QMS”)

underpins every aspect of our business. Certain

minimum requirements are mandated at a Group

level, with site and product-specic quality

measures in place across all sites. Our QMS

encompasses procedure specication, job

descriptions, and work processes. It states how

we control every aspect of a product, from risk

assessment to engineering changes and design

to new product delivery. Every product is logged

and tracked, and its journey can be audited.

Technology development

While Hunting has access to a very wide range

of technologies and products, whose applications

continue to expand, we know that technology

development is an important underpin of

our business.

Hunting’s TEK-HUB™ is an innovative

company-customer partnership that seeks

to attract individuals and companies in

co-developing and accelerating the

commercialisation of new technologies. By

collaborating with technology developers, we

are able to deliver a range of benets, including

reducing the timeframes required to deliver

technologies to market and into the eld; and

avoiding duplication of effort, resulting in

signicant nancial, time and opportunity cost

and energy/CO

savings, which frees up

resources to solve new problems.

For developers, the benets of partnering with

Hunting are signicant, including access to

capital, an international presence and an

established and extensive customer base.

Hunting PLC Annual Report and Accounts 2023 79Strategic Report Corporate Governance Financial Statements Other Information

Sustainability Accounting Standards Board Information

Oil & Gas – Services

TOPIC ACCOUNTING METRIC SASB CODE

REPORTED

BY HUNTING SECTION PAGE NAVIGATION

Emissions Reduction Services

& Fuel Management

Total fuel consumed, percentage renewable, percentage used in:

(1) on-road equipment and vehicles; and

(2) off-road equipment.

EM -SV-110 a.1 Yes Environment 38

Discussion of strategy or plans to address air emissions-related risks,

opportunities, and impacts.

EM -SV-110 a.1 Yes Task force on

climate-related

nancial disclosures

82 to 95

Percentage of engines in service that meet Tier 4 compliance for non-road

diesel engine emissions.

EM -SV-110 a. 3 n/a n/a n/a

Water Management

Services

(1) Total volume of fresh water handled in operations; and

(2) percentage recycled.

EM-SV-140a.1 Yes Water management 71

Discussion of strategy or plans to address water consumption and disposal-

related risks, opportunities and impacts.

EM-SV-140a.2 Yes Water management 71

Chemicals Management Volume of hydraulic fracturing uid used, percentage hazardous. EM -SV-150a .1 n/a n/a n/a

Discussion of strategy or plans to address chemical-related risks, opportunities

and impacts.

EM-SV-150a.2 n/a n/a n/a

Ecological Impact

Management

Average disturbed acreage per:

(1) oil; and

(2) gas well site.

EM-SV-160a.1 n/a n/a n/a

Discussion of strategy or plan to address risks and opportunities related to

ecological impacts from core activities.

EM-SV-160a.2 n/a n/a n/a

Workforce

Health & Safety

(1) Total recordable incident rate;

(2) fatality rate;

(3) near-miss frequency rate;

(4) total vehicle incident rate; and

(5) average hours of health, safety and emergency response training for:

(a) full-time employees;

(b) contract employees; and

EM-SV-320a.1 Yes

Yes

n/a

Yes

Health and safety

n/a

Health and safety

34 and 75

n/a

Description of management systems used to integrate a culture of safety

throughout the value chain and project life cycle.

EM-SV-320a.2 Yes Health and safety 34

Business Ethics

& Payments Transparency

Amount of net revenue in countries that have the 20 lowest rankings in

Transparency International’s Corruption Perception Index.

EM-SV-510a.1 n/a n/a n/a

Description of the management system for prevention of corruption and bribery

throughout the value chain.

EM-SV-510a.2 Yes Anti-bribery and

corruption (“ABC”)

Management of the Legal

& Regulatory Environment

Discussion of corporate positions related to government regulations and/or policy

proposals that address environmental and social factors affecting the industry.

EM-SV-530a.1 Yes Business model 31 to 39

Critical Incident

Risk Management

Description of management systems used to identify and mitigate catastrophic

and tail-end risks.

EM-SV-540a.1 n/a n/a n/a

ESG and Sustainability continued

Hunting PLC Annual Report and Accounts 2023 80Strategic Report Corporate Governance Financial Statements Other Information

ESG and Sustainability continued

Oil & Gas – Services: metrics

ACTIVITY METRIC SASB CODE

REPORTED

BY HUNTING SECTION PAGE NAVIGATION

Number of active rig sites EM-SV-000.A n/a n/a n/a

Number of active well sites EM-SV-000.B n/a n/a n/a

Total amount of drilling performed EM-SV-000.C n/a n/a n/a

Total number of hours worked by all employees EM-SV-000.D Yes Health and safety 34 and 75

Industrial Machinery & Equipment

TOPIC ACCOUNTING METRIC SASB CODE

REPORTED

BY HUNTING SECTION PAGE NAVIGATION

Energy

Management

(1) Total energy consumed;

(2) percentage grid electricity; and

(3) percentage renewable.

RT-IG-130a.1 Yes Annual energy

summary

Employee Health

& Safety

(1) Total recordable incident rate;

(2) fatality rate; and

(3) near-miss frequency rate.

RT-IG-320a.1 Yes

Yes

Health and safety

34 and 75

Fuel Economy &

Emissions in Use-phase

Sales-weighted eet fuel efciency for medium- and heavy-duty vehicles. RT-IG-410a.1 n/a n/a n/a

Sales-weighted fuel efciency for non-road equipment. RT-IG-410a.2 n/a n/a n/a

Sales-weighted fuel efciency for stationary generators. RT-IG-410a.3 n/a n/a n/a

Sales-weighted emissions of:

(1) nitrogen oxides (NOx); and

(2) particulate matter (PM) for:

(a) marine diesel engines,

(b) locomotive diesel engines,

(d) other non-road diesel engines.

RT-IG-410a.4 n/a n/a n/a

Industrial Machinery & Equipment: metrics

ACTIVITY METRIC SASB CODE

REPORTED

BY HUNTING SECTION PAGE NAVIGATION

Number of units produced by product category RT-IG-000.A n/a n/a n/a

Number of employees RT-IG-000.B Yes Employees

Our people

Hunting PLC Annual Report and Accounts 2023 81Strategic Report Corporate Governance Financial Statements Other Information

2023 has seen the further embedding of TCFD reporting across the

Group’s businesses. We have enhanced our disclosures on climate

Strategy and Risk Management. As noted elsewhere, during the year

the Company completed an assurance programme over its scope 1

and 2 greenhouse gas emissions and in the second half of 2023

commenced the assessment of the Group’s scope 3 inventories.

Task Force on Climate-Related Financial

Disclosures (“TCFD”)

Compliance

Under FCA Listing Rule 9.8.6(8)b for premium

listed companies, Hunting is required to report

on a ‘comply or explain’ basis against the TCFD

Recommendations and Recommended

Disclosures in respect of the nancial year ended

31 December 2023. The climate-related nancial

disclosures, which follow, are consistent with the

four reporting pillars of:

(i) Governance (page 83);

(ii) Strategy (pages 84 to 93);

(iii) Risk Management (pages 93 and 94); and

(iv) Metrics and Targets (pages 94 and 95)

contained within the TCFD Recommended

Disclosures.

The Directors believe that Hunting is compliant

with Listing Rule 9.8.6(8)b, with the following

two exceptions:

• Hunting has not quantied detailed nancial

impacts of the various risks and opportunities

in respect to climate change. Hunting is,

therefore, not fully compliant with disclosure

part (b) of Strategy; and

• Hunting has extrapolated its 2023 scope 3

emissions data using 2022 collected data

and modelling processes. Hunting is, therefore,

not fully compliant with disclosure part (b) of

Metrics and Targets.

Further work will be completed in 2024, after

which the Directors believe the Company will

become compliant. This work will form the basis

for a Net Zero transition plan to be published in

2025, as required by the recommendations

published by the UK government.

Climate policy

In 2020, the Directors approved a Climate Policy

(located at www.huntingplc.com), which commits

the Board to Group-level monitoring of climate-

related opportunities and risks. This Policy

acknowledges the goal to limit global warming

to 1.5°C in-line with the 2015 Paris Accords and

commits the Group to assisting in the delivery

of this ambition through a reduction in its global

carbon footprint.

Progress in Hunting 2030 Strategy

During 2023, the Board of Hunting announced

the Hunting 2030 Strategy, which commits to the

development of revenue from the energy transition

sector, including low carbon geothermal and

carbon capture projects, and non-oil and gas

end-markets. To increase the Group’s long-term

sustainability investment prole, Hunting is now

targeting 25% of total revenue to be derived from

non-oil and gas sources by 2030. This is targeted

at reducing the cyclicality of the Group’s revenue

and prot prole, to ensure Hunting remains an

investable business through the energy cycle.

For more information on the Hunting 2030

Strategy please see pages 6 to 11.

Risk management

In 2022, the Group rolled out a climate change

risk management survey to all businesses, which

is updated annually. The survey explores the

impact of climate change on the long-term outlook

of each business unit, using the ‘business as usual’

and ‘1.5°C’ global warning scenarios. The survey

captures the risk prole of the proposed pivot to

lower oil and gas-related sales, in addition to the

physical risks associated with Hunting’s asset

base. The risk assessment presented on pages

85 to 89 incorporates these disclosures and also

reects the nancial impact of these risk in the

short, medium and long term. The Group has also

developed a model which analyses the carrying

values of the assets held by each business and

explores the nancial impact of each business

unit based on these climate scenarios.

Metrics and targets

The Directors of Hunting announced new GHG

emissions reduction targets in March 2023, which

includes a reduction of scope 1 and 2 emissions

to 50% of the base-line year of2019 by 2030.

Carbon data collection and assurance

During 2022, the Group appointed S&P Global to

provide assurance services against the AA1000

standard over Hunting’s policies and scope 1

and 2 GHG emissions data which are being

externally published. The process concluded in

July 2023, with no material issues identied in the

Group’s data collection and processing of its

carbon data.

Scope 3 emissions reporting

In 2023 management commenced the assessment

of its scope 3 GHG inventories. To assist Hunting

in this initiative, an independent third-party expert

adviser was appointed in September 2023 to

support the data collection and analysis utilising

their long-term expertise in carbon data modelling.

The Group has completed an analysis of the

scope 3 emissions of the Hunting Titan operating

segment, which historically accounts for c.24%

of the Group’s scope 1 and 2 carbon footprint,

which management believes to be sufciently

material to enable an extrapolation of Hunting’s

total scope 1, 2 and 3 GHG emissions to be

made. The Company has commenced this

analysis using Hunting Titan’s 2022 data sets.

This is believed to be appropriate, given that

Hunting Titan’s manufacturing business model

closely aligns with other businesses within

the Group. Management worked with the

third-party adviser on the emissions data

available for assessment and, following

discussion, agreed that eight of the 15 pillars of

the TCFD-recommended scope 3 inventories

could be reported. These are detailed on pages

70 and 71. Management, therefore, note that

this analysis of scope 3 inventories is a partial

emissions assessment. Based on the analysis

of the Hunting Titan segment, its scope 1, 2 and 3

greenhouse emissions were analysed to be

c.100,393 tonnes in 2022, with Hunting Titan’s

2022 scope 1 and 2 footprint being 5,455 tonnes

and scope 3 being 94,938 tonnes. Scope 3

emissions for Hunting Titan, therefore, equate

to c.95% of the emissions of the operating

segment. Using this assessment, management

has extrapolated the Group’s scope 3

inventories, using Hunting Titan’s and the

Group’s cost of sales data as the appropriate

scaling factors to calculate a total scope 3

data point. Hunting’s scope 1 and 2 emissions

have been assessed to be 24,042 tonnes

(2022 – 22,422 tonnes). Scope 1, 2 and 3 GHG

emissions have, therefore, been assessed to

be 299,565 tonnes for 2022 and 377,388 tonnes

for 2023. During 2024, the assessment will be

extended to the Subsea Technologies, EMEA

and Asia Pacic operating segments.

Hunting PLC Annual Report and Accounts 2023 82Strategic Report Corporate Governance Financial Statements Other Information

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Ethics and Sustainability

Committee

Hunting Executive

Committee

Remuneration

Committee

TCFD Working

Group

Audit

Committee

ESG Steering

Group

Nomination

Committee

Hunting PLC Board

Climate Governance Framework

Governance

The Board of Hunting has put in place a robust climate-related

governance framework to oversee and deliver on its objectives going

forward. This governance framework is summarised below.

Disclosure (a) – Board oversight

The Chief Executive has been charged with

oversight and responsibility for all TCFD matters.

Since 2020, the Board has been briefed by

the Group’s central compliance and nance

functions on TCFD reporting requirements and

the work streams underway across the Group

to assess compliance.

This includes evaluation of the transition

and physical risks facing the Group and the

opportunities climate change presents to

the Company.

Disclosure (b) – Management’s

role in assessing climate risks

and opportunities

Members of the Group’s senior leadership team

including the Group Company Secretary, Chief

HR Ofcer, General Counsel and Director of

QAHSE are invited to meetings of the Ethics and

Sustainability Committee. These managers in

turn are supported by the Hunting Executive

Committee; a formal ESG internal steering group

comprising operational and nance staff; and a

TCFD steering group, the latter being charged

with developing formal reporting and new

strategies to curtail the Group’s carbon footprint,

to reduce its impact on the environment and to

provide direction on Hunting’s sustainability

ambitions. The responsibility of managing climate

risks is vested in the Executive Committee which

comprises the senior operational leaders of the

Company. The Group’s central compliance

function oversees TCFD external reporting and

compliance matters and works with the

Executive Committee to develop that Company’s

climate-related objectives.

Management completed a Group-level and

business unit-level climate risk register, which is

detailed on pages 85 to 89. As part of this

process, strategic opportunities were considered

by each business unit which formed part of the

Group’s wider plan to pivot revenue to more

non-oil and gas revenue and the new market

opportunities which underpin this strategy.

For more information of the Group’s wider

governance framework, please refer to the

Corporate Governance Report on pages

115 to 125.

Climate change perspectives and strategic

initiatives, including the pursuit of energy

transition opportunities as well as the pivot of

revenue to more non-oil and gas sales, are

therefore included in the Board’s strategic

planning discussions, which include merger and

acquisition opportunities being considered.

In 2021, the Company appointed

WillisTowersWatson (“WTW”) to assist in the

assessment of the Group’s physical risk prole,

based on the location of its current and non-

current assets. This exercise will be repeated

in 2024.

The Board maintains an Ethics and Sustainability

Committee to monitor Hunting’s overall

governance and reporting framework in the area

of climate change and wider ESG issues. The

Ethics and Sustainability Committee comprises

the non-executive Directors of the Company

(pages 112 and 113).

The Committee meets twice a year, with carbon,

climate and TCFD matters being regular agenda

items. This Committee also monitors, on behalf

of the Board, Hunting’s progress against its

current emissions reduction targets.

All members of the Board attend each meeting

of the Committee, with its activities and actions

completed during the year detailed on pages

128 to 130.

While the Ethics and Sustainability Committee

reviews these important non-nancial matters,

the Audit Committee retains key oversight of

Hunting’s public disclosures on these areas,

including the information contained in its

Annual Report and other Stock Exchange

announcements and the evaluation of the risk

prole of the Group in respect to climate change.

Further, the Audit Committee reviews the TCFD

disclosure, which includes the climate-related risk

assessment prepared by the Group’s central

nance function.

Hunting PLC Annual Report and Accounts 2023 83Strategic Report Corporate Governance Financial Statements Other Information

Base Case Scenario

Pledges Scenario Net Zero Scenario

2000 2010 2020 2030 2040 2050

120

100

millions of bopd

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Strategy

Disclosure (a) – Description of

risks and opportunities over the

short, medium and long term

Disclosure (b) – The impact

ofclimate-related risks and

opportunities

Hunting has not presented risks and

opportunities based on the geographic split of

its global operations or by the various industry

sectors where it sells products and services,

as recommended by part (a) of Strategy.

Hunting is a global energy services group

focused largely on the oil and gas industry and

therefore each of its global operating segments

are faced with the same climate change risks

and opportunities.

The opportunity to transition to non-oil and gas

related sales exists in all operating segments

across the Group, but notably in the North

America and EMEA operating segments, which

currently represent all of the Group’s non-oil and

gas revenue, and in the segments with high

proportions of OCTG related revenue. As such,

the non-oil and gas segment of Hunting’s

revenue prole is not a separate business unit.

Therefore, the Board believes the geographical /

sectoral split approach to climate change

analysis not to be relevant to Hunting.

Climate scenarios for evaluating transition

risks and opportunities

The Group uses three scenarios to evaluate

transition risks and opportunities:

• Business as usual scenario (aligned to 2.5°C

warming) – evolution of current policies and a

steady advancement of current and nascent

technologies;

• Middle case scenario (aligned to 2.0°C

warming) – global net zero achieved by 2060,

which incorporates policy response to the

current energy crisis as well as

decarbonisation commitments, but not as

swift as under the rapid transition scenario;

and

• Rapid transition scenario (aligned to 1.5°C

warming) – global net zero achieved by 2050

as prescribed by the Paris Agreement. This

reects immediate peak energy, rapid

hydrogen and carbon removal deployment

and a consumer shift.

In selecting these scenarios, the Group used

energy demand analysis from Wood Mackenzie

(see right) which analyses a range of climate

change scenarios as well as the latest energy

transition projections and oil and gas demand

scenarios from the International Energy Agency

(“IEA”), see graph on page 90, which is assumed

to be in a Stated Policies Scenario. The IEA

research included three scenarios: the Stated

Policies Scenario, the Announced Pledges

Scenario, and the Net Zero Emissions by

2050 Scenario.

Climate scenarios for evaluating physical

risks and opportunities

WTW has evaluated the longer-range climate risk

to the Group’s operating locations, applying the

following two scenarios up to 2050:

• Scenario 1 – RCP4.5 (an increase in global

temperature by 2-3°C by 2050); and

• Scenario 2 – RCP8.5 (an increase in global

temperatures by 4°C by 2050).

Source: Wood Mackenzie

It can be noted that in climate scenarios 1 and 2

there is an increase in the frequency and intensity

of weather events, in respect of:

(i) tropical cyclones;

(ii) re stress;

(iii) drought stress; and

(iv) precipitation.

Additionally, all other known risks are evaluated

by the Board under the Group’s current

operational risk programme.

The scenarios have been used to evaluate

climate-related risks and opportunities over the

short (0-5 years), medium (5-10 years) and

long-term (10+ years). The short-term period

aligns with the Group’s usual business and

nancial planning timeframe, the medium term

aligns with the business outlook beyond the

short term, and the long-term period represents

the timeframe by which the wide range of

uncertainties surrounding the energy transition

are widely expected to materialise.

Risks have been categorised as follows:

• Low – no impact to minor impact on the

Group’s protability and ability to achieve

strategic objectives;

• Medium – some impact felt to the Group’s

protability and ability to achieve strategic

objectives, requiring some mitigation plans

and action; and

• High – signicant impact to the Group’s

protability and ability to achieve strategic

objectives, therefore requiring critical and

urgent mitigation plans and action.

Scenarios for oil demand: 2020 to 2050

Hunting PLC Annual Report and Accounts 2023 84Strategic Report Corporate Governance Financial Statements Other Information

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Climate change risk analysis

Transitional risks

CATEGORY DESCRIPTION OF RISK MANAGEMENT ACTIONS IMPACT

1. Market

Risk rating:

Medium

Timeframe:

Long term

Financial impact:

Revenue

Hunting’s primary revenue streams

are derived from the oil and gas

industry.

The drive by many global

governments and economies to

reduce emissions may impact

long-term oil and gas demand,

which in turn will impact Hunting’s

long-term revenue prole.

The Board reviews a number of primary energy demand

scenarios developed by Wood Mackenzie and the IEA, which

include energy transition projections and oil and gas demand

scenarios to 2050. The former is presented on page 84 and

the latter on page 90. The Directors also regularly receive

reports from the Chief Executive on the short- to medium-term

outlook for oil and gas demand, given that this is a key revenue

driver for the Group.

From this analysis, the Directors believe that in the business-

as-usual scenario there is a robust outlook for oil and gas in

the long term i.e. to 2050 and beyond, which will drive strong

demand for Hunting’s energy-focused products through this

timeframe. The Directors will continue to monitor these

projections and government legislation and will also track its

customers and suppliers who are also developing compliance

to this long-range change to the energy industry.

As noted on pages 6 to 11, the Board is putting initiatives in

place to diversify its revenue streams, which do not rely on the

global oil and gas market, to minimise earnings volatility over

time but also to address this long-term revenue risk prole as

noted in the Chief Executive’s Statement on pages 18 to 23

and also on page 100.

As noted in the Market Summary on pages 24 and 25, market indicators

including rig count and drilling and production spend data, published by

Spears & Associates, support the Group’s wider nancial reporting needs

in the short term, including impairment reviews. In October 2023, the IEA

issued its annual energy outlook which provides a perspective on the

long-term changes to energy demand and its primary energy inputs. This

shows that the outlook for oil and gas, in a Stated Policies Scenario as

dened by the IEA, remains robust to 2050 with oil demand remaining at

for this timescale, with a small decline in natural gas demand.

The analysis from Wood Mackenzie provides a high level view of the

possible changes to global oil and gas demand and therefore to Hunting’s

revenue prole to 2050, which indicates possible reductions in oil and gas

revenue of c.50-60% from 2023 in the Middle Case and Rapid Transition

scenarios. These energy demand scenarios have implications for Hunting’s

long-term strategy as the Group’s products and services, and overall

revenue prole, are currently largely driven by oil and gas demand and

investment in the exploration and production of hydrocarbons,

notwithstanding the opportunities to pivot to non-oil and gas markets as

described below. The Board believes that the primary energy mix to 2050

supports Hunting’s long-term focus on energy, underpinned by the pivot to

non-oil and gas sales in this timescale, see opportunities below. The split

of revenue between oil and gas and non-oil and gas sectors, the relevant

metric for managing the risk, is disclosed in note 2 on page 182.

2. Technology

Risk rating:

Medium

Timeframe:

Long term

Financial impact:

Revenue

Hunting’s products and services are

primarily targeted at the oil and gas

industry, given its expertise and

know-how of this sector.

Should the pace of the energy

transition be more rapid than what

is currently projected, certain of the

Group’s product lines and

technologies will be less adaptable

to a lower carbon energy world or

could become obsolete.

The Directors believe that Hunting’s engineering excellence,

particularly within the Advanced Manufacturing group, has the

ability to diversify the long-term revenue streams of the Group.

As part of the business unit level risk assessment, the

adaptability to non-oil and gas markets was explored. Most

businesses across the Group believe that revenues from new

markets, using Hunting’s core competencies, will enable a

level of transition to occur and are therefore well placed to

develop non-oil and gas sales. In 2022, a global Energy

Transition sales group was formed to pursue carbon capture

and geothermal revenue.

International commentators believe that climate reduction commitments are

very challenging, given (a) the pace of global warming and (b) the absence of

technologies to assist in material carbon mitigation and reduction. The Directors

of Hunting believe that its strategic ambition to assist its clients in making

drilling operations safer and more efcient will place Hunting in a valuable part

of the energy transition narrative, as browneld developments extract oil and

gas more efciently, reducing the need for green eld project developments.

Hunting’s current technology offering enables the efcient and safe delivery

of hydrocarbons. While there is a risk that certain products could become

obsolete in the long term, the Directors believe that a number of its product

lines are directly applicable to the energy transition and non-oil and gas

markets which provides a level of resilience to its long-range revenue prole.

Hunting PLC Annual Report and Accounts 2023 85Strategic Report Corporate Governance Financial Statements Other Information

Climate change risk analysis continued

Transitional risks continued

CATEGORY DESCRIPTION OF RISK MANAGEMENT ACTIONS IMPACT

3. Labour and expenses

Risk rating:

Medium

Timeframe:

Short to medium term

Financial impact:

Expenditure

Historically, the oil and gas sector

has provided highly competitive

rates of pay and benets and,

therefore, has always been an

attractive sector to work in.

However, with recent volatility

across the industry, along with the

global climate agenda, there has

been a change in perception of the

global oil and gas sector, which may

present a continuing risk of

attracting and retaining skilled

talent. The consequence of this risk

is that employee costs may rise in

the short- to medium-term to

ensure Hunting can achieve its

strategic objectives.

The Directors have monitored labour risk during 2023 through

the Remuneration and Ethics and Sustainability Committees

to ensure possible labour market issues in Hunting’s various

regions of operation are minimised.

Hunting’s products and services are delivered by a highly skilled workforce

comprising of engineers, machinists and professional services staff. The

competition for talent remains a principal risk to the Company as noted on

page 102, with employment costs likely to increase in the long term, to

attract and retain employees to the oil and gas industry.

Hunting’s employee costs are disclosed in note 7 on page 186.

Energy costs – in 2023 total utilities costs amounted to c.$7m. It is possible

that as the energy transition progresses, the cost of electricity will increase

as more expensive primary energy sources are adopted.

It is expected that the impact will increase in each scenario, with the largest

impact expected in the rapid transition scenario.

4. Insurance and tax

Risk rating:

Low

Timeframe:

Short to medium term

Financial impact:

Expenditure

Hunting is faced with the likelihood

of increased operating costs,

including insurance and tax costs. It

is possible that Hunting’s insurance

costs could rise in the future, given

its presence in the global energy

supply chain in addition to the

location of certain facilities in the

Gulf of Mexico. Further, it is possible

that western governments will

introduce taxation on companies

based on carbon footprint.

The Board has announced a 2030 Strategy which will target

a material increase in non-oil and gas revenue by the end of

the decade.

This initiative, in part, is to support a less volatile earnings

prole, but also to minimise sector-related cost increases such

as Directors’ & Ofcers’ liability insurance seen across the

energy sector. Further, given that the Group has a relatively low

carbon footprint, compared to other energy companies such

as exploration and production businesses, any carbon-related

taxation is likely to be modest, given Hunting’s drive to reduce

scope 1 and 2 emissions.

Given the modest level of emissions produced by the Group, the Directors

believe that the potential tax cost to the Group is low.

The Group maintains a broad-based insurance programme covering many

risk areas. Property damage and business interruption policies are in place,

which cover potential losses due to severe weather events. Given the

location of certain of the Group’s facilities in Texas and Louisiana which are

subject to wind storms, it is possible that the cost of this insurance cover

will increase over time as the long-term risk prole of these operations

increases. However, the Directors believe that given Hunting’s diversied

operational footprint, the risk of loss of operations is low.

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Hunting PLC Annual Report and Accounts 2023 86Strategic Report Corporate Governance Financial Statements Other Information

Climate change risk analysis continued

Transitional risks continued

CATEGORY DESCRIPTION OF RISK MANAGEMENT ACTIONS IMPACT

5. Financial markets

Risk rating:

High

Timeframe:

Short to long term

Financial impact:

Capital and nancing

With the increased attention climate

change is being given by nancial

markets, the standing of energy-

related companies has come under

increased scrutiny in recent years.

Many investors who wish to invest

in the oil and gas sector look for

evidence of a Net Zero plan as part

of their investment screening.

Energy transition risk imputed by

shareholders, lenders and market

commentators has the potential to

impact funding support from equity/

debt nancial institutions.

The Directors believe that investors and lenders will be more

demanding in respect of the provision of nancing in the

future. However, this risk is partially mitigated by the Board’s

Hunting 2030 Strategy and its ongoing access to equity

capital markets.

The Group relies on equity and debt markets to fund its

businesses. These stakeholders are increasingly demanding

strong ESG and long-term sustainability credentials from

companies, and in the absence of this, is unlikely to fund

businesses which do not give it attention. The Group has

access to a $150m Asset Based Lending facility to 2026, with

discussions already underway with key stakeholders to identify

key ESG metrics to support future renancing.

The Hunting 2030 Strategy, Climate policy and ability to diversify revenue

streams to non-oil and gas are considered to partially mitigate the impact.

Capital investment – it is likely that new investment in facilities will occur

over time to align with the physical risk to the Group’s facilities noted on

page 89, which will require funding. However the Directors believe that

Hunting’s diverse operational footprint will in the short- to medium-term

mitigate the majority of operational risks as many sites are congured in

similar ways, minimising the requirement for access to debt in this regard.

Dividends – the Directors note that shareholder distributions are a key

element to the Group’s investment case and will endeavour to support this

strategy in the long term. Capital allocations may change over time to

enable the Group to pivot to non-oil and gas revenue streams, which may

lead to lower distributions.

Acquisitions – Hunting has a strategy to develop its non-oil and gas

revenue which, in part, will be funded by internally generated cash ows.

6. Regulatory, legal and compliance

Risk rating:

Medium

Timeframe:

Short to medium term

Financial impact:

Expenditure

Capital and nancing

Regulatory and compliance risk

with respect to climate has

increased, including the introduction

of TCFD reporting requirements and

the demand for long-term planning

disclosures to address climate

change. The Directors of Hunting

believe that regulatory and

compliance costs are likely to

increase over time as companies

address carbon and climate issues,

which will likely require additional

human capital to meet stakeholder

expectations as well as to develop

and implement Net Zero strategies.

As noted in the Risk Management section on pages 96 to 105,

the Directors believe that regulatory compliance with climate

change legislation could differ substantially given the various

government and political agendas where Hunting’s

stakeholders are located.

Management are continuously monitoring regulatory and

compliance changes across its various jurisdictions.

International policies and legislation in respect to climate change and

climate action have increased in pace, examples of which include new

reporting procedures introduced into the UK for publicly-listed companies

along with the encouragement for all businesses to commit to a Net Zero

ambition. Further to this, initiatives such as the UK’s Energy Savings

Opportunities Scheme, which required energy audits of businesses to

identify carbon-reduction measures, provide an indication of western

governments’ ambitions to achieve carbon containment.

It is likely that climate-related legislation will increase over time, which will

lead to higher compliance, legal, operational and administrative costs to

keep pace with these new regulations.

Climate-related litigation is a further potential cost pressure which may

materialise over time, as activism increases.

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Hunting PLC Annual Report and Accounts 2023 87Strategic Report Corporate Governance Financial Statements Other Information

Climate change risk analysis continued

Transitional risks continued

CATEGORY DESCRIPTION OF RISK MANAGEMENT ACTIONS IMPACT

7. Reputation

Risk rating:

High

Timeframe:

Short to long term

Financial impact:

Capital and nancing

Many stakeholders have become

more aware of climate change,

linking a Company’s response to

the climate debate to reputation.

Many companies are beginning to

respond to this reputational risk by

addressing stakeholder concerns,

which range from strong carbon

reduction commitments to

publishing energy transition

strategies.

The Directors believe that a proportionate response to climate

change planning is being implemented, which protects

shareholders’ interests, including earnings and capital returns.

Over time, the Directors will increase the disclosures in this

area as longer-term plans are agreed.

The Directors monitor the Company’s market capitalisation

against the value of its net assets which provides an indication

of how various investors view Hunting’s response to climate

change.

Management are focused on closer investor relationships and

more regular interactions, and further transparency on strategy.

Reputation risk is not easily quantied.

Hunting’s association with the oil and gas industry is believed to be a high

risk in the long term in respect to investor and shareholder perceptions,

given the negative media attention of traditional primary energy sources.

The Directors believe that Hunting’s strong relationships with customers

and suppliers will support its ambition to play a key role in the energy

transition, which will support the Board’s ambitions to pivot revenue to more

non-oil and gas sources. Further, the Directors believe that secure energy

sources from regions such as North America continue to play a key role in

global economic stability.

Hunting’s reputation and standing in the energy industry is critical to its

long-term resilience. Participation in the oil and gas industry has a potentially

negative impact on reputation which may manifest itself in a lower share

price and market capitalisation of the Company.

However, this is offset by the positive contribution of the Group’s products

and technology relevant to the energy transition.

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Hunting PLC Annual Report and Accounts 2023 88Strategic Report Corporate Governance Financial Statements Other Information

Climate change risk analysis continued

Physical risk

CATEGORY DESCRIPTION OF RISK MANAGEMENT ACTIONS IMPACT

8. Assets

Risk rating:

Medium

Timeframe:

Long term

Financial impact:

Revenue

Assets and liabilities

The global operating footprint of the

Group is potentially exposed to the

acute and chronic physical risks of

more volatile and severe weather

events due to climate change.

These events have the ability to

damage the Group’s operating

facilities and property, plant and

equipment, thus impairing Hunting’s

ability to generate revenue.

Additionally, in terms of chronic

physical risks, higher temperatures

are likely to increase the

requirement for operational and

ofce cooling, but there will likely

be a minor reduction in requirement

for space heating in winter.

In December 2021, the Board and the Ethics and Sustainability

Committee reviewed an independent report from Willis Towers

Watson (“WTW”) that presented the Group’s physical risk

prole with respect to climate change and which presented

analysis of Hunting’s operating locations and their respective

risk proles against a variety of weather events. The report

also detailed a longer-range risk analysis incorporating a

number of climate scenarios and how this could potentially

impact the Group’s operations. The graph on page 90

presents the Group’s facility exposures to severe weather

events based on the two physical risk climate scenarios.

Given the concentration of facilities in Texas and Louisiana,

locations that periodically experience tornadoes and wind

storms, c.80% of the Group’s operating locations are

considered to be in higher-risk areas. All facilities are built to

withstand these weather events, which minimises production

downtimes when these events occur. Recent weather events

in the US have shown that facilities facing such weather are

only ofine for a few days at a time.

The Directors believe that Hunting’s long-term presence in

Louisiana and Texas, which periodically suffers from tornadoes

and other extreme weather events, has given the Group strong

experience in managing this risk. The Group’s operating sites

are largely unchanged since 2021. The WTW analysis will be

refreshed in 2024.

As considered as part of the Group’s strategic planning, it is

expected that the majority of products and services offered

by Hunting can be manufactured in multiple facilities, which

mitigates the risk of loss of revenue.

There is not considered to be a signicant difference in weather events

between the two scenarios in respect of the Group’s exposure to physical

risks, with only a minor increase in the frequency and intensity of such

events in scenario 2, other than in relation to heat stress, which intensies

further in scenario 2.

The graphs on page 91 present the insured asset values and revenue risk

of the Group, by location, as a function of the weather event scores

independently applied by WTW. WTW applied a risk factor to 14 weather

events of between 0 and 5, with the maximum possible score of 48 for all

weather events.

The total insured value gure is the value of assets held at each location,

which are covered by Hunting’s global insurance programme and which

covers both property damage and business interruption insurances. It can

be noted that virtually all facilities reported a weather risk score of between

10 and 30, with only a small number of facilities recording a higher

concentration of insured assets by value.

The Board believes that the overall asset risk is mitigated across the

Group’s diversied physical global operations.

The Directors have also received reports detailing where key product lines

are manufactured and the relative climate risk associated with each of these

sites. Similar to the asset and weather risk chart, the Directors have

reviewed the Group’s revenue by operating location as a function of WTW

weather event scores.

The Board understands which facilities are key revenue generators and the

risk of loss should a weather event hit a particular facility. It can again be

noted that a small number of facilities have a higher concentration of

revenue, however, the overall revenue risk is mitigated across the Group’s

diversied global operations.

Higher peak and average temperatures are likely to lead to an increase in

cooling capacity, required for facility cooling, possibly leading to higher

capital costs to expand or upgrade equipment and also higher operational

costs. However, the Group’s facilities are located at sites that are not at risk

of signicant increases in heat stress so the impact is expected to be low.

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Hunting PLC Annual Report and Accounts 2023 89Strategic Report Corporate Governance Financial Statements Other Information

Oil Coal Natural gas Share of fossil fuels in TES (right axis)

20501990 2000 2010 2020 2030 2040

300

500

450

400

350

250

200

150

100

60%

100%

90%

80%

70%

50%

40%

30%

20%

10%

Exajoules

Current – 2023 RCP4.5 – 2050 RCP8.5 – 2050

Heat stressPrecipitation

Coastal ood

River ood Drought stressFire stressTropical cyclone

60%

100%

90%

80%

70%

50%

40%

30%

20%

10%

Percentage of facilities operated by the Group

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Source: IEA – World Energy Outlook 2022

Source: Company/WillisTowersWatson

Climate opportunities

Resource efciency

The Group retains an ongoing lean manufacturing

programme that is aimed at increasing

productivity and reducing costs of operation.

In 2023, the cost saving estimated by this

programme was $1.4m (2022 – $1.4m).

Key resource inputs for the Group include the

availability of power and water.

Energy source

The Group’s carbon emissions footprint is noted

on pages 94 and 95.

The Board believes that simple, but meaningful,

carbon reduction strategies will drive down the

Group’s emissions and include:

i. Moving electricity contracts for Group facilities

to renewable-based energy arrangements;

ii. Building a zero emission vehicle eet over time,

including heavy and light duty vehicles and the

provision of all-electric cars to relevant staff;

iii. Installation of solar panels on relevant facilities,

for a zero emission base load energy feed; and

iv. Tree and grass planting strategy at Group

facilities to offset residual carbon emissions.

Products and services

The Directors of Hunting have assessed the

opportunities that climate change presents to the

Group. These opportunities are considered to

exist in each scenario but would be expected to

accelerate and happen more swiftly in the Rapid

Transition and Middle Case scenarios.

i. Participation in non-oil and gas primary

energy development

An area of focus within the global energy industry

is geothermal energy development. These

projects present a long-term opportunity for the

Company to provide Oil Country Tubular Goods

(“OCTG”) premium and semi-premium

connections and accessories to operators.

Hunting has industry-leading products and

expertise in this area and therefore accessing

these markets is believed to be relatively low risk.

The Group has analysed the global market for

geothermal energy and believes that the Asia

Pacic and North America regions hold good

opportunities to develop revenue in this sector

given the number of projects announced over

the past two years.

The Directors also note that a number of the

Group’s major customers are also commencing

the climate journey, with energy transition plans

being announced. Hunting’s relationship with key

exploration and production companies and

international energy service groups has been

established over many years, with Hunting being

a trusted member of the global energy supply

chain. The Board therefore believes that Hunting

can successfully leverage its brand and

reputation to remain a key participant in the

energy transition.

IEA projected fossil fuel demand: 1990-2050

Facility exposure to severe weather events based on RCP4.5 and RCP8.5

climate scenarios to 2050

Hunting PLC Annual Report and Accounts 2023 90Strategic Report Corporate Governance Financial Statements Other Information

1600 20 40 60 80 100 120 140

Risk score

1600 20 40 60 80 100 120 140

Risk score

Core

Competencies

Systems Engineering

Bespoke Manufacturing

Metallurgy & materials expertise

Innovation

Premium service culture

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Source: Company/WillisTowersWatson

ii. Participation in carbon capture

and storage projects

As noted in the Market Summary, on page 26,

a large number of carbon capture and storage

projects are to be completed within the 2025

to 2030 timeframe, to offset carbon dioxide

build-up in the atmosphere.

These projects, which require carbon dioxide

re-injection into known oil and gas elds, or

greeneld developments, present a long-term

opportunity for the Company to provide OCTG,

premium and semi-premium connections and

accessories to operators.

The Group’s Energy Transition sales group is

exploring stronger participation in this market.

iii. Diversication into other non-oil

and gas sectors

The chart above illustrates the Group’s key

product lines and core competencies and

demonstrates that the majority of Hunting’s

businesses have expertise to diversify into other

growth sectors, such as medical, space, aviation

and naval. Hunting has launched a medium-term

strategy to materially increase non-oil and gas

sales by 2030, which is supported by this

analysis and has taken steps to drive new sales,

particularly within the Group’s Advanced

Manufacturing group.

These opportunities are explained further as part

of the Hunting 2030 Strategy on pages 6 to 11.

Total invested value (£m) by facility vs Weather risk score (max = 48) Hunting’s core competencies – current and target markets

Revenue ($m) by facility vs Weather risk score (max = 48)

Hunting PLC Annual Report and Accounts 2023 91Strategic Report Corporate Governance Financial Statements Other Information

HighLow Low/Moderate Moderate Moderate/High

Level of Adaptability

Number of business units

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Supply chain

Our commitment to the delivery of innovative,

high-quality, and reliable products is of material

importance to the achievement of our ‘total

customer satisfaction’ goal, and this is reected

in our Quality Policy and our Sustainability

Framework.

Hunting’s total commitment to Quality is

shown through operational excellence, and a

comprehensive Quality Management System

(“QMS”) supported by strong management

oversight, which includes supply chain risk

management.

The Group’s supply chain is predominantly

related to raw material supplies, including the

responsible resourcing of readily available

materials such as carbon steel, nickel, and

chrome-based specialist steel alloys which

are used in the manufacture of Hunting’s

various products.

Traditionally, these materials constitute a very

low risk in terms of availability and price changes.

Over the last few years, due to geopolitical

and market factors, we have seen signicant

supply chain disruptions, including supply chain

ination and the extension of lead times of

critical components. This has resulted in a

strong surge in demand, price increases and

uncertain availability.

Measuring and reducing carbon emissions

across the Company’s supply chain is intricate

and challenging, but Hunting’s role in this effort

is driven by products which deliver more efcient

drilling procedures. The Company is increasing

its efforts to communicate its carbon reduction

ambitions to its supplier base, through a Supplier

Code of Conduct which was introduced in

Q4 2022.

A small proportion of our products contain

electronic components which can contain critical

materials as dened by the National Research

Council. These are a very small proportion of our

purchased materials and constitute a low risk to

the Company. However, for critical materials such

as tungsten, required for Hunting Titan’s charge

production, we carry out regular risk assessments

to identify potential supply chain risks. In addition,

all other identied critical raw materials and/or

components are regularly reviewed, forecasted

for sales, availability, and projected market

pricing, to create a purchase plan.

At all times, Hunting has existing mitigation

plans in place should there be a supply chain

interruption. For example, we maintain, and in

some circumstances have increased, a safe

stock, or buffer stock, for critical materials and

components. We also have a highly diverse range

of approved suppliers in place as part of our

supply chain, for example ranging from Chinese

to domestic US steel mills. In some areas, we

have expanded our approved supplier list.

Adaption and mitigation

As noted above, the Group is pivoting revenue

to more non-oil and gas sources, including the

development of Energy Transition revenue from

geothermal and carbon capture opportunities.

Investment in research and development for new

products and technologies is a strategic objective

to maintain market leadership in its core markets.

In 2023, research and development expenditure

totalled $6.9m (2022 – $5.8m).

Acquisitions and divestments

As noted elsewhere, the Group’s ambition to

develop more non-oil and gas sales will be

achieved through targeted acquisitions and an

overall strategic expansion of the Group’s

portfolio. The Group continues to review and

monitor opportunities in this area.

Access to capital

The Group maintains a $150m Asset Based

Lending facility which matures in 2026. The

Directors believe that Hunting continues to have

access to both equity and debt markets, given

the strength of its position in the oil and gas,

and wider energy industry.

Business unit resilience and adaptability

Disclosure (c) – climate

resilience based on a 1.5°C

scenario

As part of the TCFD risk assessment process,

disclosures from each of the Group’s business

units were requested, which included details of

the resilience of its operations and business

model in a 1.5°C climate scenario by 2050. While

Hunting is currently focused on the oil and gas

sector, the Group retains diverse manufacturing

capabilities and participates in sectors as diverse

as aerospace, medical and space.

A key factor that determines the impact on the

Group is the adaptability of our businesses to

transition to different sectors. Until our plans are

further developed we have taken a conservative

approach and have considered how adaptable our

businesses are with minimal capital investment.

Source: Company

Hunting PLC Annual Report and Accounts 2023 92Strategic Report Corporate Governance Financial Statements Other Information

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Furthermore, for some of our businesses, the

opportunities to adapt will depend on the

potential development of new markets such as

carbon capture and storage, the use of hydrogen

as an energy source together with the expansion

of the geothermal market and our ability to

compete in these areas. The majority of the

Group’s businesses report that they have a

moderate or high level of adaptability if energy

markets change materially.

We have progressed scenario analysis in 2023

to allow us to further test the resilience of our

strategy against the three climate scenarios

identied above with reference to evaluating

transition risks and opportunities, one being a

1.5°C scenario. The scenario analysis leverages

the Group’s extended forecast out to 2028 and is

extrapolated to the long term using growth rates

and assumptions that are consistent with other

forward-looking nancial statement elements. In

the analysis modelled, the Group is considered

resilient to climate-related scenarios. The analysis

will continue to be evolved in 2024.

Risk Management

Hunting’s climate-related Risk Management

disclosures are detailed on pages 84 to 89.

As part of Hunting’s TCFD reporting, Hunting’s

central compliance function prepares an annual

business unit climate risk assessment, which

assesses the short, medium, and long-term

risks and opportunities of climate change. The

assessment also gives a deeper consideration to

Hunting’s longer-range risks, including revenue

and expenditure risks in addition to analysis of

major cash generating units within the Group in

respect to the impact of climate change.

Given the Group’s focus on the changing oil and

gas industry and the scrutiny of climate change

by investors and lenders, the Directors’ view is

that climate change risk is a principal risk to the

Group and has been embedded into our Risk

Management processes to which the Group’s

senior leadership team can respond in an

appropriate manner. Further information on

climate change and energy transition risk can be

found on page 101 within Risk Management.

The Group’s central compliance function rolls

out a specic climate-change risk assessment

process to be completed by each business unit

within the Group to enable an integrated risk

Disclosure (a) – climate risk

identication

Each business unit within the Group completes a

broad-based risk assessment three times a year.

The results of the process are consolidated into

a Group-level risk register, which includes details

of the risk and the associated mitigating controls.

This includes nancing, reputational, strategic, legal

and insurance risk as well as other operational

risks faced by the Company. The Group’s Audit

Committee reviews the Group-level risk register

three times during the year as part of its annual

schedule of work with input from the Group

Finance Director, Group Financial Controller,

Group Risk Manager and the Internal Auditor. In

2023, a Group-level broad-risk assessment was

also introduced, bringing together responses

from global heads of functions.

The Group-level risk assessment was followed by

a workshop to pressure test responses and gain

a greater understanding of strategic, legal, nancial

and operational impacts of climate change and

energy transition on ongoing Hunting strategy.

In 2022, the Group’s central compliance function

introduced a climate-specic risk questionnaire

to all businesses within the Group, which asked

for key information on transition and physical

risks related to climate change, as well as

strategic opportunities as the energy transition

accelerates.

The risk assessment framework was based on

the TCFD guidance as illustrated below.

TCFD risk assessment chart

Policy and legal Resource efciency

Technology Energy source

Market Products/services

Reputation Markets

Acute

Revenues

Resilience

Assets and liabilities

Balance

Sheet

Opportunities

Income

Statement

Risks

Strategic planning

Risk management

Financial impact

Statement of

Cash Flows

Chronic

Expenditures Capital and nancing

Source: TCFD – Recommendations of the Task Force on Climate-Related Financial Disclosures – 2017

Transition risks

Physical risks

Opportunities

Hunting PLC Annual Report and Accounts 2023 93Strategic Report Corporate Governance Financial Statements Other Information

The results of the annual process are reviewed

and consolidated by the Group’s central

compliance and nance functions and fed into

the scenario analysis presented on page 92.

This analysis was reviewed by the Directors at its

meeting in February 2024 and will be debated

further at the meeting of the Ethics and

Sustainability Committee in June 2024.

Further, this analysis will continue to be

completed annually as part of the Group’s wider

risk management procedures.

To prioritise climate risk, in consideration of the

principal risks, climate questionnaires feed into

the Group-level risk matrix. As a result, climate

change and energy transition risk is fourth from

the top in the principal annual risk list, with

further Group-level discussion around

interdependencies to understand how this

risk impacts on other principal risks.

Disclosure (b) – climate risk

management

Following the risk identication process,

management has been challenged to develop

processes and procedures to mitigate and

reduce its climate-related risks and impact.

This includes the reduction of the carbon footprint

of each business unit; management of the

physical risk prole of each business or facility,

which includes dialogue with the Group’s insurers

and other business units to develop production

synergies for Hunting’s product portfolio; and the

broader efforts to decarbonise the Group’s

supply chain, whether that be to develop non-oil

and gas sales such as geothermal or carbon

capture or to introduce more efcient products

and services to reduce the environmental impact

of our customers oil and gas activities.

The central compliance function oversees the

Group’s annual insurance renewal for all of

Hunting’s businesses, working with specialists

from WTW and in 2021 completed a physical

climate risk assessment for Hunting’s climate

exposures which extends to 2050. This is due

to be updated in 2024.

Disclosure (c) – integration of

climate risk identication and

management

The climate-related governance processes

highlighted on page 83 have been introduced to

allow the Board to have direct oversight of the

risks, opportunities and climate-related strategies

being considered by the Group’s management.

There is also direct access between the Directors,

Chief Executive and senior management team to

enable climate matters to be challenged.

Further, the senior management team has

empowered each business unit leader to address

climate matters on a decentralised basis, to

enable regional considerations to be integrated

into the Group’s overall processes. In addition,

the Board has ensured that nancially-orientated

risks are reviewed by the Audit Committee,

with the broader strategic and operational risks

being reviewed by the Ethics and Sustainability

Committee to ensure broad-based challenge

is given to management and all levels of the

workforce on this important area.

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Metrics and Targets

Disclosure (a) – metrics

To monitor Hunting’s climate-related risks and

opportunities, the Group has elected to adopt

a broad set of metrics to enable investors to

monitor climate-related risks and opportunities.

These are presented in the accompanying table

on page 95.

Disclosure (b) – scope 1 and 2

emissions

The Group currently collects scope 1 and 2 GHG

emissions data based on the Greenhouse Gas

Protocol, published by the World Resources

Institute. The data is consolidated on an

operational control basis, through the Group’s

central nance global nancial consolidation

system. Carbon dioxide equivalent emissions

are calculated using factors published by DEFRA

in the UK to derive its total scope 1 and 2

emissions. Scope 1 emissions in 2023 were

5,612 tonnes (2022 – 5,778 tonnes) and scope 2

emissions were 18,430 tonnes (2022 – 16,644

tonnes). Hunting’s total scope 1 and 2 emissions

have been assessed to be 24,042 tonnes

(2022 – 22,422 tonnes).

Scope 1 and 2 emissions, when comparing 2023

outcomes to the prior year indicate a slightly higher

result. This small increase has been achieved

despite revenue increasing materially in the year,

reecting the attention management is giving to

containing its carbon footprint.

As noted on pages 70 and 71 the Group has

analysed the scope 1, 2 and 3 emissions of the

Hunting Titan operating segment, from which an

extrapolation of the Group’s scope 3 inventories

was made.

Based on this analysis, Hunting Titan’s scope 1,

2 and 3 greenhouse emissions were analysed to

be c.100,393 tonnes in 2022, with Titan’s 2022

scope 1 and 2 footprint being 5,455 tonnes and

scope 3 being 94,938 tonnes. Scope 3 emissions

for Titan, therefore, equate to c.95% of the

emissions of the operating segment.

Using this analysis as a proxy for Hunting’s total

GHG emissions data, a Group scope 1, 2 and 3

emissions data set, based on a cost of sales

method of extrapolation, has been published this

year. The Group’s total scope 1, 2 and 3 GHG

emissions have, therefore, been extrapolated to

be 299,565 tonnes for 2022 and 377,388 tonnes

for 2023. This is a partial assessment of scope 3

inventories, given that eight of the 15 pillars have

been analysed. This use of extrapolation of 2022

data to deliver a 2023 scope 3 gure, therefore,

makes Hunting non-compliant with the relevant

Listing Rule.

The data collection and modelling exercise

completed in the year has, however, enabled a

framework of data collection to be put in place,

with management condent of being fully

compliant with the TCFD reporting guidelines in

2024. Further work is planned in 2024 to increase

the number of pillars being reported against in

addition to extending the analysis to the Group’s

Subsea Technology, EMEA and Asia Pacic

operating segments.

Disclosure (c) – targets

In March 2023 the Company announced new

GHG emissions targets, with the Group’s scope

1 and 2 emissions reduction now targeted at

50% below the 2019 base-year by 2030. This

equates to absolute scope 1 and 2 emissions of

17,937 tonnes by 2030. The Group has also

committed to a long-term Intensity Factor target

of less than 30 by 2030. The Group has also set

a non-oil and gas revenue target of 25% by 2030.

Hunting PLC Annual Report and Accounts 2023 94Strategic Report Corporate Governance Financial Statements Other Information

Task Force on Climate-Related Financial Disclosures (“TCFD”) continued

Sector specic and cross-sector metrics and targets

METRIC DESCRIPTION OF METRICS/REASON FOR ADOPTION 2023 2022

Revenue – oil and gas:

Hunting’s core markets are oil and gas related, therefore the long-term monitoring of this measure assists in the

understanding of the Group’s resilience. 853.2 678.2

Revenue – non-oil and gas:

Hunting’s longer-term resilience can, in part, be monitored by the development of non-oil and gas sales as the Group seeks

to diversify its revenue streams. 75.9 47.6

Expenditure – total cost of electricity:

The long-term cost of energy, including the purchasing of renewable energy, is a key metric to understanding the nancial

impact of the energy transition. 5.6 4.5

Expenditure – insurance premiums:

£m

The cost of insurance, including product liability and property damage/business interruption cover, is a key metric in

understanding the Group’s nancial and asset risk prole. 4.4 4.3

Expenditure – research and development:

The long-term diversication to non-oil and gas revenue will require investment in new technology and will form part of the

Group’s research and development activities. 6.9 5.8

Assets and Liabilities – capital expenditures:

The investment in non-current assets provides an indication of the long-term viability of the Company’s investment case.

34.6 22.0

Scope 1 GHG emissions:

tonnes

Hunting’s scope 1 carbon footprint provides investors data on the Group’s contribution to climate change.

5,612 5,778

Scope 2 GHG emissions:

tonnes

Hunting’s scope 2 carbon footprint provides investors data on the Group’s contribution to climate change.

18,430 16,644

Scope 3 GHG emissions:

tonnes

Hunting’s scope 3 carbon footprint provides investors data on the Group’s contribution to climate change.

353,346 277,143

Water consumption:

’000s cubic metres

Hunting’s water consumption provides investors with data on this impact on the planet.

198 164

Lean manufacturing savings:

The Group’s drive for higher efciencies in its operations provides an indication of its efforts to lower its environmental impact.

1.4 1.4

Carbon emissions offset cost:

€m

The cost of purchasing carbon credits (scope 1 and 2 emissions only) to become a Net Zero business.

1.4 2.2

Market capitalisation:

The value of the Group’s equity provides an indication of the future value of the Group’s cash generating assets.

620.5 662.4

Net asset value:

The book value of the Group’s assets, compared to the Company’s market capitalisation, provides an indication of the

future value investors place on the Group’s assets. 957.1 846.2

Renewable electricity purchased:

GWh

The level of renewable energy purchased provides an indication of the Group’s drive to lower emissions.

11.4 8.7

Assets exposed to heat stress risk:

The proportion of assets exposed to heat stress risk provides an indication of the physical risk exposure of the Group.

74 74

Assets exposed to precipitation risk:

The proportion of assets exposed to precipitation risk provides an indication of the physical risk exposure of the Group.

70 70

Hunting PLC Annual Report and Accounts 2023 95Strategic Report Corporate Governance Financial Statements Other Information

Managing risks in a changing world

We operate in a complex global environment which is highly regulated

and demands high specication products that meet stringent quality

criteria. Hunting’s risk management and internal control processes are

designed to appropriately mitigate risks inherent in this sector, while

allowing the Group to achieve its strategic objectives and deliver value

to shareholders in a changing world.

Identifying our risks

Effective risk identication aims to enable

Hunting to make meaningful and informed

strategic decisions and deliver long-term

success. Under Hunting’s decentralised

philosophy, risk management acts as a

“challenger” to pressure test business risks

and mitigation, while local management is

empowered to manage the risks in their

respective markets. Effective risk management

further helps us comply with the UK Corporate

Governance Code requirements, implement

relevant controls and pursue new opportunities

and markets while mitigating risks in a rapidly

changing industry and external environment.

We take both a bottom-up and a top-down

approach to risk management and we continue

to improve alignment between them. Three times

a year, local management formally reviews risks

faced by their business, based on current

trading, prospects and the local market

environment. The review is a qualitative

assessment of the likelihood of a risk

materialising and the probable nancial impact

if such an event were to arise. All assessments

are performed on a pre- and post-controls basis,

which allows management to continually assess

the effectiveness of its internal controls with

separate regard to mitigating the likelihood of

occurrence and the probable nancial impact.

These principal local risks are reported to Group

management, where a Group-level workshop is

performed to pressure test the risks and their

controls as well as ll in any gaps. In addition,

to heighten Group monitoring of the potential for

fraud, local management reports on local fraud

risk irrespective of its perceived potential low

impact on the local business.

The local risks that have the greatest potential

impact on the Group are identied from these

assessments and incorporated into the Group

Risk Register, which is also reviewed by the

Audit Committee three times a year and is

scrutinised and challenged by the Board. An

appropriate executive Director, together with

local management, is allocated responsibility

for managing each separate risk identied

in the Group Risk Register.

To further understand Group-level risks and

the interdependencies between them, a new

Group-level risk assessment was introduced

in 2023, which included input from members

of the executive team and additionally, their

direct reports.

To further pressure test the responses, a senior

management strategy workshop session was run

to understand top principal risks and their impact

on Hunting’s strategy and long-term planning.

Managing our risks

The management of each business unit has

responsibility for establishing an effective system

of controls and processes for its business, which,

at a minimum, meets the requirements set out

in the Group Manual and complies with any

additional local requirements. Strategic plans,

annual budgets and long-term viability nancial

projections are formally presented to the Board

for adoption and approval and form the basis for

monitoring performance.

Hunting’s internal control system, which has

been in place throughout 2023 and up to the

date of approval of these accounts, is designed

to identify, evaluate, and manage the principal

risks to which the Group is exposed, as well as

identify and consider emerging risks to which the

Group may be exposed to in the future. Internal

controls are regularly assessed to ensure they

remain appropriate and effective.

Business unit management completes an

annual self-assessment of the nancial controls

in place at their business unit. The assessment

is qualitative and is undertaken in context with

the recommended controls identied within

the Group Manual. Gaps between the

recommended controls and those in place are

assessed and improvements are actioned within

a targeted timeframe when these are identied

as a necessary requirement. Results of the

assessments are summarised and presented

to the Audit Committee annually.

This system of internal control is designed to

manage rather than eliminate risks, therefore it

can only provide reasonable but not absolute

assurance against material misstatement or loss

in the consolidated nancial statements and

meeting internal control objectives.

The Board recognises that a number of risks

are not within the direct control of management,

including energy market factors such as

commodity pricing and daily supply/demand

dynamics driven by economic or geopolitical

movements and climate change.

These factors are regularly assessed by the

Board and are considered alongside the risk

management framework operated by the Group.

We also use insurance as a risk mitigation tool.

The Group monitors and reviews new UK

Listing Rules, the Disclosure Guidance and

Transparency Rules sourcebook, accounting

standards, interpretations and amendments,

legislation and other statutory requirements.

Emerging risks

Alongside the process of identifying the Group’s

current risks, local and Group-level management

is challenged to identify and consider emerging

risks that may impact the Group.

Management monitors emerging risks through

observing press comment including industry-

specic journals, discussions with shareholders,

advisers, customers and suppliers, attendance

at structured forums, review of comments

published by other companies, review of

insurance company risk assessments, and

internal debate by senior executives.

Emerging risks identied were: increasing climate

regulations, an ageing workforce, and articial

intelligence although further developments to

emerging risk identication are underway.

Risk Management

Hunting PLC Annual Report and Accounts 2023 96Strategic Report Corporate Governance Financial Statements Other Information

Risk Management continued

Board

• Determines the Group’s culture and mission;

• Sets the risk management framework; and

• Ensures management processes and internal

controls are effective in identifying the Group’s

principal risks and emerging risks.

Ethics and Sustainability Committee

• Monitors key non-nancial matters,

including human capital, HSE and

Quality Assurance;

• Reviews the Group’s carbon and climate

data; and

• Reviews bribery and corruption, modern

slavery and sanctions procedures.

Audit Committee

• Oversees the Group’s risk management

processes;

• Reviews business risks and considers

emerging risks; and

• Gains assurance that the risk

management processes and controls

are effective.

Assurance – Internal Audit

Hunting’s internal audit

department reviews internal

controls and risk management

processes for their existence,

relevance and effectiveness.

Actions are recommended and

graded in terms of importance

and timeliness for change.

Group Management

• Establishes detailed Group policies

and procedures;

• Manages centrally-controlled risks; and

• Reviews segment and business unit risks.

Segment and Business Unit Management

• Ensures Group policies and procedures

are applied; and

• Manages business unit controlled risks.

Overview of risk governance structure

The Board has set risk management roles and responsibilities as illustrated.

The diagram below shows a high-level governance structure for risk management.

Strengthening our risk framework in 2023

We continue to enhance and develop our risk

management and mature our risk processes to

make them more valuable to both the business

and long-term strategy. Over the course of the

year, we have:

• Appointed a stand-alone Group Risk Manager

role as part of the reorganisation of the central

nance team. The new role has been tasked

with developing the existing risk management

framework, integrating the approach to

business risk and ESG risk, and improving the

quality and sophistication with which risk is

managed and reported;

• Introduced a Group-level risk assessment,

which serves to understand strategic and

operational principal and emerging risks from

the Group level;

• Run a risk workshop in the annual senior

strategy meeting to supplement the written

top-down Group-level risk assessment and

pressure-test business risks; and

• Developed a long-term timeline for risk

management to enhance the current risk

processes and risk framework, and help

Hunting meet its long-term strategic objectives.

Hunting PLC Annual Report and Accounts 2023 97Strategic Report Corporate Governance Financial Statements Other Information

Principal Risks

The extent of Hunting’s exposure to any one risk

may increase or decrease over a period of time.

This movement is due either to a shift in the prole

of the risk arising from external inuences or is due

to a change in the effectiveness of the Group’s

internal control processes in mitigating the risk.

A detailed description of each principal risk, the

controls and actions in place and the movement

in the year are given in the following section.

Key changes to our principal risks

In alignment with the Hunting 2030 Strategy and

external environments, a review of principal risks

has been undertaken, resulting in changes to

several risks as well as an increase in the number

of principal risks published. The following risks

have been either evolved, added, escalated,

or de-escalated due to the evolving strategic

initiatives, internal and external pressures,

changes in terminology and enhancements

to risk identication processes. The following

changes were observed:

• Increased competition and market

consolidation has been changed from

“increased competition” risk to include the

current market trends;

• Climate change and energy transition has

been renamed from “climate change” to

include the wider scope of transition risks

and opportunities;

• Third-party risk has been introduced and

includes a wide spectrum of third party and

supply chain risks including non-compliance

of partners and joint ventures, agents,

and distributors;

• Acquisition risk has been introduced into

the principal list and includes a wider range of

associated acquisition risks. It was previously

disclosed as “overpayment for acquisitions

or capital expenditure”;

• Cyber security is a new principal risk.

Components of this risk include high-impact

cyber security attacks, data leakage, and

server outages;

• Loss of key executives or staff and

shortage of skilled labour expands the original

risk of “loss of key executives” to also include

the worldwide skilled-labour shortage risk;

• Increased quantity and complexity of

changing global rules and regulations is a

new risk and includes increased tax regulation,

increasing climate regulatory requirements

such as TCFD, and ongoing labour regulation

and associated risks;

• Our ability to achieve our strategic goals

depends on how we react to external and

internal forces has been introduced and

describes how strategic plans need to be

executed on, including nancial targets for

protability and cash generation to sustain

investor condence; and

• Signicant adverse changes to shale

drilling have been removed from the principal

risk although it continues to be a closely

monitored risk.

The Group’s principal risks are identied on the

pages following. While we have presented these

as separately identied risks, internal and external

events will often affect multiple risks and this is

considered by the Board when assessing the

impact on the Group.

Probability

Financial impact

Low

High

Current status

Prior year status

New risk

1 Increased competition

and market consolidation

2 Geopolitical instability

3 Adverse movement in

commodity prices

4 Climate change and

energy transition

5 Cyber security

6 Loss of key executives

or staff and shortage of

skilled staff

7 Work environment issues

including health and safety

8 Product quality and

reliability

9 Our ability to achieve our

strategic goals depends

on how we react to external

and internal forces

10 Third-party risk, including

joint-venture, distributor

and agent

11 Acquisition risk

12 Increased quantity and

complexity of changing

global rules and

regulations

Post-control status

Pre-control status

Movement in risks (post-control) during the year

Effectiveness of internal controls

Probability

Financial impact

Risk Management continued

HighLow

Low High

1 52

Hunting PLC Annual Report and Accounts 2023 98Strategic Report Corporate Governance Financial Statements Other Information

Risk description

The provision of goods and services to oil and

gas drilling companies is highly competitive.

As the demand for oil and gas services and

products weakened during the COVID period,

competitors reduced prices and margins were

put under pressure. This continues despite

growing demand in the current market.

Competitors may also be customers and/or

suppliers, which can increase the risk of any

potential impact. Competition to secure raw

materials and components for the oil and gas

services industry was strong throughout 2023.

Technological advancements in the oil and gas

industry continue at pace and failure to keep

ahead will result in lost revenue and market

share. Additionally, the oil and gas industry is

undergoing continuing consolidation that could

impact our operations and nancial results.

Competition risk also arises in respect of the

sourcing of supplies such as raw materials

and labour when markets are tight and supply

chains are constrained. Looking further ahead,

advancements in alternative energy sources are

considered a risk to the oil and gas market in the

long term, whilst also presenting an opportunity

in geothermal and carbon capture markets.

Key mitigations

Management has been working to widen

the Group’s sources of raw materials; have

introduced structured training programmes to

internally develop a higher prociency of new

machinists in working on multiple product lines;

and has increased starting salaries for operators.

The Group continually invests in research and

development that enables it to provide

technological advancement and a strong,

ever-widening, product offering. Hunting

continues to maintain its standards of delivering

high-quality products, which has gone some

way in sheltering the pricing pressure impact

on margins.

Key changes during 2023

Hunting’s operations are established close to

their end-markets, which traditionally enables the

Group to offer reduced lead-times and a focused

product range appropriate to each region. With

supply chain issues, including a tight labour

market, Hunting management continues to work

closely with customers to place orders with the

Group earlier than usual and to be more

consenting of longer lead-times in the short term.

In addition, senior management maintains close

dialogue with key customers and seeks to

maintain the highest level of service to preserve

Hunting’s reputation for quality.

The Group has a wide customer base that

includes many of the major oil and gas service

providers and no one customer represents

an overly signicant portion of Group revenue.

In addition, the Group continues to widen its

product offering beyond the oil and gas market,

with a focus on strategic partnerships, as

detailed within the Chief Executive’s Report

on pages 18 to 23.

Increased competition and market consolidation

Risk category

Strategic

Change from last year

Risk owner

Chief Executive, Finance Director, subsidiary

management

Link to strategy

Growth

Operational

Excellence

Risk Management continued

Hunting PLC Annual Report and Accounts 2023 99Strategic Report Corporate Governance Financial Statements Other Information

Risk description

The location of the Group’s markets is determined

by the location of Hunting’s customers’ drill sites

– Hunting’s products must go where the drilling

companies choose to operate. To compete

effectively, Hunting often establishes a local

operation in those regions; however, signicantly

volatile environments are avoided.

The Board has a strategy to develop its global

presence and diversify geographically. Operations

have been established in key geographic regions

around the world, including expansion into India,

recognising the high growth potential these

territories offer. The Group carefully selects

which countries to operate from, considering

the differing economic and geopolitical risks

associated with each geographic territory.

Key mitigations

Areas exposed to high political risk are noted by

the Board and are strategically avoided. Global

sanctions and international disputes are also

closely monitored with compliance procedures

in place to ensure Hunting avoids high risk

countries or partners.

Risk description

Hunting is exposed to the inuence of oil and gas

prices, as the supply and demand for energy is a

key driver of demand for Hunting’s products. The

continued volatility of commodity prices, inclusive

of both oil and gas and raw materials, cause a

number of ongoing risks for the business.

Oil and gas exploration companies may reduce

or curtail operations if prices become, or are

expected to become, uneconomical and,

therefore, continuation of prices above these

levels is critical to the industry and the nancial

viability of the Hunting Group. Adverse

movements in commodity prices may also

heighten the Group’s exposure to the risks

associated with shale drilling. Falling gas prices,

leading to oversupply in oil plays, are also leading

to pricing pressure.

Key mitigations

The Group’s products are used throughout the

life cycle of the wellbore and each phase within

the life cycle generates demand for a different

range of products and services.

The Board and management closely monitor

projected economic trends in order to match

capacity to regional demand. In the medium

term, the Group’s investment in Jindal Hunting

Energy Services Limited, a new joint venture in

India, is expected to reduce reliance on Chinese

mills for export business. The Group’s exposure

to different geographic regions is described on

pages 40 to 54.

Key changes during 2023

Geopolitical issues remain a feature of the

modern world in which Hunting operates. The

scale and nature of these geopolitical issues, and

their impact on the Group, actual and potential,

have increased since Russia’s invasion of Ukraine

and the increased global involvement, real and

rhetorical, in the conict. The conict in Gaza

further adds to volatility in the region and

worldwide. In addition, tensions between the US

and China have also been exacerbated during

this period, both regions of which are important

markets for the Group. Consequently this risk

has remained high over the last twelve months.

The Board and management closely monitor

market reports on current and forecast activity

levels associated with the various phases of the

life cycle of the wellbore to plan for and predict

improvements or declines in activity levels.

The Group is undertaking a measured

diversication into non-oil and gas markets

including geothermal and carbon capture which

helps mitigate this risk. In addition, management

continues to reduce production costs and

develop new technologies, including automation

and robotics that help mitigate the impact of any

further adverse movement in commodity prices

in the future.

Key changes during 2023

Hunting’s exposure to this risk was relatively high

at the start of the year and has remained as such

during the year. The oil price reects the volatility

caused by differences in the supply and demand

and other inuences such as geopolitics.

Geopolitical instability

Risk category

Operational

Change from last year

Risk owner

Chief Executive, Finance Director, subsidiary

management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

ESG and

Sustainability

Adverse movement in commodity prices

Risk category

Strategic

Change from last year

Risk owner

Chief Executive, subsidiary management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

Risk Management continued

Hunting PLC Annual Report and Accounts 2023 100Strategic Report Corporate Governance Financial Statements Other Information

Risk description

Failure to adapt to climate change and energy

transition or to mitigate the Company’s impact on

the environment has the potential to damage the

Company’s reputation and cause issues, including:

• potential destruction of demand for

hydrocarbons if an aggressive carbon

reduction policy is adopted;

• nancial institutions may increase their margins

on borrowings;

• difculty in attracting appropriate executives

and other employees;

• loss of investors and market analysts; and

• restrictions in the type of use for leased assets

imposed by climate-conscious lessors.

In addition, climate change has the potential

to cause the following, beyond the Company’s

inuence:

• increased incidence and severity of ooding,

countryside res and abnormal weather

patterns causing disruption to the Company

directly and/or our customers and suppliers;

• loss of customers or suppliers through their

own failure to comply with climate regulations;

• increased cost and/or incidences of asset

purchases in order to comply with new

technological regulations;

• increased energy costs and liability insurance

premiums; and

• increased taxation on perceived

non-sustainable industries as governments

set about using the tax system to pay for their

net carbon emissions targets.

Key mitigations

The Group takes seriously its commitment to

environmental compliance and stewardship.

We have continued to increase and rene our

climate-related disclosures. In 2023, the

Company announced new GHG emissions

targets, with the Group’s scope 1 and 2

emissions reduction now targeted at 50% below

the 2019 base-year by 2030. The Group is

migrating its electricity supplies to renewable

energy resources and the Company has begun

a process to assure its carbon data with a view

to setting science-based targets in the near

future. In addition, a number of workgroups,

including an Ethics and Sustainability Committee,

are monitoring climate-based matters.

The Group’s environmental, climate and TCFD

disclosures are described in detail on page 38

and pages 62 to 95.

Key changes during 2023

Climate risk commenced as a principal risk in

the 2022 nancial year as a high risk and has

remained high throughout 2023. The Hunting

2030 Strategy outlined key targets for ongoing

energy transition and long-term investment

in geothermal and carbon capture.

Climate change and energy transition

Risk category

Strategic

Change from last year

Risk owner

Chief Executive, Finance Director

Link to strategy

Growth

Operational

Excellence

Strong

Returns

ESG and

Sustainability

Risk Management continued

Hunting PLC Annual Report and Accounts 2023 101Strategic Report Corporate Governance Financial Statements Other Information

Risk description

Our continued dependence on Information

Technology systems for our operations mean we

rely heavily on secure and resilient IT systems.

Components of this risk range from high-impact

cyber security attacks, data leakage and server

outage to the emerging risk of Articial

Intelligence and the condential data storing

practices in unsecure third-party environments.

Through increased disaster recovery procedures,

security awareness training, regular monitoring,

content ltering, and DNS security solutions, risk

mitigation has grown signicantly over the past

several years and most components of the risk

have lowered net risk likelihoods although cyber

attack remains high.

Key mitigations

Risks associated with cyber security range from

loss of control or nancial data, reputational

damage and lost client and supplier trust, and

nancial loss.

Key mitigating actions include regular monitoring,

back-ups and offsite servers (Cloud), and disaster

recovery procedures including security awareness

training, secure mail gateway, content ltering,

and DNS security solutions.

Risk description

The Group is highly reliant on the continued

service of its key executives and senior

management who possess commercial,

engineering, technical and nancial skills that

are critical to the success of the Group. Similarly,

skilled labourers, especially skilled machinists,

are critical to operations and their shortage has

the potential to compromise product quality in

the near term. Rising ination in certain regions

can cause higher resignation rates, therefore

competition for skilled labour remains high globally.

Key mitigations

Remuneration packages are regularly reviewed

to ensure that key executives are remunerated

in-line with market rates including healthcare and

pension arrangements. External consultants are

engaged to provide guidance on best practice.

In response to the heightened risk of losing key

employees and skilled labour, base and

entry-level salaries were raised and a new

pension scheme was set up for certain US

employees in order to provide an incentive to

remain with the Group. A new Directors’

Remuneration Policy is to be introduced, and

closer work with recruitment agents is underway.

Key changes during 2023

Hunting’s exposure to this risk was relatively

high due partly to the external factors impacting

cyber risk.

In 2023, we have rolled out cyber security

training, alongside a phishing campaign launched

in July. Several infrastructure and data centre

initiatives have been launched, and all 2023

objectives were tied directly to improving

business reliability as well as Hunting’s stance

against the never-ending cyber security threats.

With the stronger focus on cyber risk and

ongoing mitigation, cyber risk has been

escalated into our top principal risk list.

Senior management regularly reviews the

availability of the necessary skills within the

Group and seeks to engage suitable staff where

they feel there is vulnerability.

Details of executive Director remuneration are

provided in the Remuneration Committee Report

on pages 131 to 154.

Key changes during 2023

Executives with tangible skills are capable of

migrating to other industries with less exposure

to cyclicality and may consequently move to

where the prospects of career growth may

appear to be brighter; the impact of COVID-19 on

the oil and gas industry highlighted the risk of this

issue. The risk of losing key executives remained

at a high level throughout 2023 as does the

shortage of skilled labour.

Risk Management continued

Cyber security

Risk category

Operational

New Risk

Risk owner

Chief Executive, Finance Director,

Chief IT Ofcer

Link to strategy

Operational

Excellence

Loss of key executives or staff and shortage of key staff

Risk category

Operational

Change from last year

Risk owner

Chief Executive, Finance Director,

Chief HR Ofcer, Remuneration Committee

Link to strategy

Growth

Operational

Excellence

Strong

Returns

ESG and

Sustainability

Hunting PLC Annual Report and Accounts 2023 102Strategic Report Corporate Governance Financial Statements Other Information

Risk description

Due to the broad nature of the Group’s activities,

it is subject to a relatively high number of HSE

risks and the laws and regulations issued by each

of the jurisdictions in which the Group operates.

The Group’s exposure to risk therefore includes

the potential for the occurrence of a reportable

incident, the nancial risk of a breach of HSE

regulations, and the risk of unexpected

compliance expenditure whenever a law or

regulation is renewed or enhanced.

The Group, its customers and its suppliers are

dependent on personal interaction which has

the potential to disrupt, or even close business

operations if personnel become unavailable.

Additionally, inadequately perceived environmental

safety can contribute to reputational risk.

Key mitigations

The Board targets achieving a record of nil

incidents and full compliance with the laws and

regulations in each jurisdiction in which the

Group operates.

Risk description

The Group has an established reputation

for producing high-quality products capable

of withstanding the hostile and corrosive

environments encountered in the wellbore.

A failure of any one of these products could

adversely impact the Group’s reputation

and demand for the Group’s entire range

of products and services.

Risk of developing or innovating products or

differentiating existing products could have an

adverse effect on responding to customers’

needs and could result in a loss of customers,

as well as adversely affecting future success

and protability.

Key mitigations

Quality assurance standards are monitored,

measured and regulated within the Group under

the authority of a Quality Assurance Director who

reports directly to the Chief Executive. Starting

salaries for new recruits have been increased in

order to attract more experienced operators and

businesses in the Group have established

structured training programmes that will improve

the prociency of their machinists and enable

them to work on multiple product lines.

Every Group facility is overseen by a Health and

Safety Ofcer with the responsibility for ensuring

compliance with current and newly issued HSE

standards. Local management is focused on the

training of new employees in Hunting’s stringent

safety procedures.

The Board receives a Group HSE compliance

report at every Board meeting.

The Group’s HSE performance is detailed on

pages 34 and 75.

Key changes during 2023

The Group recorded an HSE total recordable

incident rate of 0.91 in the year, which is

signicantly below the industry average and is a

decrease from the prior year. This particular risk

pertaining to HSE incidents, therefore, continues

to be relatively low, post-controls. Ongoing audits

and Group reporting have highlighted no material

weakness or signicant deciencies.

Where appropriate, a formal programme of

machine maintenance and asset replacement

has been established in order to mitigate the risk

of machine breakdowns affecting product quality.

Key changes during 2023

The risk of product quality or reliability has

remained unchanged during the year, with

no signicant issues raised by the Group’s

customers or during the Board’s internal

monitoring process.

The Group’s commitment to product quality

is detailed on pages 29 and 79.

Risk Management continued

Work environment issues including health and safety

Risk category

Operational

Change from last year

Risk owner

Chief Executive, subsidiary management

Link to strategy

Operational

Excellence

ESG and

Sustainability

Product quality and reliability

Risk category

Operational

Change from last year

Risk owner

Chief Executive, subsidiary management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

Hunting PLC Annual Report and Accounts 2023 103Strategic Report Corporate Governance Financial Statements Other Information

Risk description

Hunting’s ability to achieve its strategic goals

depends on how we react to external and internal

forces. This presents itself both as a risk as well

as an opportunity. Hunting has set out a clear

strategy with long-term growth objectives to

investors during its Capital Markets Day and

those plans need to be executed on, including

the delivery of nancial targets for protability

and cash generation.

Internal and external risks could cause Hunting to

miss nancial targets previously communicated

to shareholders. This could impact investor

condence and, therefore, impact the Hunting

share price. Additionally, Hunting has a range of

external stakeholders and shareholders, whose

interests, and denitions of success are different.

There is a risk that our denition of success is not

aligned to the changing external perspective.

Risk description

Third-party risk has been evolving due to Group’s

focus on global partnerships and joint ventures.

Partnerships can expose Hunting to regulatory

non-compliance as a result of reduced oversight

of relevant internal controls. Furthermore, failure

to nd an appropriate joint venture partner or

a failure by a joint venture partner to perform to

the standards required by the joint venture

agreement could result in negative nancial

and reputational impact to the Hunting Group.

Key mitigations

Apart from regular monitoring practices, a

new Supply Chain Code of Conduct was

implemented, and bi-annual reports are

now required from each third party in EMEA

and Singapore. The Board, Chief Executive

and Finance Director additionally hold

post-investment appraisals.

Key mitigations

Hunting’s rst Capital Markets Day hosted in

2023 enabled the sharing of strategy and

long-term goals to inform the market. Increased

focus on continuously developing investor and

analyst relations further inuenced the ongoing

collection of market intelligence to enable

Hunting to address any change in shareholder

expectations more quickly.

Key changes during 2023

Facing competition in all aspects of our business

means that failing to manage our costs and

operational performance could result in

inadequate earnings, cash ows and other

nancial performance metrics. This in turn can

affect Hunting being perceived as an attractive

proposition for shareholders and lenders. A

stronger focus on monitoring both internal and

external environments and stakeholder

expectations has been a priority for 2023,

therefore escalating the risk.

Key changes during 2023

Ongoing relationship building with joint-venture

partners has been a focus to ensure compliance

and the application of our Global principles

wherever we work. This year, the Hunting Group

has updated the Supply Chain Code of Conduct,

which has been sent to all our suppliers and

customers. Continuous monitoring of practices

keep this risk high, yet stable.

Risk Management continued

Our ability to achieve our strategic goals depends

on how we react to external and internal forces

Risk category

Strategic

New Risk

Risk owner

Chief Executive, Finance Director

Link to strategy

Growth

Operational

Excellence

Strong

Returns

10.

Third-party risk, including joint-venture, distributor, and agent

Risk Category

Operational

New Risk

Risk Owner

Chief Executive, subsidiary management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

Hunting PLC Annual Report and Accounts 2023 104Strategic Report Corporate Governance Financial Statements Other Information

Risk description

Due to the nature of our business, and especially

a focus on alternative revenue streams such as

geothermal or carbon capture, acquisitions are

an integral part of Hunting 2030 Strategy. This

puts us in a position of managing the inherent

risks of identifying and integrating businesses

that we have or may acquire. Furthermore,

acquisitions and investments may not result in

anticipated benets and may present risks not

originally considered, which could have a material

adverse effect on our nancial condition, results

of operations and cash ows.

Key mitigations

With a clear long-term strategy mapped out at

the Group’s Capital Market’s Day, increased

monitoring of Hunting’s businesses has been

in place, with increased reporting to the Board.

Further mitigation includes undertaking additional

due diligence, and dening investment criteria for

investment appraisals. Ongoing post-investment

appraisals and additional Board, Chief Executive

and Financial Director appraisals are in place.

Risk description

Hunting operates globally in complex regulatory

environments, and there is an ongoing risk that

we are not compliant with global rules and

regulations. Further increasing risks range

from increased tax regulations, labour regulatory

risks and their long-term impacts, and increased

climate regulatory requirements and changing

international rules and regulations such as

TCFD. The development of climate change

regulations also differs globally, inuencing varied

shareholder expectations, especially between

the US and the UK.

Key mitigations

Ongoing monitoring and increased resource

allocation for internal monitoring has helped

in efforts to continuously track any evolving

regulatory requirements.

Key changes during 2023

Acquisition risk is a new entrant to the Group’s

annual risks, although its risk rating has remained

unchanged from its previous rating during the year,

with no signicant issues raised by the Group.

Key changes during 2023

The risk of increased rules and regulations

is a new addition to the principal risk list due

to changing priorities of the UK regulatory

environment, as well as ongoing evaluation of

climate-related requirements. It is a risk that is

continually monitored with no signicant issues

being raised by the Group.

Risk Management continued

11.

Acquisition risk

Risk category

Strategic

New Risk

Risk owner

Chief Executive, Finance Director, subsidiary

management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

12.

Increased quantity and complexity of changing global rules

and regulations

Risk category

Legal and Compliance

New Risk

Risk owner

Chief Executive, Finance Director, subsidiary

management

Link to strategy

Growth

Operational

Excellence

Strong

Returns

ESG and

Sustainability

Hunting PLC Annual Report and Accounts 2023 105Strategic Report Corporate Governance Financial Statements Other Information

Viability Statement

These assessments are supported by the risk

management processes described on pages

96 and 97 and include a review of the Group’s

exposure to the oil and gas industry, competitor

action, customer plans, geopolitics and the

robustness of the supply chain.

Assessment period

The Group’s customers are principally involved in

the exploration for and production of oil and gas.

Given the nature of the industry and the planning

cycles involved, these activities can cover periods

of no more than several weeks up to several

years from start to end.

Hunting’s management works closely with its

customers, discussing their operational plans

and related capital expenditure programmes,

with a natural focus on the earlier years in which

projects will be in progress, or committed, and

for which requirements for goods or services

from Hunting will be more certain. The outlook for

the Group beyond this period is generated from

management’s assessment of industrial data and

projections published by industry commentators

and analysts, including statistics on exploration

and production expenditure, footage drilled and

rig activity. These macro, longer-term forecasts

are subject to signicant volatility.

The Board regularly reviews the principal risks

and assesses the appropriate mitigation and

further actions required as described on page 96

and pages 98 to 105. The Board has further

considered their potential impact within the

context of the Group’s viability assessment.

In assessing the viability of the Group, the Board

consider internal nancial projections to the end

of 2027 which made the following assumptions:

• global exploration and production spend,

excluding Russia, China and Central Asia, is

expected to rise by 48% from 2023 to 2027;

• demand for energy service products improves

in the medium term, given the global outlook

for oil and gas demand, which is driven by

growth within emerging markets and sustained

demand from developed markets. These are

the fundamental drivers of Hunting’s core

business of manufacturing, supplying and

distributing products and services which

enable the extraction of oil and gas;

• the Group continues to widen its customer

base beyond the oil and gas industry, including

into non-oil and gas energy, aerospace,

military and medical markets;

• the Group’s cost base is expected to benet

from improved efciency resulting from

reductions in xed costs, simplied

management structures and back ofce

services, which together with the improved

operating leverage, is expected to drive

EBITDA margins up; and

• the Group will continue to have a low to

medium exposure to higher risk countries

given the proportion of its current revenues

and prots derived from politically stable

regions such as North America, Europe and

South East Asia.

A downside case of the nancial projections was

also produced to model a severe but plausible

Due to the uncertainty in projecting forward any

meaningful outlook beyond three years, the

Group’s bank funding facilities are generally

limited to a similar period. This enables the Group

to reduce the risk of either being underfunded or

overfunded, thereby mitigating non-utilisation

fees, beyond the foreseeable future by being able

to negotiate new facilities to accommodate

revised operational and strategic changes

expected during that additional period. The Asset

Based Lending facility (“ABL”) is a four-year bank

borrowing facility that commenced in February

2022. Financial projections beyond this period

are too uncertain for the Group to commit to a

longer facility. The Group’s Treasury department

generally aims to initiate negotiations for a facility

renewal approximately twelve months before the

maturity date and the most recent outlook would

contribute to those discussions.

Taking these factors into consideration, the

Board believes that a three-year forward-looking

period, commencing on the date the nancial

statements are approved, is the appropriate length

of time to reasonably assess the Group’s viability.

Assessment

The nature of the Group’s operations exposes

the business to a variety of risks, which are noted

on pages 98 to 105.

deterioration in market conditions relevant to

the Group’s principal risks. The downside case

models a reduction in revenue of between 10-15%

per year in 2026 and 2027 and the resulting

impact on EBITDA and total cash and bank

assuming a modest reduction in discretionary

corporate cash outows such as dividends and

treasury share purchases. If conditions were

worse than anticipated in the downside case,

corporate cash outows, capital expenditure and

operating costs would be reassessed resulting

in additional nancial exibility. In the downside

scenario, the Group continued to generate

cash and had signicant headroom under its

committed facilities and nancial covenants.

Liquidity and solvency

The $150m ABL facility is a four-year bank

borrowing facility and includes an option that

allows Hunting to increase the facility by a further

$50m subject to the lenders’ credit approval. The

ABL facility was partially utilised during 2023 in

order to fund working capital. At 31 December

2023, the Group’s total cash and bank position

was broadly zero (NGM K). The Group’s internal

nancial projections indicate that the Group is

expected to deliver a cash positive position by

the end of 2024.

Conclusion

The Board believes that the Group’s strategy for

growth, its positive approach towards mitigating its

impact on climate change, the diverse customer,

supplier and product base, the resilience of its

business model against the principal risks, the

availability of borrowing facilities and the positive

outlook for the oil and gas industry, in the medium

term provide Hunting with a strong platform on

which to continue its business. The Directors

therefore have a reasonable expectation that

Hunting will be able to continue in operation

and meet its liabilities as they fall due over the

three-year period of their assessment.

Introduction

Hunting has a diverse global customer base underpinned by strong,

long-term relationships. The Group provides a large range of products

and services through its manufacturing and distribution facilities, which

are located in a number of countries across the globe. In considering

the Group’s viability, the Board regularly assesses the risks to its

business model, strategy, future performance, solvency and liquidity.

Hunting PLC Annual Report and Accounts 2023 106Strategic Report Corporate Governance Financial Statements Other Information

Going Concern

Cash inows are further supported by the Group’s

credit insurance cover against customer default

that, at 31 December 2023, covered the majority

of its trade receivables, subject to certain limits.

Current and forecast cash/debt balances are

reported on a weekly basis by each of the

business units to a centralised treasury function

that uses the information to manage the Group’s

day-to-day liquidity and longer-term funding needs.

The Group has access to sufcient nancial

resources, including a $150m secured

committed Asset Based Lending facility (“ABL”).

Throughout 2023, the facility was partially utilised

in order to fund working capital. At 31 December

2023, the Group had total cash and bank of

broadly zero (NGM K). The Group’s internal

nancial projections indicate that the Group is

expected to return to a cash-positive position by

the end of 2024 and consequently has sufcient

resources to meet its liabilities as they fall due

over the next twelve months following the date

of approval of the nancial statements.

Review

In conducting its review of the Group’s ability to

remain as a going concern, the Board assessed

the Group’s recent trading performance and its

latest forecasts and took account of reasonably

predictable changes in future trading

performance as well as the availability of

borrowing facilities. The Board also considered

the principal risks faced by the Group and the

potential nancial impact of the estimates,

judgements and assumptions that were used to

prepare these nancial statements. Management

also sensitised the forecasts to reect plausible

downside scenarios and these demonstrated

that the Group is able to maintain sufcient cash

resources to meet its liabilities as they fall due

over the twelve months following the date of

approval of the nancial statements. The Board is

also satised that no material uncertainties have

been identied.

Conclusion

The Board is satised that it has conducted a

robust review of the Group’s going concern and

has a high level of condence that the Group has

the necessary liquid resources to meet its

liabilities as they fall due. Consequently, the

Board has considered it appropriate to adopt the

going concern basis of accounting in preparing

the nancial statements.

Introduction

The Group’s principal cash outows include capital investment, labour

costs, inventory purchases and dividends. The Group’s principal cash

inows are generated from the sale of its products and services, the

level of which is dependent on overall market conditions, the variety

of its products and its ability to retain strong customer relationships.

Hunting PLC Annual Report and Accounts 2023 107Strategic Report Corporate Governance Financial Statements Other Information

Section 172(1) Statement

The Board engages with its stakeholders when

considering major strategic decisions, in the

following ways:

• Each year the Board reviews its short- and

long-term strategy. In recent years these

have remained consistent, with a focus on

maintaining a rm nancial foundation,

improving facilities and investing in the

development of new technology and in

our workforce;

• The Board aims to ensure that our

employees work in a safe environment, that

they receive appropriate training and are

rewarded for their efforts;

• Over the years, we have fostered longstanding

relationships with our customers, suppliers and

our external advisers. We base our philosophy

on sharing our core values with our key

stakeholders throughout the supply chain and

by keeping in regular contact with suppliers

and customers, advising them of our market

strategy and product innovation;

• As a Company operating in the oil and gas

industry, we regularly monitor the impact of

our activities on the environment and on the

communities in which we operate, in particular

where we maintain active manufacturing

facilities; and

• The Group also completed its rst carbon

data assurance project, using S&P Global;

• The Group commenced the analysis of its

scope 3 emissions, beginning with the Hunting

Titan operating segment, which will enable the

Company to estimate its scope 1, 2 and 3

greenhouse gas emissions;

• Hunting’s TEK-HUB™ continues to build

relationships with innovative individuals and

organisations that are developing technologies

that align with our customers’ and wider

stakeholders’ requirements;

• The Company held a Capital Markets Day

during which senior management presented

the Hunting 2030 Strategy, outlining the

Company’s ambitions to expand in traditional

energy, energy transition markets as well as

non-oil and gas markets such as aviation,

commercial space, defence, medical and

power generation;

• Teams from Singapore, China and Indonesia

organised various events to celebrate

International Women’s Day, which included

team building exercises, speakers and

activities. The workshops addressed several

topics including diversity and equality in regard

to the workplace;

• In February 2023, the Society of Petroleum

Engineers hosted a roundtable discussion led

by Hunting staff, with the event providing the

perfect opportunity to showcase how the

Company is supporting global energy

transition projects; and

• The Board continues to monitor senior

management engagement with customers,

suppliers and other stakeholders.

• As a Board, we endeavour to operate

responsibly and to make carefully considered

decisions. We encourage high standards of

business conduct from our employees and

ensure we lead by example.

Following engagement with a wide range of

stakeholders, the following actions were taken:

• Our global Human Resources function

continues to monitor workforce remuneration,

hiring and retention policies to ensure our

employees are paid fairly when compared to

similar companies in our sector;

• Our second global employee engagement

survey was launched during the year leading to

additional training programmes being set up;

• Updated Code of Conduct training

programmes were rolled out to all Group

employees in 2023 as well as cyber security

training;

• A Supplier Code of Conduct was rolled out

during the year;

• Charitable donations were made in-line with

the new policy to distribute unclaimed

dividends to UK-based charities;

• The Group has continued to expand its carbon

data and climate reporting. During the year, the

Company announced its targets to reduce

carbon emissions, based on its scope 1 and 2

carbon footprint;

The following sections and cross references

provide a summary of where details of key

stakeholder and associated engagement and

decision making is located within the 2023

Annual Report and Accounts, and also some of

the considerations taken by the Board in fullling

their duty under section 172(1) of the Act:

• shareholders (pages 31 and 32);

• lenders (pages 31 and 32);

• employees (pages 31 and 33 to 35);

• customers (pages 31, 36 and 37);

• suppliers (pages 31 and 37);

• environment and climate change

(pages 31 and 38);

• governments (pages 31 and 39); and

• communities (pages 31 and 39).

On behalf of the Board

Jim Johnson

Chief Executive

Bruce Ferguson

Finance Director

29 February 2024

This statement has been prepared in compliance with the

Companies (Miscellaneous Reporting) Regulations 2018.

The Board of Hunting PLC considers that, in complying with its

statutory duty during 2023 and under section 172 of the Companies

Act 2006 (the “Act”), the Directors have acted in good faith and in a

manner which they believe will promote the continued success of the

Company, for the benet of its members and stakeholders as a whole.

Hunting PLC Annual Report and Accounts 2023 108Strategic Report Corporate Governance Financial Statements Other Information

CORPORATE

GOVERNANCE

Introduction to Corporate Governance 110

Board of Directors and Company Secretary 112

Executive Committee 114

Corporate Governance Report 115

Nomination Committee Report 126

Ethics and Sustainability Committee Report 128

Remuneration Committee Report 131

– Remuneration at a Glance 135

– Directors’ Remuneration Policy 137

– Annual Report on Remuneration 146

Audit Committee Report 155

Directors’ Report 160

Hunting PLC Annual Report and Accounts 2023 109Strategic Report Corporate Governance Financial Statements Other Information

Introduction to Corporate Governance

Around this sector narrative, the Directors of the

Company continued to implement improvements

to the strategic and governance frameworks to

position Hunting for long-term success. A new

strategy was announced and, in parallel to this,

the work of the Nomination and Remuneration

Committees, in particular, reect the alignment

of succession and compensation with

these ambitions.

I am due to retire from the Board in April 2024,

following completion of nine years’ service to

shareholders, but I leave the Company in excellent

shape, positioned well for continued growth,

supported by strong and experienced Directors.

Hunting 2030 Strategy

In March 2023, the Company announced the

Hunting 2030 Strategy, which presented the

growth ambitions of management to the end

of the decade.

Details of this strategy were delivered at the

Company’s rst Capital Markets Day on

13 September 2023, where Hunting’s senior

leadership team presented the strategic plans,

growth ambitions and nancial targets for the

medium-term.

Hunting has a compelling technology and

product offering, which covers many critical

areas of the global energy industry. The

Company is also making good progress in

developing energy transition revenue

opportunities, particularly in the tangential

markets of geothermal energy and carbon

capture and storage. Further, Hunting is driving

growth through diversication outside of energy

markets, which require quality-assured products,

supported by high-end manufacturing

capabilities. These ambitions will deliver growth

in the nancial performance of the Company,

given the market fundamentals being reported

for energy, but also other industries that need

our skills. I would like to commend Jim Johnson,

our Chief Executive, for the evolution and delivery

of this new strategic plan.

Board succession and refreshing

On 3 January 2023, Stuart Brightman was

appointed as a new, independent, non-executive

Director of the Company. Stuart brings a wealth

of manufacturing, energy services and quoted

company experience to the Hunting Board.

In-line with the Company’s Articles of

Association, Stuart automatically retired as a

Director and was reappointed by shareholders

at the 2023 Annual General Meeting (“AGM”).

2023 saw a strong increase in the activity and protability of the

Company as global energy markets continued their growth, driven by

energy security concerns and wider economic progress. The delivery

of affordable energy supplies is also a key driver for the new activity

seen in the year, with offshore markets being particularly strong. The

Board of Hunting believes that energy markets will remain resilient for

many years to come, with the Company’s strategic ambitions also

aligned with new, non-oil and gas opportunities.

As noted below, the Board are submitting to

shareholders, for approval at the 2024 AGM,

a new Directors’ Remuneration Policy and

Long-Term Incentive Plan. To ensure continuity

through this process of engagement with

shareholders, on 5 December 2023 the Board

agreed to reappoint Annell Bay, the Chair of the

Remuneration Committee, for up to a further 12

months, with effect from 2 February 2024. Major

shareholders were consulted on this decision

during January 2024, as part of the Board’s

ongoing governance dialogue.

During H2 2023, the Nomination Committee

undertook a search process to appoint an

additional, independent, non-executive Director.

Following a detailed search and interview

process, Dr Margaret Amos was appointed as

a Director on 10 January 2024, joining all of the

Committees of the Board. Margaret brings new

sector expertise to the Board, as Hunting seeks

to pursue non-oil and gas revenue streams,

in-line with the Hunting 2030 Strategy.

2024 will be a year of change for the prole of the

Hunting Board as the process of succession and

rotation continues. On 17 April 2024, I will step

down as Company Chair at the conclusion of

the AGM. Following a rigorous process, the

Nomination Committee, led by Annell Bay,

proposed Stuart Brightman to succeed me as

Company Chair to lead Hunting through its next

phase of development, as the Hunting 2030

Strategy is executed by executive management.

I wish Stuart all the best in his new role.

As detailed in our announcement on 10 January

2024, following Stuart’s appointment as Company

Chair, Margaret Amos will take over as Chair of

the Ethics and Sustainability Committee.

John (Jay) F. Glick

Company Chair

Hunting PLC Annual Report and Accounts 2023 110Strategic Report Corporate Governance Financial Statements Other Information

Introduction to Corporate Governance continued

With these changes, the Hunting Board is well

positioned to pursue a broad range of growth

opportunities as the energy industry continues

its growth path.

New Directors’ Remuneration Policy

Hunting’s Remuneration Committee continued its

excellent work throughout 2023, and, in the year,

commenced a review process to ensure the

Company’s compensation practices aligned with

the long-term strategic ambitions of the Board,

as well as ensuring that Hunting’s remuneration

framework remains competitive in its key

recruitment markets of the US and the UK.

As described in more detail in the Remuneration

Committee report see pages 131 to 154, a

detailed and balanced benchmarking process

was completed, which compared the

remuneration structure of Hunting’s Chief

Executive to its most relevant and appropriate

peers who carry the same prole and size to

our Company. This process resulted in a new

Director’s Remuneration Policy, which includes

a proposed hybrid long-term incentive structure,

with Hunting’s executive Directors being granted

a mix of performance-based and restricted stock

awards. The Remuneration Committee and wider

Board believe this structure to be critical to the

long-term recruitment and succession planning

needs of the Company, given the location of the

majority of Hunting’s most senior executives.

During H2 2023, a thorough shareholder

engagement process was undertaken, led by

Annell Bay, and following some amendments to

our proposals after receiving feedback from our

shareholders, the 2024 Directors’ Remuneration

Policy and new Long-Term Incentive Plan are

being submitted for approval at the 2024 AGM.

The Directors believe the new Policy to be key to

the long-term success of the Company and seek

shareholder support for these proposals.

Dividends

With the continued improvement in the Company’s

nancial performance in the year, and in-line with

the dividend ambition announced as part of the

Hunting 2030 Strategy, the Directors are

proposing a Final Dividend, with respect to 2023

of 5.0 cents per share. This distribution is being

submitted to shareholders for approval at the

2024 AGM.

An Interim Dividend of 5.0 cents per share was

paid on 27 October 2023, equating to a cash

distribution of $7.9 million.

The total distribution for the year to shareholders

is, therefore 10.0 cents per share, or a 11%

increase over 2022, which equates to total

distributions payable of approximately $15.8m

(2022 – $14.3m).

ESG and sustainability

As a responsible Company, our efforts to

increase our ESG and Sustainability

commitments have continued in the year, with

Hunting announcing new 2030 carbon emission

reduction targets in March 2023. A new initiative

introduced in the year was an independent

assurance process covering our scope 1 and 2

emissions, which was completed in July 2023.

S&P Global was appointed to oversee this

process, which was successfully concluded

with no amendments to our published 2022

emissions data.

As noted elsewhere in this report, the Company

has commenced a process to determine its

scope 3 carbon emissions data. This is an

important milestone for Hunting as it will enable

management to develop a Net Zero carbon

reduction plan, which is an area of increased

focus for investors.

During 2023, the Company completed a second

employee engagement survey, with the results

being reviewed by the Ethics and Sustainability

Committee at its June 2023 meeting. The

Directors noted the improved scoring recorded

in this process, which underlines their belief that

Hunting retains a strong culture across all of its

global operations.

New UK Corporate Governance Code

The Board is keeping under close review the

proposals by the UK government to reform audit

and governance procedures. The Directors of

Hunting remain committed to close alignment

with the UK Corporate Governance Code, and

will implement new practices as and when

required to remain compliant with the Code.

In summary, the governance framework, along

with the Board and Committee processes and

procedures, have remained robust during 2023

with progress being made on many fronts. As I

retire from the Company, I believe that Hunting is

poised for a period of resilient performance in the

short- to medium-term.

On behalf of the Board

John (Jay) F. Glick

Company Chair

29 February 2024

Hunting’s governance

framework, along with the

Board and Committee

processes and procedures

have remained robust during

2023 with progress being

made on many fronts.

Dividends declared in the year

10.0 cents

(2022 – 9.0 cents)

Total distributions payable to

shareholders in respect of the

nancial year

$15.8m

(2022 – $14.3m)

Hunting PLC Annual Report and Accounts 2023 111Strategic Report Corporate Governance Financial Statements Other Information

Board of Directors and

Company Secretary

Key to committees:

Nomination Committee

Ethics and Sustainability Committee

Remuneration Committee

Audit Committee

By invitation

Chair

N RE I I I N NE ER A A

John (Jay) F. Glick

Non-executive Company Chair

Nationality

American

Length of service

9 years; appointed to the Board

as a non-executive Director in

2015 and is viewed as independent.

In 2017, Jay was appointed

non-executive Company Chair

and in September 2023, was

reappointed for a nal 8 months.

Jay currently Chairs the Nomination

and Ethics and Sustainability

Committees. Jay will retire from the

Board at the conclusion of the 2024

AGM. Age 71.

Skills and experience

Jay was formerly the president

and chief executive ofcer of

Lufkin Industries Inc and, prior

to that, held several senior

management roles with Cameron

International Corporation.

External appointments

Jay is currently a non-executive

director and chairman of TETRA

Technologies Inc.

Arthur James (Jim) Johnson

Chief Executive

Nationality

American

Length of service

32 years; appointed to the Board

as a Director and Chief Executive

in 2017. Age 63.

Skills and experience

Jim held senior management

positions within Hunting from 1992

up to his appointment as Chief

Operating Ofcer of the Group

in 2011. In this role, he was

responsible for all day-to-day

operational activities of the

Company. Jim is a member of and

chairs the Executive Committee.

External appointments

None.

Bruce Ferguson

Finance Director

Nationality

British

Length of service

30 years; appointed to the Board

as a Director and Finance Director

in 2020. Age 52.

Skills and experience

Bruce is a Chartered Management

Accountant and has held senior

nancial and operational positions

within the Group since 1994.

From 2003 to 2011, Bruce was the

nancial controller of the Group’s

European operations. From 2011,

Bruce held the position of managing

director of Hunting’s EMEA operating

segment and has been a member

of the Executive Committee since

its formation in 2018.

External appointments

None.

Margaret Amos

Non-executive Director

Nationality

British

Length of service

Less than 1 year; appointed to the

Board as a non-executive Director

in January 2024 and is viewed as

independent. Following Jay Glick’s

retirement in April 2024, Margaret

will Chair the Ethics and

Sustainability Committee. Age 54.

Skills and experience

Margaret spent the majority of her

career at Rolls-Royce plc, where

she held a number of senior

positions including Finance Director

– Engineering, IT and Corporate as

well as Director of Business Planning.

External appointments

Margaret is currently a non-executive

director of Tyman plc, Volution

Group plc and Pod Point Group

Holdings PLC.

Annell Bay

Non-executive Director

Nationality

American

Length of service

9 years; appointed to the Board

as a non-executive Director in 2015

and is viewed as independent.

In February 2024, Annell was

reappointed for a further 12 months

to oversee the implementation

of the new Directors’ Remuneration

Policy, which will be submitted

to shareholders at the 2024 AGM.

Annell is Chair of the Remuneration

Committee and is also the

Company’s designated non-executive

Director for employee engagement.

Age 68.

Skills and experience

Annell was formerly a vice president

of global exploration at Marathon

Oil Corporation and, prior to that,

vice-president of Americas

Exploration at Shell Exploration

and Production Company.

External appointments

Annell is currently a non-executive

director of Apache Corporation.

Hunting PLC Annual Report and Accounts 2023 112Strategic Report Corporate Governance Financial Statements Other Information

Board of Directors and

Company Secretary continued

Key to committees:

Nomination Committee

Ethics and Sustainability Committee

Remuneration Committee

Audit Committee

By invitation

Chair

AN N N N NE E E E ER R R R RA A A A

Stuart M. Brightman

Non-executive Director

Nationality

American

Length of service

1 year; appointed to the Board as a

non-executive Director in 2023 and

is viewed as independent. Age 67.

In January 2024 it was announced

that following the conclusion of the

2024 AGM Stuart would succeed

Jay Glick as Company Chair.

Skills and experience

Stuart has spent the majority of his

career at TETRA Technologies Inc.

(“TETRA”), Dresser Inc. and

Cameron Iron Works. During his

time at TETRA, Stuart held the

position of chief operating ofcer

between 2005 and 2009, when

he was appointed chief executive

ofcer, a position he held to

2019, before his retirement from

the business.

External appointments

None.

Carol Chesney

Non-executive Director

Nationality

American and British

Length of service

6 years; appointed to the Board

as a non-executive Director in 2018

and is viewed as independent.

Carol is Chair of the Audit

Committee, and in April 2021 was

reappointed for a further three-year

term. Age 61.

Skills and experience

Carol is a Fellow of the Institute of

Chartered Accountants in England

and Wales. Carol was formerly the

Group Financial Controller and,

latterly Company Secretary of

Halma plc.

External appointments

Carol is currently a non-executive

director of IQE plc and Hill & Smith plc.

Paula Harris

Non-executive Director

Nationality

American

Length of service

2 years; appointed to the Board as

a non-executive Director in April

2022 and is viewed as independent.

Age 60.

Skills and experience

Paula has extensive oileld services

experience following a 33-year

career at Schlumberger, the

international energy services group,

where latterly she was Director of

Stewardship.

External appointments

Paula is currently a non-executive

director of Chart Industries, Inc and

Helix Energy Solutions Group, Inc.

Keith Lough

Senior Independent

Non-executive Director

Nationality

British

Length of service

6 years; appointed to the Board

as a non-executive Director in

April 2018 and appointed Senior

Independent Director in August

2018. In April 2021, Keith was

reappointed for a further three-year

term. Age 65.

Skills and experience

Keith was formerly the

non-executive Chairman of Gulf

Keystone Petroleum Limited and

Rockhopper Exploration plc as well

as a non-executive director of

Capricorn Energy plc. He has

previously held a number of

executive positions within other

energy-related companies, including

British Energy plc and LASMO plc.

External appointments

Keith is currently the non-executive

chair of Southern Water.

Ben Willey

Company Secretary

Nationality

British

Length of service

14 years; joined Hunting in 2010 and

was appointed Company Secretary

in 2013. Age 50.

Skills and experience

Ben is a Fellow of the Institute

of Chartered Secretaries and

Administrators. He was formerly

a partner at Buchanan, a WPP

company, and, prior to that,

worked in investment banking.

External appointments

None.

Hunting PLC Annual Report and Accounts 2023 113Strategic Report Corporate Governance Financial Statements Other Information

Executive Committee

Jason Mai

Managing Director

– Hunting Titan

Nationality

American

Length of service

8 years; joined Hunting in 2016.

Age 55.

Ryan Elliott

Chief IT Ofcer

Nationality

American

Length of service

11 years; joined Hunting in 2013.

Age 46.

Daniel Tan

Managing Director

– Asia Pacic

Nationality

Singaporean

Length of service

16 years; joined Hunting in 2008.

Age 61.

Randy Walliser

Managing Director

– Canada

Nationality

Canadian

Length of service

5 years; joined Hunting in 2019.

Age 63.

Scott George

Managing Director

– North America

Nationality

American

Length of service

14 years; joined Hunting in 2010.

Age 50.

Gregory T. Farmer

Global Director

– QAHSE/Compliance

Nationality

American

Length of service

36 years; joined Hunting in 1993.

Ag e 57.

Liese Borden

Chief HR Ofcer

Nationality

American

Length of service

6 years; joined Hunting in 2018.

Age 62.

Stewart Barrie

Managing Director

– EMEA

Nationality

British

Length of service

12 years; joined Hunting in 2012.

Age 55.

Dane Tipton

Managing Director

– Subsea Technologies

Nationality

American

Length of service

14 years; joined Hunting in 2010.

Age 52.

Jim Johnson, Bruce Ferguson

and Ben Willey are also

members of the Hunting

Executive Committee.

Hunting PLC Annual Report and Accounts 2023 114Strategic Report Corporate Governance Financial Statements Other Information

Our purpose

Stakeholder engagement

Non-executive

Directors

Executive

Directors

Strategic intent

Challenge and

decision making

Short/long-term plans

Remuneration

Committee

Execution and

value creation

(Business Model)

Risk

management

Strategic and

ﬁnancial

performance

Business

strategy

Audit

Committee

Nomination Committee

Ethics and

Sustainability

Committee

Market environment and

other external factors

KPIs

Corporate Governance Report

Compliance

The Board of Hunting PLC has adopted

governance principles aligned with the 2018 UK

Corporate Governance Code (“the Code”), which

can be found at www.frc.org.uk. Hunting PLC is

reporting its corporate governance compliance

against this Code. The Board notes that it has

complied with all provisions within the Code

except for the following from which there has

been a departure as at 29 February 2024:

The pension contribution rate of the Chief

Executive (who is resident in the US) currently

does not align with the workforce as required

by provision 38 of the Code. Mr Johnson was

appointed prior to the implementation of the

2018 Code. It should be noted that since his

appointment to the Board in 2017, the pension

contribution Jim Johnson received from the

Company averaged 12% of base salary. Under

the current Directors’ Remuneration Policy, the

Board agreed that the pension contribution rates

for all new executive Director appointments will

be capped at 12% of base salary, in-line with the

UK workforce. In 2023, a new deferred savings

plan was implemented in the US, which fully

aligns the workforce and management across

the region. The Remuneration Committee notes

that this plan will be offered to future US-based

executive Directors, which will make the

Company fully compliant with the Code.

Governance framework

Introduction

Subject to the Company’s Articles of Association,

UK legislation and any directions prescribed by

resolution at a general meeting, the business of

the Company is managed by the Hunting PLC

Board (“the Board”).

The Board is responsible for the management

and strategic direction of the Company, to ensure

long-term success by generating value for its

shareholders, while giving due consideration to

other stakeholders, as prescribed by UK law.

The Board discusses strategic planning and

long-term growth objectives. Once the Board has

agreed on these strategic plans, they are rolled

out across the Group’s operations and relayed to

key stakeholders more generally.

Embedded within strategic planning is the

Group’s appetite for risk. The Group’s Risk

Management framework (see pages 96 and 97),

and supporting procedures, help the Board

rene its decision making, as the opportunities

and risks for long-term success and growth are

evaluated against the risk appetite and culture of

the Group. Following this, the Group’s Business

Strategy and Model are put into action.

The Board has four subcommittees to which

it delegates governance and compliance

procedures:

• the Nomination Committee, whose report

can be found on pages 126 and 127;

• the Ethics and Sustainability Committee,

whose report can be found on pages 128

to 130;

• the Remuneration Committee, whose report

can be found on pages 131 to 154; and

• the Audit Committee, whose report can be

found on pages 155 to 159.

These Board Committees support the Directors

in their decision making.

Hunting governance framework

Hunting PLC Annual Report and Accounts 2023 115Strategic Report Corporate Governance Financial Statements Other Information

The work of the Nomination Committee supports

the Board’s responsibility for ensuring that a

framework for the recruitment and retention of

talent is in place to run the Company and that

succession is well planned and executed in a

timely manner.

The Ethics and Sustainability Committee

supports the Group’s environmental, social

and governance (“ESG”) decision making.

The Committee also monitors the long-term

strategies to reduce our impact on the

environment, improve our sustainability,

monitor stakeholder engagement procedures

and oversees our ethics policies.

The Remuneration Committee ensures that

executive pay remains aligned with Company

performance, workforce remuneration and the

broader shareholder experience. The

Remuneration Committee ensures the executive

Directors remain motivated and incentivised, as

the senior leadership team executes the Board

approved strategy on a day-to-day basis.

The Audit Committee’s responsibilities include

reviewing the Group’s nancial results and,

challenging management and overseeing the

internal audit and external audit functions.

The Board and its Committees are further

supported by an Executive Committee,

comprising senior leaders across the Group.

The Executive Committee oversees the

implementation of the Group’s strategy

and growth objectives and ensures that the

risks and also opportunities presented are

actively managed.

Board leadership and

Company purpose

(Section 1 of the Code)

Responsibilities of the Board

The Board of Hunting PLC has clearly dened

areas of responsibility, which are separate to

those of the Company Chair, executive Directors

and the Committees of the Board. The non-

executive Directors approve the strategic goals

and objectives of the Company, as proposed by

the executive Directors. The Board approves all

major acquisitions, divestments, dividends, capital

investments, annual budgets and strategic plans.

The Board exercises overall leadership of the

Company, setting the values of the Hunting

Group and providing a strong tone from the top,

which all businesses within the Group, and their

employees, are encouraged to adopt.

Governance principles of the Company are set

by the Board and key Group-level policies are

reviewed and approved by the Directors. The

Directors monitor Hunting’s trading performance,

including progress against the Annual Budget,

reviewing regular management accounts and

forecasts, comparing these forecasts to market

expectations and assessing other nancial

matters. They review and approve all public

announcements, including nancial results and

trading statements, and set the dividend policy

of the Group.

The internal control and risk management

framework and associated procedures are

reviewed by the Board. However, key monitoring

procedures are delegated to the Audit Committee.

The compensation of the executive Directors is

set by the Remuneration Committee, who also

review and monitor the remuneration of the

Executive Committee, as well as monitoring the

remuneration structure of the wider workforce.

The Board approves all key recommendations

from the Nomination, Ethics and Sustainability,

Remuneration and Audit Committees and

approves all appointments to these Committees.

Board activities

Board and Committee materials are circulated in

a timely manner ahead of each meeting. At each

meeting, the Chief Executive updates the Board

on key operational developments, provides an

overview of the global markets, reports on health

and safety, and highlights milestones reached

towards the delivery of Hunting’s strategic

objectives. The Finance Director provides an

update on the Group’s nancial performance,

position, trading outlook, banking arrangements,

legal issues, analyst discussions and statutory

reporting developments relevant to Hunting.

These topics lead to discussion, debate and

challenge among the Directors.

The Group’s governance framework includes the

Board and the Executive Committee. Medium-

term planning initiatives are formalised within the

Executive Committee, which are then reviewed

regularly by the Board and are supported by

periodic presentations by members of the

Executive Committee. The Board met nine times

in 2023 (2022 – eight times), with the attendance

record noted below:

Number of meetings held 9

Number of meetings attended

(actual/possible):

Annell Bay 9/9

Stuart Brightman 9/9

Carol Chesney 9/9

Bruce Ferguson 9/9

Jay Glick 9/9

Paula Harris 9/9

Jim Johnson 9/9

Keith Lough 9/9

Corporate Governance Report continued

Hunting PLC Annual Report and Accounts 2023 116Strategic Report Corporate Governance Financial Statements Other Information

2023 Board Meetings and Agenda Items 26 Jan 25 Feb 19 Apr 6 Jun 14 Jul 23 Aug 4 Oct 30 Oct 6 Dec

Standing items

Chief Executive’s Report • • • • • • • •

Finance Director’s Report • • • • • • • •

Operational Reports • • • •

Quality Assurance, Health, Safety & Environmental Reports • • • •

Shareholder Report • • • • • • •

Other items

Annual/Interim Report and Accounts • •

Board Evaluation • •

Risk Review •

AGM Preparation •

Trading Statement • •

Strategy • • • • • • • • •

Organisation and Personnel Review and Succession •

Annual Budget •

Company Chair/Senior Independent Director Investor Feedback •

For the appointment of executive Directors, the

Company enters into a service contract with the

Director, which reects the terms of employment,

remuneration and termination, taking into account

the country of residence and local employment

laws applicable at the time of the appointment.

For more information on the service contracts of

the current executive Directors, please see the

Remuneration Committee Report on page 144.

Composition and diversity

As part of the Board’s focus on refreshing its skills

and expertise as Hunting enters another growth

phase, Stuart Brightman was appointed as a

new, independent non-executive Director on

3 January 2023. Mr Brightman was appointed to

all Board Committee’s on appointment, and at

the 2023 AGM automatically retired and offered

himself for reappointment by shareholders.

Shareholders duly reappointed Mr Brightman

at the 2023 AGM.

The Nomination Committee continued its search

process with a view to appointing a further

non-executive Director who provides non-oil and

gas experience as the Company executes the

Hunting 2030 Strategy. During the second half of

2023, the Nomination Committee interviewed

candidates and at its meeting on 8 January 2024,

proposed the appointment of Dr Margaret Amos.

Dr Amos was appointed to the Board on

10 January 2024 and was appointed to all Board

Committees from this date. Dr Amos will

automatically retire at the 2024 AGM, and offer

herself for reappointment by the shareholders.

For further information on the biographical details

of the Board of Directors, please see pages 112

an d 113.

Board tenure

at 29 February 2024

Less than 3 years

3-5 years

6-9 years

1/3

Corporate Governance Report continued

Average tenure of the Board

5 years

at 29 February 2024

(2022 – 4 years)

Average tenure of the non-executive

Directors

5 years

at 29 February 2024

(2022 – 5 years)

Tenure

The average tenure of the Board, at 29 February

2024, is ve years (2022 – four years). Within the

non-executive Directors, the average tenure is

ve years (2022 – ve years).

Jay Glick was appointed to the Board in 2015,

was appointed Company Chair in 2017 and will

retire as a Director at the conclusion of the AGM

on 17 April 2024.

As noted in the Nomination Committee Report,

Annell Bay, Chair of the Remuneration Committee,

was reappointed for a further 12 months from 2

February 2024, to oversee the nal implementation

of the new Directors’ Remuneration Policy and

Long-Term Incentive Plan. Ms Bay will retire no

later than the tenth anniversary of her appointment,

being 2 February 2025. The Board continues to

consider Ms Bay as an objective and independent

non-executive Director.

Hunting PLC Annual Report and Accounts 2023 117Strategic Report Corporate Governance Financial Statements Other Information

Corporate Governance Report continued

Board of Directors and Executive Committee

At 29 February 2024

Gender

Number of

Board Members % of Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

executive

management

% of executive

management

Men 5 56 4 11 92

Women 4 44 0 1 8

Other categories – – – – –

Not specied/prefer not to say – – – – –

Ethnicity

Number of

Board Members % of Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

executive

management

% of executive

management

White British or other White (including minority-white groups) 8 89 4 10 83

Mixed/Multiple Ethnic Groups – – – – –

Asian/Asian British – – – 2 17

Black/African/Caribbean/Black British 1 11 – – –

Other ethnic group, including Arab – – – – –

Not specied/prefer not to say – – – – –

With this gender balance and current allocation of roles within the composition of the Board, Hunting is compliant with two of the three requirements

under Listing Rule 9.8.6, with the requirement for at least one senior Board position being held by a women not being met. The Directors anticipate that

this non-compliance will be resolved in the next few years as further refreshing of the Board continues.

The Board is currently reviewing the Group-wide ethnicity prole and will likely target a diversity prole for the senior management team similar to the whole

workforce. Further information on this area will be incorporated in the 2024 Annual Report.

Board gender diversity

Male

Female

Workforce gender diversity

Male

Female

Senior management gender diversity

Male

Female

56%

44%

75%

25%

68%

32%

Hunting PLC Annual Report and Accounts 2023 118Strategic Report Corporate Governance Financial Statements Other Information

Creation of sustainable value for our stakeholders

Purpose

At the heart of Hunting’s long-term strategy

and success is a reputation based on trust

and reliability.

Hunting’s products are designed to operate in

a safe and reliable way, to ensure our customers

meet their strategic objectives, while protecting

people and the environment. Our strategy aims

to offer technically differentiated products that

meet these customer demands.

We choose to operate in the oil and gas industry,

which supports the energy demands of today’s

global community.

Our customers are constantly pursuing higher

levels of safety and reliability and better efciencies,

leading to a lower cost of operation for themselves,

while aiming to be good stewards of the

environment, through a safe and responsible

approach to oil and gas eld development.

This drives our ambition to deliver innovative

technologies and products to enable us to lead

the market and be the supplier of choice.

Our products and services include precision-

engineered components that are quality-assured

to exceed the highest levels of industry

regulation. Our employees are highly trained to

ensure our operations are safe and deliver total

customer satisfaction.

The Directors have approved Hunting’s continued

focus on energy-related markets, while using the

earnings generated from that sector to diversify

into other non-oil and gas sectors that utilise our

core competencies and offer an attractive return.

Corporate Governance Report continued

Our Purpose – to be a highly trusted innovator and manufacturer of technology

and products that create sustainable value for our stakeholders.

Purpose

Our purpose shapes our strategic decisions

and drives our business model

Our culture and values are aligned with our purpose

Business Strategy

(page 6)

Risk Management

(page 96)

Business Model

(page 28)

Our culture and values

underpin our business model

Culture and Values

(page 120)

Hunting PLC Annual Report and Accounts 2023 119Strategic Report Corporate Governance Financial Statements Other Information

Corporate Governance Report continued

Culture and values

Our culture is the shared way that we do things in the Company and is underpinned by our core values of respect, honesty, integrity, innovation and reliability.

The Company has been operating since 1874 and has a long history with a strong culture of excellence. At the heart of Hunting’s culture is our people.

Our culture is shaped and determined by the way we:

Attract and retain people

Training and development

To ensure we deliver for our

customers, we train and develop

our people to make sure we

maintain a highly skilled workforce

ready to deliver quality-assured

products and services.

Fair remuneration

To retain our staff, our employees

are fairly remunerated, which, in

addition to a competitive base

salary, can comprise a range of

benets. Given the competitive

landscape of our industry, our base

levels of pay are well above

minimum wage thresholds.

Safety

Zero harm to our employees.

Key metrics

• HSE hours of training per

employee;

• Cyber security training;

• Voluntary turnover rate;

• Salary and benets;

• Talent development;

• Succession planning;

• Total recordable incident

rate; and

• Total near-miss frequency rate.

Work together

Speak up

Our culture encourages a “speak

up” environment to enable our

processes to be improved, but also

to address possible concerns from

all levels of staff.

Equity and inclusion

Hunting prides itself on being a fair

and responsible employer. We are

committed to creating a positive

workplace environment for all of

our employees; one that is safe,

respectful, fair and inclusive, and

free of any form of harassment,

bullying or discrimination.

Diversity and inclusion

The Company recognises the

business benets of having a

diverse workforce, including a

diverse Board, as this supports the

delivery of high performance and

increases the effectiveness of the

Company.

Key metrics

• Diversity of employees;

• Diversity at management level;

• SafeCall reports; and

• Employee engagement survey.

Do business in a responsible

and sustainable way

Strong HSE and quality

assurance ethic

We seek to achieve and maintain

the highest standards of safety

for our employees, customers,

suppliers and the public.

Looking after local communities

The Board encourages community-

focused initiatives, with the

Executive Committee responsible

for identifying local activities and

projects to support. This delegation

allows regional cultural practices to

be taken into account.

Commitment to minimising our

impact on the environment

We protect and minimise our

impact on the environment in which

we operate, and where our

products are used. We focus on

climate change – setting targets

for, and achieving, emissions

reductions and mitigating climate-

related risks.

Key metrics

• Total recordable incident rate;

• Total near-miss frequency rate;

• Internal manufacturing reject rate;

• Scope 1 and 2 emissions; and

• ISO accreditation of facilities.

Make decisions

Flat management structure

The Group’s at management

structure has short chains of

command, which allows for rapid,

considered decision making that

empowers and enables our

employees to be part of the process

to take the Company forward.

Ongoing engagement with our

shareholders, customers,

suppliers, and employees

Stakeholder engagement is a key

element for our culture as our

stakeholders enable Hunting to

deliver its strategy.

Incorporating environmental

concerns into our business

decisions

Our operating principles are

focused on containing and

reducing our carbon footprint.

Key metrics

• Employee engagement survey;

• Townhall meetings;

• NED engagement meetings;

• Capital Markets Day; and

• Customer satisfaction surveys.

Maintain high business

standards

Code of Conduct and Supplier

Code of Conduct

Hunting’s Code of Conduct

underpins all our engagements,

internally and externally.

Internal and external audit &

assurance, risk assessment

Hunting is committed to carrying

out its business in a responsible

way and holds itself to high

standards of honesty and integrity.

Long-term relationships with

core stakeholders

Creating positive, long-term

relationships with our key

stakeholders ensures that we

are sustainable.

Key metrics

• Code of Conduct training;

• Rolling out Supplier Code

of Conduct;

• Prompt payment of suppliers;

• Total recordable incident

rate; and

• Total near-miss frequency rate.

Hunting PLC Annual Report and Accounts 2023 120Strategic Report Corporate Governance Financial Statements Other Information

Corporate Governance Report continued

Board engagement

The Directors have oversight of all stakeholder

engagement activities and receive reports on

regional activities throughout the year.

The Board meets shareholders as part of an

investor relations programme of work which

includes the Company Chair, Senior Independent

Director, Chief Executive and Finance Director.

All the Directors participate in employee

engagement initiatives.

Engagement with Customers and Suppliers is

primarily delegated to the Chief Executive and

Executive Committee members.

Stakeholder engagement

Details of engagement activities with all our key

stakeholders and the Board can be found, within

the Strategic Report, on pages 31 to 39.

Engagement processes have been embedded

within all business units to enhance transparent

two-way dialogue between the Board and the

Group’s employees. During the year, the Board

met with employees at our Houma, Louisiana

facility, as part of ongoing engagement

programmes.

Our employees are also encouraged to engage

in dialogue with management to raise issues of

concern. These procedures are supported by

an independent reporting service operated by

SafeCall, where condential matters can be

raised with the Board.

In the year, the Directors reviewed the

organisational structure of the Group, noting its

simplicity, with short chains of command to allow

for rapid business decision making. It was noted

that this also allowed all levels of the workforce

to communicate with the senior management

team directly.

As part of its regular Board meeting schedule,

the Directors review HSE and Quality Assurance

reports from the Group’s global operations.

In-line with the recommendations of the Code,

the Board has established procedures to monitor

culture and to ensure the views of the workforce

are understood by the Directors. In 2023, the

Group completed a second, all-employee

engagement survey. The results of the survey

were reviewed by the Directors, with

improvements in engagement being noted since

the last survey in 2019. Supporting this initiative

has been a process of formalising other

employee engagement initiatives including

management briengs, and introducing

roundtable employee discussion forums and

regular townhall meetings.

During the year, the Company held its rst Capital

Markets Day where the executive Directors and

senior leadership team launched a resilient

long-term strategy, which is aimed at delivering

growth and strong returns to 2030 in a

sustainable and responsible way.

Shareholder views

The Company Chair and Senior Independent

Director met with shareholders in January 2023

and January 2024 to discuss governance,

remuneration strategy and other matters.

Between July 2023 and February 2024, Annell

Bay, as Chair of the Remuneration Committee,

met with shareholders to discuss the new

Directors’ Remuneration Policy and Long-Term

Incentive Plan, with extensive engagement

beginning in July 2023 up to the date of the

publication of this Annual Report. Shareholder

feedback was considered by the Remuneration

Committee and has been incorporated into the

policy where appropriate.

During the year, the Chief Executive and Finance

Director also regularly met shareholders to discuss

performance and strategy. Investor meeting

feedback reports are prepared by the Group’s

advisers and are circulated to the Directors.

During the year, an investor perception survey

was also initiated, which was conducted by a

third party on behalf of the Company, with

feedback presented to the Board. The survey

sought to appreciate major investors’ perceptions

on strategy, performance, executive management

and other issues.

Annual General Meeting

The Annual General Meeting (“AGM”) of the

Company is the normal forum for all shareholders

to meet the Directors and to ask questions about

the strategy and performance of the Group.

The formal business of the AGM includes

receiving the Annual Report and Accounts,

approving remuneration policies and outcomes,

re-electing Directors, appointing the auditor and

providing the Directors with powers to transact

Company business on behalf of its members.

The Chief Executive normally provides a

presentation of the Group’s performance and

answers questions from shareholders.

At the Company’s AGM in April 2023, an open

meeting was held where shareholders had the

opportunity to meet the Directors and to ask

questions. All resolutions were passed at the

AGM with good majorities, with no resolutions

receiving less than 80% of votes in favour.

Details of the resolutions put to shareholders

at the meeting can be found within the Notice of

Meeting located within the “General Meetings”

section of the Company’s website

www.huntingplc.com. The Company’s 2024

AGM is again being planned as an open meeting.

Shareholders will be able to access the AGM via

a webcast, where questions can be submitted

ahead of and during the meeting to be answered

by the Board.

Speak up/whistleblowing service

An independent and anonymous whistleblowing

reporting service has been in place for many

years, allowing any employee access to the

Board to raise matters of concern. During the

year, there were six reports received through the

SafeCall service (2022 – two reports). Reports

received are reviewed by Keith Lough, the

Group’s Senior Independent Director, who also

receives and approves all investigation reports

and corrective actions.

Conicts of interest

Each Director is required to declare any potential

conict of interest that exists, or which may arise.

These are formally recorded by the Company

Secretary. Appropriate decision making, in light

of this declaration, is undertaken which could

include a Director not participating in a Board

decision or vote. Each Director is required to

complete a declaration of known conicts of

interest annually.

Hunting PLC Annual Report and Accounts 2023 121Strategic Report Corporate Governance Financial Statements Other Information

Responsibilities of the Company Chair

• lead and build an effective and balanced Board;

• chair meetings of the Board, ensuring the agenda and materials are t for purpose;

• ensure the Directors are provided with accurate, timely and relevant information;

• promote good dialogue between all Directors, with strong contributions encouraged from all

Board members;

• meet the non-executive Directors without the executive Directors present;

• discuss training and development with the non-executive Directors;

• arrange Director induction programmes;

• arrange an annual Board evaluation and act on its ndings; and

• ensure shareholders and other stakeholders are communicated with effectively.

Responsibilities of the Chief Executive

• manage the day-to-day activities of the Group;

• make strategic planning recommendations to the Board and implement the agreed Board strategy;

• identify and execute new business opportunities, acquisitions and disposals;

• ensure appropriate internal controls are in place;

• report to the Board regularly on the Group’s performance and position; and

• present to the Board an annual budget and operating plan.

Responsibilities of the non-executive Directors

• provide independent challenge to executive management on the proposed strategy;

• monitor the execution of the approved strategy and of the nancial performance of the Company

on an ongoing basis;

• ensure executive management remains motivated and incentivised through a responsible

remuneration policy; and

• ensure the integrity of nancial information and that internal control and risk management

processes are effective and defensible.

Responsibilities of the Senior Independent Director

• provide a sounding board for the Company Chair and serve as an intermediary to other Directors

when required;

• be available to shareholders, should the normal channels through the Company Chair and Chief

Executive not be appropriate;

• chair meetings of the Board in the absence of the Company Chair;

• lead an annual performance evaluation of the Company Chair, supported by the other non-

executive Directors; and

• attend meetings with shareholders to develop a balanced understanding of any issues or concerns.

Responsibilities of the Company Secretary

The Company Secretary is appointed by the Board and supports the Company Chair in providing all

materials and information ows between the executive and non-executive Directors, specically on

matters of governance and regulatory compliance. The Company Secretary is also available to the

Board and all its Committees for advice and ensures that all procedures are followed.

Directors’ and ofcers’ liability insurance

Hunting maintains insurance against certain

liabilities which could arise from a negligent act or

a breach of duty by the Directors and Ofcers in

the discharge of their duties. This is a qualifying

third-party indemnity provision that was in force

throughout the year, for both the parent

Company and its subsidiaries.

External appointments

The Group has procedures in place that permit

the executive Directors to join one other company

board. In the year, neither the Chief Executive nor

the Finance Director held any external board

appointments.

Corporate Governance Report continued

Division of responsibilities

(Section 2 of the Code)

The Hunting Board at 29 February 2024

comprises the independent non-executive

Company Chair, Chief Executive, Finance

Director and six independent non-executive

Directors, one of whom is the Senior

Independent Director.

The proles and experience of each Director

are found on pages 112 and 113. In-line with the

Code’s recommendations, the Notice of Annual

General Meeting incorporates details of the

contribution in the year by each Director and the

Board’s reasons for proposing the re-election of

each Director.

There is a clear division of responsibilities

between the Company Chair and Chief

Executive, with the Company Chair required to

lead the Board, while the Chief Executive runs

the Group’s businesses as shown on the right.

Hunting PLC Annual Report and Accounts 2023 122Strategic Report Corporate Governance Financial Statements Other Information

Executive Committee

The Group has an Executive Committee (“ExCo”)

comprising the senior leaders of the Group and

the executive Directors. The ExCo meets formally

four times a year to discuss the quarterly

performance of each operating segment,

strategic initiatives, including the progress of

capital investment programmes, Quality

Assurance and HSE performance, in addition

to Human Resources, Information Technology

and Risk Management reports.

For further information on the biographical details

of the Executive Committee, please see page 114.

Composition, succession

and evaluation

(Section 3 of the Code)

Board appointments

All appointments to the Board are in accordance

with the Company’s Articles of Association and

the Code and are made on the recommendation

of the Nomination Committee. Recruitment of

new Directors follows Group policy, including

the formulation of a detailed description of the

role that gives consideration to the required skills,

experience and diversity requirements for the

process. The Directors usually review a list of

candidates, prior to a shortlist being recommended

by the Nomination Committee, ahead of

face-to-face interviews with each Director.

Board independence

(including Company

Chair)

At 29 February 2024

Independent

Non-Independent

Board independence

(excluding Company

Chair)

At 29 February 2024

Independent

Non-Independent

78%

22%

75%

25%

Corporate Governance Report continued

As noted above, Stuart Brightman was

appointed to the Board on 3 January 2023 and

Margaret Amos was appointed on 10 January

2024 as new, independent, non-executive

Directors of the Board, in-line with the succession

and rotation recommendations tabled by the

Nomination Committee. On 2 February 2024,

Annell Bay was appointed for a further 12-month

period, and will step down as a Director no later

than of 2 February 2025.

Jay Glick will step down as a Director at the

conclusion of the AGM on 17 April 2024.

Board skills and experience

The expertise and competencies of the

non-executive Directors are noted in the table

below, and underpin the balance of skills and

knowledge of the Board:

Director Expertise

Margaret Amos Accounting and nance, aviation markets, UK quoted companies.

Annell Bay Upstream oil and gas, US energy market development and US quoted companies.

Stuart Brightman Oileld services and manufacturing, investor relations, business transformation and

US quoted companies.

Carol Chesney Accounting and nance, UK corporate governance, ethics compliance and UK

quoted companies.

Jay Glick Oileld services and manufacturing, US energy market development and US

quoted companies.

Paula Harris Oileld services and manufacturing, US energy market development, investor

stewardship and ESG.

Keith Lough Accounting and nance, upstream oil and gas, UK energy regulation and market

development and UK quoted companies.

Board independence

On 5 December 2023, the Nomination

Committee recommended the appointment of

Annell Bay for a further 12-month period. The

Nomination Committee, as part of its rigorous

evaluation, considered Ms Bay’s independence

and concluded that, despite exceeding the

recommended nine-year timescale, Ms Bay

retained a strongly independent contribution

to the Board.

With the appointment of Margaret Amos on

10 January 2024 and at the date of signing these

accounts, being 29 February 2024, the Board,

including the Company Chair, comprised 78%

independent, non-executive Directors. Excluding

the Company Chair, the Board comprised 75%

independent, non-executive Directors.

The Board, including the Chair, has access

to professional advisers, at the Company’s

expense, to full their various Board and

Committee duties.

Hunting PLC Annual Report and Accounts 2023 123Strategic Report Corporate Governance Financial Statements Other Information

Remuneration

(Section 5 of the Code)

Clarity and simplicity

The Directors’ Remuneration Policy is based on xed and variable emoluments. Fixed emoluments

are benchmarked against other global energy services companies and UK listed companies, to

ensure the Company can attract and retain talent. Variable emoluments are based on two

structures, an annual bonus and long-term incentive plan.

Both variable structures are based on the Group’s disclosed key performance indicators, including

both nancial and non-nancial measures, and only pay out when performance has been

achieved. The Chief Executive’s remuneration is benchmarked against global peers, who are

mostly headquartered in the US, while the Finance Director is benchmarked against UK listed

companies of similar size and complexity.

Non-executive Director fees are set at levels that take into account the time commitment and

responsibilities of each role. The non-executive Directors do not receive cash bonuses or other

variable emoluments. The fees are benchmarked against other companies of a similar size, prole

and protability and are reviewed annually by the executive Directors.

The Company Chair’s fee is set by the Remuneration Committee.

The pay structures of the senior management team and wider workforce are generally based on

the Company’s shareholder approved Directors’ Remuneration Policy, and can include pension

and healthcare benets as well as an annual bonus and long-term incentives. Shareholder

engagement is a key theme of the Directors’ Remuneration Policy, with proactive engagement

occurring whenever major changes to the Policy or Committee decision making are contemplated.

The Committee is satised that, over time, shareholder feedback has been reected in the

Directors’ Remuneration Policy.

Risk, predictability and proportionality

The Committee believes that the Directors’ Remuneration Policy aligns with the risk prole of the

Company, encouraging growth in the long term and discouraging excessive risk taking. The Policy

is weighted towards variable pay on the delivery of long-term growth. As noted in the chart on page

125, the remuneration paid to the Chief Executive over time has aligned well with the Group’s

performance, with annual bonus and long-term incentives only vesting on performance.

Alignment

The Board and the Remuneration Committee have reviewed the Company’s Purpose, Values and

Culture and believe that the remuneration framework operated by the Company encourages strong

performance, based on a culture of honesty and integrity and putting stakeholder needs at the

forefront of our strategic priorities.

Corporate Governance Report continued

The current Directors’ Remuneration Policy was

approved by shareholders on 21 April 2021. The

Policy aligns Hunting’s remuneration practices

with the 2018 UK Corporate Governance Code,

and includes:

• Increasing the alignment of the pension

arrangements of executive Directors with the

workforce; and

• Introducing a post-employment shareholding

policy for the executive Directors.

In respect of the 2021 Directors’ Remuneration

Policy and the 2018 Code, the Committee notes

the following:

• The Company’s long-term incentive

arrangements extend to a ve-year timeframe,

with a three-year vesting period and two-year

post-vesting holding period;

• Malus and clawback provisions are in place

for all variable remuneration, with additional

triggers introduced in 2021 to reect best

practice;

• The Committee has exibility within the

Directors’ Remuneration Policy to exercise

appropriate discretion; and

• Pension provisions for new executive Director

appointments will align with the workforce.

Further, in 2021 the Remuneration Committee

introduced ESG and carbon-focused deliverables

into the executive Directors’ personal objectives

contained in the Annual Bonus Plan.

Audit, risk and internal control

(Section 4 of the Code)

The Group’s policies, procedures and approach

to audit, risk and internal control is described

within the Risk Management section (pages 96 to

105) and the Audit Committee Report (pages 155

to 159) of the Annual Report and Accounts. The

Risk Management section includes information

on the Group’s principal and emerging risks, as

required by the Code.

Hunting PLC Annual Report and Accounts 2023 124Strategic Report Corporate Governance Financial Statements Other Information

The following chart summarises the components of executive remuneration and the key performance

indicators that are inputs to the remuneration outcomes.

New Directors’ Remuneration Policy and

Long-Term Incentive Plan

The Directors are submitting a new Directors’

Remuneration Policy for shareholder approval at

the 2024 AGM. Details of the new proposals can

be found on pages 137 to 145. Given the expiry

of the Hunting Performance Share Plan in

2023, the Directors are also submitting a new

Long-Term Incentive Plan for Shareholder approval.

The Board believes that the remuneration

framework aligns with the Purpose and Culture

of the Group, which is based on fair remuneration

and reects performance in the long term. This

framework is also in place for the senior

management of the Group, with participation in

annual bonuses and inclusion in the long-term

incentive scheme operated by the Company also

featuring in emolument structures in many levels

of the workforce.

On behalf of the Board

John (Jay) F. Glick

Company Chair

29 February 2024

Base Salary Benets Pension Provision

Fixed Variable

Summary of remuneration structure and KPIs

500

1,000

1,500

2,000

2,500

3,000

3,500

2019 2021 202320222020

-50

-25

100

125

Chief Executive Pay – $k (left axis)

Adjusted PBT – $m (right axis)

Adjusted result before tax (USD $m) vs Chief Executive pay (USD $k)

Corporate Governance Report continued

Annual

Bonus

Long-Term

Incentive Plan

KPIs

Adjusted prot before tax

ROCE

Personal Objectives

KPIs

ROCE

TSR

Adjusted diluted EPS

FCF

Safety

Quality Assurance

Hunting PLC Annual Report and Accounts 2023 125Strategic Report Corporate Governance Financial Statements Other Information

Nomination

Committee Report

John (Jay) F. Glick

Chair of the Nomination Committee

Member Invitation

Number of meetings held 6

Number of meetings attended

(actual/possible):

Annell Bay 6/6 –

Stuart Brightman 6/6 –

Carol Chesney 6/6 –

Bruce Ferguson – 6/6

Jay Glick (Committee Chair) 6/6 –

Paula Harris 6/6 –

Jim Johnson – 6/6

Keith Lough 6/6 –

The work of the Nomination

Committee during 2023 has been

focused on delivering a seamless

succession of the Company

Chair, the appointment of new,

independent non-executive

Directors and the delivery of a

Board prole which aligns with

best practice governance

recommendations in the UK.

On 17 April 2024, I will retire from the Board

following completion of nine years’ service, and

I would like to thank my fellow Directors for their

support since my appointment in 2017. The

counsel and courage of the Directors and

Hunting’s senior leadership team through the

COVID-19 pandemic has been a source of

inspiration to me as the Board navigated those

highly challenging times. But as we look to the

future, I am sure Hunting is poised for a period

of strong growth, with a refreshed Board prole

that will deliver this strategic ambition for our

shareholders and stakeholders.

Composition and frequency of meetings

The Committee comprises the Company Chair

and the independent non-executive Directors of

the Company. Jay Glick chairs the Committee.

The Committee meets as required to discuss

succession matters at both the Board and

Executive Committee levels. During 2023, the

Committee met six times (2022 – four times).

The Committee operates under written Terms

of Reference approved by the Board, which

are published on the Company’s website at

www.huntingplc.com.

The attendance of the Nomination Committee

during 2023 is noted in the table on the left.

As we look to the future, I am

sure Hunting is poised for a

period of strong growth, with

a refreshed Board prole.

Terms of reference and Committee

effectiveness

At its December 2023 meeting, the Committee

reviewed its terms of reference and considered

its effectiveness, concluding that its performance

had been satisfactory during the year.

Company Chair succession

During 2023, the Nomination Committee agreed

a process to appoint a successor to Mr Glick,

which included an evaluation of internal

candidates to be considered in the process.

Following this preliminary evaluation, Messrs

Brightman and Lough were short-listed as

possible successors to Mr Glick. Given Mr

Lough’s role as Senior Independent Director,

who would normally lead this process, the Board

agreed to appoint a wholly independent

sub-Committee of the Nomination Committee

comprising Ms Bay, Mrs Chesney and Ms Harris.

Ms Bay led the sub-committee’s deliberations,

given her Board tenure. Interviews by the

sub-Committee were completed during August

2023 with Messrs Brightman and Lough, with

the sub-Committee concluding that an external

search process was not required, given the

signicant experience of these internal candidates.

On Monday 8 January 2024, the Nomination

Committee met to receive the recommendation

of the sub-Committee, with Stuart Brightman

being recommended as the successor to

Mr Glick. This recommendation was agreed by

the Nomination Committee and agreed by the

wider Board at the Meeting of Directors on

Monday 8 January 2024.

Hunting PLC Annual Report and Accounts 2023 126Corporate Governance Financial Statements Other Information

Strategic Report

Mr Brightman will succeed Mr Glick as Company

Chair at the conclusion of the 2024 AGM, when

Mr Glick will retire and step down from the Board.

Appointment of Stuart Brightman

Stuart Brightman was appointed as a new

independent non-executive Director of the

Company on 3 January 2023. On appointment,

Mr Brightman was appointed to all of the Board’s

Committees. Following the Company’s Articles

of Association, Mr Brightman automatically

retired at the 2023 AGM and was reappointed

by shareholders.

Heidrick & Struggles assisted the Committee

in the search process for Mr Brightman.

Appointment of Margaret Amos

Following the discussions of the Nomination

Committee across the year, in respect of the

rotation of Directors and refreshing of the Board,

the Committee met a number of times in 2023

to consider new Director candidates.

The recruitment objectives for the new

Director included:

(1) broadening the Board skills and expertise

in high-value industries outside of the oil and

gas sector;

(2) retaining an appropriate balance of

UK Directors given the Company’s London

listing; and

(3) retaining a strong gender balanced prole

to the Board. The Nomination Committee

and wider Board agreed that these objectives

aligned with the long-term success of the

Company, particularly in light of the strategic

ambitions announced as part of the Hunting

2030 Strategy.

Interviews were held during September and

October and, following the January 2024 meeting

of the Committee, a proposal was submitted to

the Board to appoint Dr Margaret Amos as a

new, independent, non-executive Director. Dr

Amos was appointed on 10 January 2024, and

was appointed to all of the Board’s Committees

from this date. Following the Company’s Articles

of Association, Dr Amos will automatically retire

at the 2024 AGM and will offer herself for

reappointment by shareholders on 17 April 2024.

Details of Dr Amos’ skills and expertise are noted

on page 112.

Heidrick & Struggles assisted the Committee

in the search process for Dr Amos.

Reappointment of Annell Bay

Annell Bay was appointed to the Board on

2 February 2015 and was appointed Chair of

the Remuneration Committee in August 2018.

During 2023, the Remuneration Committee

developed a new Directors’ Remuneration Policy

and Long-Term Incentive Plan, which are to be

submitted to shareholders for approval at the

2024 AGM. Since H2 2023, the Remuneration

Committee, led by Ms Bay, has consulted major

shareholders on the new proposals contained in

the Directors’ Remuneration Policy, which is an

ongoing process. To provide continuity to the

Board and Remuneration Committee, the

Nomination Committee met on 5 December

2023 to consider the reappointment of Ms Bay

for an additional 12-month period, to oversee the

completion of the discussions with shareholders.

Following a rigorous evaluation process, which

included an assessment of Ms Bay’s ongoing

independence, the Committee concluded that

Ms Bay remained a highly effective, independent,

non-executive Director. Ms Bay will, therefore,

remain as a Director up to the latest date of

2 February 2025, and will be submitted for

re-election by shareholders at the 2024 AGM, as

has been the Company’s practice for many years.

Board roles

With the refreshing of the Board noted above,

the Company has announced that on Mr Glick’s

retirement from the Board, Ms Amos will take

over as Chair of the Ethics and Sustainability

Committee.

Mr Brightman will take over as Chair of the

Nomination Committee, as part of his succession

to being Company Chair.

Gender and ethnicity balance

With the appointment of Dr Amos and following

the retirement of Mr Glick on 17 April 2024, the

Hunting Board will have an equal gender balance,

which will meet the requirements of UK regulators.

Senior management development

and succession

During the year, the Nomination Committee

and wider Board have received reports on the

development of the Group’s senior management

team, with Russell Reynolds being appointed in

H2 2023 to assist executive management with

this process.

Throughout the year, all managing directors of

the Group, who lead each operating segment,

have presented to the Board as part of a

broader initiative to increase interaction between

the Directors and the Company’s senior

leadership team.

The Group’s Chief HR Ofcer also submitted

detailed succession plans for key positions

across the Hunting organisation.

Internal Board evaluation

In December 2023, the Board completed an

internally facilitated board evaluation, which was

coordinated by the Company Chair and

Company Secretary.

The process included the completion of

a governance and board effectiveness

questionnaire, the feedback from which was

reviewed by the Board at its meeting in February

2024. The Directors noted the observations and

implemented plans to address the ndings.

On behalf of the Board

John (Jay) F. Glick

Chair of the Nomination Committee

29 February 2024

Nomination Committee Report continued

Hunting PLC Annual Report and Accounts 2023 127Strategic Report Corporate Governance Financial Statements Other Information

Ethics and

Sustainability

Committee Report

John (Jay) F. Glick

Chair of the Ethics and Sustainability Committee

Member Invitation

Number of meetings held 2

Number of meetings attended

(actual/possible):

Annell Bay 2/2 –

Stuart Brightman 2/2 –

Carol Chesney 2/2 –

Bruce Ferguson – 2/2

Jay Glick (Committee Chair) 2/2 –

Paula Harris 2/2 –

Jim Johnson – 2/2

Keith Lough 1/2 –

The work of the Ethics and

Sustainability Committee has

continued throughout 2023, with

the focus on the development

and reporting of the Group’s

environmental, social and

governance (“ESG”) matters.

Attention continues to be given to improving

the quality of our carbon and climate data, with

Hunting completing an assurance programme

over the Company’s scope 1 and 2 emissions

during the year. The process conrmed the

robust processes in place to capture this data.

The Group also commenced a process to

determine its scope 3 carbon emission

inventories. We are pleased to be reporting

initial scope 3 data in this Annual Report and

aim to complete this scope of work in 2024.

As part of the Capital Markets Day, the Company

conrmed its commitment to ensuring long-term

sustainability and its focus on reducing its carbon

emissions and increasing the purchase of

electricity from renewable sources.

In summary, the Ethics and Sustainability

Committee is encouraged by the Company’s

progress in these important areas over the past

two years, and looks forward to reporting further

progress in the future.

Composition and frequency of meetings

The Committee comprises the Company Chair

and the independent, non-executive Directors of

the Company. Jay Glick chairs the Committee.

The Committee met twice in the year, as

planned, in June and December 2023. The

Committee operates under written terms of

reference approved by the Board, which are

published on the Company’s website at

www.huntingplc.com.

The attendance of the Ethics and Sustainability

Committee is noted in the table on the left.

As noted elsewhere, Mr Glick is due to retire from

the Board on 17 April 2024, with Margaret Amos

to Chair the Committee from this date.

Responsibilities

The principal responsibilities of the Ethics and

Sustainability Committee are to:

• Monitor the Group’s scope 1, 2 and 3

greenhouse emissions and the initiatives to

contain and reduce its carbon footprint;

• Monitor public disclosures in respect of the

Task Force on Climate-related Financial

Disclosures (“TCFD”) framework;

• Monitor the risks and opportunities which

climate change presents to the Group’s

operations;

• Monitor the quality assurance and health,

safety and environmental reports prepared

by the Executive Committee;

• Monitor the Group’s employee and human

capital matters, including engagement with

Hunting’s workforce;

• Monitor the Group’s interaction with other key

stakeholders, including customers, suppliers

and communities;

• Monitor the Group’s Modern Slavery Act

initiatives;

• Monitor the Group’s policies and procedures

in respect of sanctioned territories;

• Monitor the Group’s whistleblowing

procedures; and

• Monitor the Group’s anti-bribery and

corruption initiatives.

Hunting PLC Annual Report and Accounts 2023 128Corporate Governance Financial Statements Other Information

Strategic Report

In 2023, the Group

completed an assurance

programme over its scope

1 and 2 greenhouse gas

emissions data. S&P Global

was appointed in H2 2022

to complete this work, with

the assurance process

completing in July 2023.

Terms of reference and Committee

effectiveness

At its December 2023 meeting, the Committee

reviewed its terms of reference and considered

its effectiveness, concluding that its performance

had been satisfactory during the year.

SASB reporting framework

During the year, the Group reported against the

SASB reporting standards for Oil & Gas –

Services and Industrial Equipment & Machinery,

which are noted on pages 80 and 81.

Work undertaken by the Committee

during 2023

The Committee discussed, reviewed and made

a number of decisions on key areas in 2023,

which are set out below:

Jun Dec

Carbon

Procedures for measuring and

monitoring the Group’s scope 1, 2

and 3 GHG emissions • •

TCFD and CRFD analysis and

reporting • •

Climate scenario reports • •

Stakeholders

Employee and workforce reports • •

Code of Conduct training reports • •

Whistleblowing summary reports • •

Quality assurance and health and

safety reports • •

Community reports • •

Ethics

Anti-bribery and corruption reports • •

Entertainment and hospitality

summary • •

Modern slavery analysis • •

Customer and supplier risk analysis • •

Sanctions and export compliance • •

Carbon and climate

The Group has reported scope 1 and 2

emissions in its Annual Reports for a number of

years. In December 2022, the Committee and

Board approved new carbon reduction targets,

which now commit Hunting to reducing its

carbon footprint (scope 1 and 2 emissions only)

to 50% of the 2019 level or to a maximum of

17,937 tonnes CO

e by 2030. These targets

were announced in March 2023.

In 2023, the Group completed an assurance

programme over its scope 1 and 2 greenhouse

gas emissions data. S&P Global was appointed

in H2 2022 to complete this work, with the

assurance process completing in July 2023,

where the accuracy of the Group’s externally

published data was conrmed.

In Q3 2023, the Company appointed an

independent, third-party expert adviser to assist

Hunting with the determination of the Group’s

scope 3 greenhouse gas inventories. The Group

has started this assessment with the Hunting

Titan operating segment, given that the segment

makes up a material proportion of our scope 1

and 2 emissions. Following analysis, Hunting is

reporting against eight of the 15 pillars of scope 3

inventories. The analysis provides an estimate of

the scope 1, 2 and 3 emissions for Titan, which

enabled the Group’s total emissions to be

extrapolated. For further information, please see

pages 70, 71 and 94. During 2024, this process

will be extended to the Group’s Subsea, EMEA

and Asia Pacic operating segments, to enable

a more accurate assessment of the Group’s total

scope 1, 2, and 3 inventories to be calculated.

The North America operating segment will be

assessed in 2025.

The Committee also reviewed the work

completed in the year with respect to the

Company’s TCFD disclosures, which are

included on pages 82 to 95. Hunting’s TCFD

reporting aligns with the four recommended

pillars of governance, strategy, risk management

and targets. Further, the TCFD disclosures

include the 11 recommended areas of narrative

proposed by the TCFD panel, which was issued

in 2017 and updated in 2021.

For further information on the areas of carbon

and climate, please refer to the Strategic Report.

Employees

The Committee received workforce reports

from the Group’s Chief HR Ofcer in the year,

which included details of employee changes,

tenure and engagement initiatives undertaken.

Of note has been the focus on the development

of talent across the Company, with training

and development programmes being a key

area of consideration.

The HR reports also included diversity and

inclusion planning, which are to be put in place

in the coming years.

At its meeting in June 2023, the Committee

reviewed the results of the Gallup Q12 employee

engagement survey, which had been completed

in H1 2023. The Committee noted the improved

scoring since the last survey in 2019,

underpinning the Board’s belief that Hunting’s

culture and engagement with its employees is

robust. For further information on this process,

please refer to the Strategic Report.

Ethics and Sustainability Committee Report continued

Hunting PLC Annual Report and Accounts 2023 129Strategic Report Corporate Governance Financial Statements Other Information

Quality assurance and HSE (“QAHSE”)

As part of its review work, the Committee

received quality assurance and health and safety

reports from the Group’s Director for QAHSE.

For further information on QAHSE performance,

please refer to the Strategic Report.

Code of Conduct

The Group’s Code of Conduct contains policies

and procedures covering how the Group

conducts business and maintains its relationships

with business partners.

The Code of Conduct deals with a broad range

of issues, including:

• Preventing corruption, including measures that

prevent bribery and corruption in our dealings

with government ofcials;

• Personal integrity, including money laundering;

• Conicts of interest;

• Employee share dealing;

• Human rights;

• Harassment and equal opportunity;

• Tax evasion and facilitation of tax evasion; and

• Our approach to national and international

trade, including compliance with laws and

regulations, competition, and export and

import controls.

The Code of Conduct is available on the Group’s

website and is distributed to most customers.

In 2023, a new Code of Conduct training

programme was rolled out, which reects new

procedures introduced by the Company since

2018, and now includes sustainability

considerations.

Whistleblowing

The Company’s Senior Independent Director,

Keith Lough, is the primary point of contact for

staff or other key partners of the Group to raise,

in condence, concerns they may have over

possible improprieties, nancial or otherwise. In

addition, the Group engages the services of

SafeCall Limited to provide an independent and

anonymous whistleblowing service available to

staff across all of Hunting’s operations. All

employees have been notied of these

arrangements through the corporate magazine,

Group notice boards and the Group’s website.

Communities

The Committee also reviewed a report that

summarised Community initiatives which were

undertaken by the Group’s businesses

throughout the year.

Bribery Act

In compliance with the UK Bribery Act, Hunting

has procedures in place, including the publication

of anti-bribery and corruption policies and

detailed guidelines on interacting with customers,

suppliers and agents, including specic policies

for gifts, entertainment and hospitality.

Senior managers across the Group are required

to report their compliance activities, including an

evaluation of risk areas.

The Group has completed a screening exercise

to identify relevant employees who face a

heightened risk of bribery, with all relevant

personnel completing a formal training and

compliance course, in-line with the Group’s

procedures.

The Committee reviewed the compliance

procedures relating to the Bribery Act at its

December meeting, which incorporates risk

assessments completed by each business unit

and gifts and entertainment disclosures made

during the reporting period.

The Group’s internal audit function reviews local

compliance with the Bribery Act and reports

control improvements and recommendations

to the Committee, where appropriate.

Modern Slavery Act

The Modern Slavery Act 2015 was enacted in

2016 and requires companies to evaluate internal

and external risks related to human trafcking

and modern slavery.

Procedures were introduced during 2016 and

continued in 2023, whereby each business unit

across the Group completed due diligence on

its workforce to highlight employment risks in

relation to trafcking and slavery.

All businesses within the Group also completed

a risk-mapping exercise of their known supply

chain to evaluate those customers and suppliers

to the Group who operate in jurisdictions where

trafcking and slavery is more prevalent. Hunting

published its Modern Slavery Act report in

March 2023, located at www.huntingplc.com.

The new Code of Conduct training course

incorporates information on modern slavery

and trafcking.

Supplier Code of Conduct

In the year, the Company also introduced a

Supplier Code of Conduct, which commits

businesses within Hunting’s supply chain

to many of the principles contained in the

Company’s Code of Conduct.

Sanctions and export compliance

The Group sells products to over 70 countries,

which presents a general risk of export and

sanctions compliance.

Hunting has detailed procedures in place that

monitor sales in medium to high risk territories,

where “End User” disclosures, company

evaluation and analysis are completed prior to

a sales order being agreed.

The Committee received regular reports on these

sales and procedures.

On behalf of the Board

John (Jay) F. Glick

Chair of the Ethics and Sustainability

Committee

29 February 2024

Ethics and Sustainability Committee Report continued

Hunting PLC Annual Report and Accounts 2023 130Strategic Report Corporate Governance Financial Statements Other Information

Annell Bay

Chair of the Remuneration Committee

During 2023, the Committee

undertook a review of

executive Director

remuneration in order to

develop a new Directors’

Remuneration Policy and

Long-Term Incentive Plan for

approval at the 2024 AGM.

Member Invitation

Number of meetings held 7

Number of meetings attended

(actual/possible):

Annell Bay (Committee Chair) 7/7 –

Stuart Brightman 7/7 –

Carol Chesney 7/7 –

Bruce Ferguson – 7/7

Jay Glick – 7/7

Paula Harris 7/7 –

Jim Johnson – 7/7

Keith Lough 7/7 –

Remuneration

Committee Report

Introduction

2023 has been a year of signicant revenue and

prot growth, as Hunting’s core energy markets

increased activity throughout the year. The

strength of these markets enabled the Company

to upgrade prot expectations three times across

2023, with most product lines within the Group

seeing strong demand throughout the year. The

Company also launched its new Hunting 2030

Strategy in September 2023, which laid out the

strategic ambition of the Board to the end of the

decade and included details of the Group’s

intention to grow its presence across the energy

supply chain, to increase energy transition

revenue and to build further non-oil and gas

sales. The strategy supports a sustainable and

resilient growth plan for shareholders, which has

been well received with strongly positive support

from all stakeholders, including institutional

investors and our employees.

Remuneration paid to the Company’s executive

Directors in 2023 was in-line with the

2021 Directors’ Remuneration Policy, with the

Committee applying a consistent approach

to its decision making, in-line with prior years.

Base salary increases were awarded to the

executive Directors in December 2022 and

salaries then remained unchanged during 2023.

2023 annual bonus awards were “Above Target”

due to the earnings momentum noted above,

which resulted in performance that exceeded

the Committee’s expectations. The 2021 grant

under the Hunting Performance Share Plan

(“HPSP”) will vest on 4 March 2024, at 34.2%

of the maximum, reecting performance against

the demanding growth targets set by the

Committee in 2021 as the Company exited

from the COVID-19 pandemic. This award was

also subject to a 22% reduction applied at the

time of the grant to mitigate any potential windfall.

No discretion was applied to incentive outcomes

in 2023.

During 2023, the Committee undertook a review

of executive Director remuneration in order to

develop a new Directors’ Remuneration Policy

(the “new Policy”) for approval at the Annual

General Meeting (“AGM”) on 17 April 2024. At the

upcoming AGM, the Committee will also submit

a new Long-Term Incentive Plan for approval, to

replace the previous Hunting Performance Share

Plan, which granted the last award in 2023 after

ten years of use.

On behalf of the Board, I am

pleased to present the

Remuneration Committee Report

to shareholders for the year ended

31 December 2023. This letter

provides a summary of the work

completed by the Remuneration

Committee (the “Committee”)

in the year, including the major

decisions taken, details of how the

approved Directors’ Remuneration

Policy was implemented during

the year, and the proposed new

Policy being put to shareholders

at the 2024 AGM.

Hunting PLC Annual Report and Accounts 2023 131Strategic Report Corporate Governance Financial Statements Other Information

Strategic Report

Remuneration Committee Report continued

Hunting’s businesses are mostly based in North

America. For perspective, over 70% of the

revenue and EBITDA are attributed to, and over

70% the workforce, including the majority of the

senior leadership team are located in the United

States. We think it is critical that the Company’s

Chief Executive remains located in the centre of

activity for the global energy industry in the US

where the majority of both our peer companies

and customers are also based.

As highlighted in my letter last year, recent

remuneration reviews conducted by the

Committee have highlighted a signicant

misalignment between Hunting’s current

approach and the approach to remuneration

taken by its US competitors for senior talent.

The new Policy seeks to increase alignment with

the compensation practices in this important

region, given that the ability to attract executive

talent remains a key priority of the Board. The

Hunting 2030 Strategy included a number of

ambitious and stretching nancial targets, and

the Remuneration Committee recognises that

the new Policy needs to fairly reect the new

strategic commitments to be delivered by

management to meet the growth objectives

of the Company.

In developing the proposals, the Committee

consulted with all of Hunting’s major shareholders,

a process which began in July 2023 and which

progressed throughout the second half of the

year. The Committee wishes to thank those

shareholders who have engaged constructively

and had a signicant role in shaping the

proposals. We look forward to receiving strong

support for the new Policy at the 2024 AGM.

Major decisions made

by the Committee

Base salary and fee review

The base salaries of the executive Directors

remained unchanged during 2023.

As part of the wider considerations for the new

Directors’ Remuneration Policy to be put to

shareholders at the 2024 AGM, the Remuneration

Committee will review the base salaries for the

Chief Executive and the Finance Director in April

2024. Full details are noted below.

The Board met in December 2023 to review the

annual fees of the non-executive Directors and,

following discussion, it was determined that the

annual fees of the non-executive Directors should

remain unchanged at £64,000. From 1 January

2024, the Board agreed to increase the additional

fees paid to all the Committee Chairs and Senior

Independent Director to £11,000 per annum

in recognition of the added workload and

responsibilities associated with these roles

over the past three years.

In addition, the Committee discussed the annual

fee of Hunting’s non-executive Company Chair

in December 2023 and, following receipt of

benchmarked fee data from Mercer, determined

that the fee for the Company Chair should be

increased from £205,000 to £225,000 p.a., also

with effect from 1 January 2024.

Annual bonus

In December 2022, the Committee reviewed the

2023 Annual Budget targets, which focused on

increased protability and returns, and which

reected a further strengthening in the Company’s

core energy markets.

In January 2024, the Committee was pleased

to review the nancial outturn for 2023, which

included marked improvements in pre-tax

protability and positive returns on capital

employed, reecting the strong performance

throughout the Group and especially within the

OCTG, Subsea and Advanced Manufacturing

product lines. As a result of this performance,

a vesting of 72.5% of the maximum opportunity

of 80% for the nancial portion of the Annual

Bonus was recorded.

The Committee met in January and February

2024 to review the delivery of the executive

Directors’ strategic/personal performance

objectives. In-line with the outcome of the

nancial bonus targets, the Committee noted

the strong delivery of the objectives set at the

start of the year, including delivery of the Hunting

2030 Strategy, which was presented to investors

at a Capital Markets Day held at the London

Stock Exchange in September 2023. Following

discussion, the Committee agreed that the

executive Directors had exceeded most of these

objectives and, therefore, were awarded a

vesting of 18% of the maximum of 20% of this

portion of the Annual Bonus.

The Committee noted that the threshold targets

set at the start of the year had been exceeded,

leading to a 90.5% total vesting of the maximum

annual bonus opportunity for the executive

Directors. The Committee satised itself with the

overall Annual Bonus outcome, which resulted

in an Annual Bonus of $1,467k receivable in the

year for the Chief Executive and $536k receivable

for the Finance Director.

The 2023 Annual Bonus will be delivered in

cash, with 25% of the post-tax cash bonus to

be utilised to purchase Ordinary shares of the

Company, which are to be held for two years

from the vesting date, in-line with the usual

operation of the Annual Bonus Plan.

HPSP award grant

In March 2023, the Committee granted awards

under the Hunting Performance Share Plan. As

part of its discussions, and in-line with the

shareholder approved Directors’ Remuneration

Policy, the Committee retained the Free Cash

Flow performance condition for the 2023 award,

alongside the Return on Average Capital

Employed (“ROCE”), adjusted diluted Earnings

per Share (“EPS”), relative Total Shareholder

Return (“TSR”), and Strategic Scorecard

performance conditions. The Committee

considers that these metrics continue to provide

a balance of performance targets for the

executive Directors to achieve. The awards

encourage a good balance between earnings

and cash generation growth.

Hunting PLC Annual Report and Accounts 2023 132Strategic Report Corporate Governance Financial Statements Other Information

Activities undertaken by the Remuneration Committee during 2023

Jan Feb Apr Jun Aug Oct Dec

Overall remuneration

Annual base salary review •

Review senior management annual emoluments •

Review total remuneration against benchmarked data • • • • • •

Shareholder and proxy group feedback on new Policy • • •

Items specic to the annual bonus

Approve annual bonus including delivery

of personal/strategic performance targets •

Review Annual Bonus Plan rules •

Agree strategic/personal performance

targets for year ahead •

Items specic to long-term incentives

Approve HPSP vesting and new annual grant •

Review HPSP performance conditions • •

Review HPSP grant performance targets • • •

Governance and other matters

Approve Annual Report on Remuneration •

Review and approve Remuneration Policy (if required) •

Review governance voting reports •

Review AGM proxy votes received for Annual Report on

Remuneration and Policy •

Review Committee effectiveness •

Review terms of reference •

Remuneration Committee Report continued

HPSP awards vesting

The 2021 awards under the HPSP are due to

vest on 4 March 2024 and incorporate four

performance conditions, being ROCE (35%),

adjusted diluted EPS (25%), relative TSR (25%)

and a Strategic Scorecard (15%). The ROCE and

EPS performance conditions were based on

performance targets to be delivered for the

nancial year ending 31 December 2023. The

Strategic Scorecard comprises two non-nancial

measures, being the Group’s Safety and Quality

performance.

Given the low share price in 2021, due to

a subdued energy market, the Committee

reduced the face value of the award by 22%

at the time of grant to mitigate the risk of

a windfall gain occurring.

Following measurement of the nancial elements

of the award, the ROCE and EPS performance

conditions for the 2021 awards recorded a 12.7%

and 6.5% vesting respectively of the maximum

vesting opportunity.

The TSR performance condition was measured

independently by Mercer and recorded a “Below

Median” ranking against the 13 peer group

comparators. This led to a nil vesting of this

portion of the 2021 award.

The Strategic Scorecard recorded a 15%

vesting in-line with the operation of the Policy,

and given that the nancial targets had been

met, the Committee approved a full vesting

of the Scorecard.

The Committee satised itself that there were no

circumstances justifying the application of any

discretion and therefore the overall vesting of the

2021 HPSP grant was 34.2% of the maximum

vesting opportunity.

2023 AGM result

At the Company’s AGM held on 19 April 2023,

the Company received 88% votes in favour of the

resolution to approve the 2022 Annual Report on

Remuneration.

Context of remuneration awarded in 2023

The Group’s performance in the year, as noted

above, has led to a 90.5% vesting of the Annual

Bonus opportunity and a 34.2% vesting of the

2021 HPSP grant. The Annual Bonus outcome

reects an “Above Target” outcome, reecting

strong in-year performance, while the HPSP

vesting reects an “Above Threshold” vesting

given the Company’s nancial performance over

the three-year vesting cycle.

The single gure total remuneration for Jim

Johnson was, therefore, $3.5m in 2023 and

$1.2m for Bruce Ferguson.

The 2022 restated single gure total for Jim

Johnson was $2.7m and for Bruce Ferguson

was $1.0m, following nal determination of the

2020 HPSP vesting values.

The Committee is satised that total pay

outcomes are appropriate in the context of

Group performance across the periods covered

by these short- and long-term incentives.

Hunting PLC Annual Report and Accounts 2023 133Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

2024 Directors’

Remuneration Policy

As noted above, the location of Hunting’s Chief

Executive has been in Houston, Texas since

2001 and, during this time, the Committee has

sought to strike an appropriate balance between

the compensation frameworks adopted by

Hunting’s closest trading peers within the quoted

oileld services sector in the US so as to ensure

that the Policy is capable of meeting the Board’s

future recruitment and retention needs, and the

governance expectations of the Company’s

mainly UK-based shareholders.

The Committee’s most recent review highlighted

that the balance struck by the current Policy was

no longer sufciently aligned with practices

among our peers or with the pay arrangements

of Hunting’s wider workforce. In particular, the

overwhelming majority of Hunting’s direct trading

peers now grant a mix of restricted stock units

(“RSUs”) and performance stock units (“PSUs”).

Pay levels amongst our direct trading peers in the

US are also higher. The Committee believes this

to be a material recruitment risk to the Group as it

seeks to implement the Hunting 2030 Strategy.

Within Hunting, the Chief Executive and Finance

Director are the only mid-level and senior

executives who do not currently receive awards

of RSUs. Therefore, the Committee is also

seeking to increase consistency within the

Company’s remuneration framework as part

of the new Policy.

The Committee has engaged with its largest

shareholders extensively since June 2023 on

proposals to introduce a RSU element.

The feedback received, which related to the

quantum, choice and weighting of long-term

performance metrics and shareholding

requirements, has materially inuenced the nal

proposals, with further amendments being made

to the proposals following wider shareholder

engagement throughout Q4 2023 and Q1 2024.

As part of this engagement, proxy voting groups

were also consulted, with feedback being

incorporated into the nal proposals, which were

communicated to shareholders in January 2024,

to conrm support or otherwise to the

Committee’s thinking.

The majority of shareholders consulted have

indicated they are supportive of the proposals

given Hunting’s North America business prole,

including revenue, prots, people and facilities

which is fairly unique to the UK listed environment.

The principal changes to the existing Policy being

proposed are as follows:

• the maximum PSU award level will be reduced

from 450% to 350% of salary for the Chief

Executive and from 210% to 160% of salary

for the Finance Director;

• a new RSU element will be introduced with

an annual award level of 100% of salary for

the Chief Executive and 50% of salary for the

Finance Director. RSU awards will normally

vest three years after grant subject to an

underpin based on the Committee’s

assessment of underlying performance

against a range of objective factors; and

• the post-cessation shareholding requirement,

which currently applies to shares worth up

to 200% of salary to be held for one year

following the end of employment, will be

extended to two years following the adoption

of the new Policy.

The overall impact of these changes will be to

increase alignment with shareholders through

the acquisition and holding of shares and

greater alignment between the remuneration

arrangements of the executive Directors and their

relevant labour markets as well as those of the

workforce. The maximum opportunity of the

long-term incentive will remain unchanged at the

levels awarded since 2013, being 450% of base

salary in aggregate to the Chief Executive and

210% to the Finance Director, while ensuring

that target levels of remuneration are positioned

competitively against our peers.

A number of shareholders, as part of the

feedback received, requested that the balance

of the performance conditions be increased for

ROCE and TSR to ensure the executive Directors

remained focused on delivering growth in the

Company’s enterprise value. Following this

feedback, the Committee have approved an

increase in the weighting attached to these

measures for 2024.

In addition, the Committee has reviewed the

salaries of the Chief Executive and the Finance

Director for 2024 and, subject to the new Policy

being approved, intends to implement a one-off

adjustment by awarding base salary increases

of 3.5% over the average of the workforce (an

average increase of 5.0% was awarded in

January 2024 to the workforce).

This increase is also in-line with increases being

awarded to other high performing employees at

Hunting whose remuneration is below the market

level. Following these one-off adjustments, both

executive Directors’ remuneration will be

positioned around median and, therefore, it is

anticipated that future increases will be no higher

than the average awarded to the workforce.

The Committee and Board welcome the

support to the new Policy by those shareholders

consulted since June 2023 and look to the

support of all stakeholder groups to ensure the

Company has the right compensation framework

going forward.

On behalf of the Board

Annell Bay

Chair of the Remuneration Committee

29 February 2024

Hunting PLC Annual Report and Accounts 2023 134Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Remuneration at a glance

Remuneration paid to the executive Directors in the year was

consistent with the 2021 Directors’ Remuneration Policy. Base salaries

were unchanged throughout 2023, given that increases were

implemented in December 2022. The 2023 Annual Bonus has vested

at 90.5% of the maximum bonus opportunity, which reected an

“Above Target” performance compared to the Annual Budget

approved by the Directors at the start of 2023. The awards under the

Hunting Performance Share Plan granted in 2021 are due to vest in

March 2024, with a vesting outcome of 34.2%, which reects an

“Above Threshold” outcome.

Remuneration Policy and 2023 AGM result

The remuneration framework operated in the

year was consistent with the Policy approved by

shareholders on 21 April 2021, with 92% of votes

in favour. Details of the Policy can be found within

the 2020 Annual Report and Accounts at

www.huntingplc.com.

At the 2023 Annual General Meeting of the

Company on 19 April 2023, the resolution

to approve the 2022 Annual Report on

Remuneration was supported by a vote of

88% in favour.

Link to strategy and KPIs

The Group’s Key Performance Indicators (“KPIs”)

are described in detail on pages 12 and 13, and

incorporate nancial measures including adjusted

prot before tax, return on average capital

employed (“ROCE”) and adjusted diluted

earnings per share (“EPS”) targets. Non-nancial

measures are also included in the targets for

HPSP awards and include measurable objectives

related to the Group’s Quality and Safety

performance. Quality and Safety both underpin

Hunting’s standing and reputation in the global

energy industry which, in turn, support the

Group’s long-term strategy. A signicant TSR

element also helps align executive remuneration

with the shareholder experience. These KPIs are

central to Hunting’s long-term success and are

fully integrated into the remuneration framework

approved by shareholders.

Adjusted prot before tax

$50.0m

(2022 – $10.2m)

Return on average capital employed

6.45%

(2022 – 1.45%)

Safety (Total recordable incident rate three-

year average)

0.96

(2022 – 0.88)

Adjusted diluted earnings per share

$20.3cents

(2022 – $4.7 cents)

Total shareholder return (1-year)

(8.6)%

(2022 – 102%)

Quality assurance (Internal manufacturing

reject rate three-year average)

0.15%

(2022 – 0.17%)

Performance metrics

Total shareholder return

(rebased to 100 at 31 December 2013)

Hunting PLC

DJ US Oil Equipment & Services

31/12/13 31/12/15

31/12/17

31/12/19 31/12/21 31/12/23

150

125

100

Hunting PLC Annual Report and Accounts 2023 135Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Remuneration at a glance continued

As noted in the 2022 Annual Report on

Remuneration, base salary increases were

implemented across the Group on 1 December

2022, with no adjustments being made in 2023.

Jim Johnson’s base salary was, therefore,

$810,338 in the year and Bruce Ferguson’s base

salary was £317,625.

Base Salaries

Arthur James (Jim) Johnson

Chief Executive

$810,338

(2022 – $774,966)

$1,467k

(2022 – $1,550k)

259,14 4

(2022 – 48,990 shares)

Bruce Ferguson

Finance Director

£317,6 25

(2022 – £303,760)

£431k

(2022 – £456k)

58,893

(2022 – 6,827 shares)

Annual Bonus

Hunting

Performance

Share Plan

In 2023, the nancial targets set by the Board

within the Annual Budget were exceeded, with

strong increases in pre-tax prot and average

return on capital employed being recorded. The

Committee also reviewed the delivery of the

strategic/personal performance objectives by the

executive Directors. Overall, a 90.5% vesting of

the annual bonus opportunity was recorded.

On this basis, Jim Johnson will receive a bonus

of $1,467k and Bruce Ferguson will receive a

bonus of £431k ($536k).

The annual bonus will be delivered in cash, as

per the normal operation of the Annual Bonus

Plan, with 25% of the post-tax bonus to be

utilised to purchase Ordinary shares, to be

retained for two years from the vesting date.

The Group’s 2021 HPSP grant’s performance

conditions incorporated ROCE and adjusted

diluted EPS, measured for the year ended 31

December 2023, and relative TSR and Strategic

Scorecard, measured over the three nancial

years ending 31 December 2023.

Recorded

performance Vesting

ROCE 6.45% 12.7%

Adjusted diluted EPS 20.3 cents 6.5%

Relative TSR Below median nil

Balanced Scorecard

– Safety 0.96 7.5%

– Quality 0.15% 7.5%

Following measurement of the above

performance conditions, the 2021 HPSP grant

will vest at 34.2%.

Jim Johnson will be entitled to receive 259,144

Ordinary shares and Bruce Ferguson will be

entitled to receive 58,893 Ordinary shares on

the vesting date of 4 March 2024.

Dividend equivalents accrued over the vesting

period totalling 26.0 cents per vested share will

be added to this award.

Hunting PLC Annual Report and Accounts 2023 136Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Remuneration at a glance continued

Directors’ Remuneration Policy

Policy overview

This section sets out the new Directors’ Remuneration Policy (the “Policy”) applicable to Hunting’s

executive and non-executive Directors, which, if approved by shareholders at the Annual General

Meeting (“AGM”) to be held on 17 April 2024, will be applied with effect from 1 January 2024. Updates

to the Policy have also been made to align it with the rules of the 2024 Hunting Performance Share

Plan, which is being submitted to shareholders for their approval at the 2024 AGM. The Policy is

designed to take account of the principles of the 2018 UK Corporate Governance Code and the

Companies Act 2006 regarding remuneration. It has been designed to promote the strategy and

long-term sustainable success of the Company by ensuring that rewards are competitive within the

relevant market for talent and comprise xed and variable incentives that link total reward with

corporate and individual performance as well as shareholder value creation.

Executive Director pay is overseen by the Remuneration Committee. The Chief Executive’s

remuneration is benchmarked against global peers, the majority of which are headquartered or

listed in the US, and who are of a similar prole and size to Hunting. The Finance Director’s

remuneration is benchmarked against UK listed companies of a similar size. Non-executive Director

fees are set at levels that take into account the time commitment and responsibilities of each role.

Given the international scope of the business, each non-executive Director is required to give an

above average time commitment to Group matters. Non-executive Directors do not receive bonuses

or other variable emoluments. The fees are benchmarked against other UK companies of a similar

size, prole and protability and are reviewed annually by the Board. The Company Chair fee is set by

the Remuneration Committee. The Remuneration Policy tables that follow provide an overview of each

element of the Directors’ Remuneration Policy. As no Director is involved in the setting of their own

pay, this mitigates conicts of interest as required by the relevant regulations.

Executive Directors’ single gure remuneration

Jim Johnson – total $3,466k (2022 – $2,710k)

2023

2022

982 1,550 178

1,019 1,467 980

Fixed

Annual Bonus

HPSP

Bruce Ferguson – total $1,218k (2022 – $1,021k)

2023

2022

435 561 25

459 536 223

Fixed

Annual Bonus

HPSP

Hunting PLC Annual Report and Accounts 2023 137Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Executive Director Remuneration Policy Table

Fixed emoluments

PURPOSE AND LINK

TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS

CHANGES TO POLICY

PROPOSED

Base salary

• To attract, retain and

reward executives with

the necessary skills to

effectively deliver the

Company strategy.

• Base salaries are set at competitive rates, which

take into account the individual’s country of

residence and primary operating location as well

as pay for similar roles in comparable companies.

• Aimed at the market mid-point.

• Annual increases take into account Company

performance, ination in the UK and US and

increases across the wider workforce.

• Relocation and tax equalisation agreements are

also in place for employees working across

multiple geographic jurisdictions.

• There is no prescribed

maximum annual increase.

Increases will normally be

guided by the general

increase for the broader

employee population, but

on occasions may need to

recognise, for example,

development in role, change

in responsibility, and/or

specic retention issues.

• Individual and Group performance are taken into

account when determining appropriate salaries.

• None.

401k and tax-deferred saving plans (US-based roles)

• To provide a tax

efcient long-term

savings arrangement for

US-based Directors.

• The Group provides matching contributions

(subject to limitations) to a US qualied 401K

deferred savings plan and an additional non-

qualied tax-deferred savings plan as allowed

under US tax laws to US-based executive

Directors (“EDs”).

• The Company previously

agreed to grandfather the

incumbent Chief Executive’s

original 401k and deferred

compensation arrangements.

• Any future executive Director

appointees in the US will have

a contribution cap set at the

same level offered to the

wider workforce.

• None. • Maximum company

contributions into the

401k and tax-deferred

compensation

arrangements of new

US EDs will be

capped at the same

level offered to the

wider US workforce.

Previously, new US

executive Director

contributions would

be capped at 12%

of salary.

Hunting PLC Annual Report and Accounts 2023 138Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

PURPOSE AND LINK

TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS

CHANGES TO POLICY

PROPOSED

Pension (roles based outside of the US)

• To provide normal

pension schemes

appropriate to the country

of residence.

• Company contribution or an annual cash sum in

lieu of contributions to a company pension scheme.

• The Finance Director currently elects to receive a

cash sum.

• Equivalent arrangements would be offered to any

future executive Director based outside of the UK

or US.

• UK executive Directors

receive a company pension

contribution or cash

alternative of up to 12% of

salary, in-line with the rest

of the UK workforce.

• None. • None.

Benets

• To provide standard

benets appropriate to the

country of residence.

• Each executive Director is provided with

healthcare insurance and a company car with fuel

benets or allowance in lieu.

• Additional benets may be provided to ensure the

Group remains competitive within the relevant

local market and/or where these are introduced

to the wider workforce.

• There is no maximum value

set on benets. They are set

at a level that is comparable

to market practice.

• None. • Updated to allow for

the introduction of

new benets provided

these have also been

introduced to the

wider workforce.

Executive Director Remuneration Policy Table continued

Fixed emoluments continued

Hunting PLC Annual Report and Accounts 2023 139Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Executive Director Remuneration Policy Table continued

Variable emoluments

PURPOSE AND LINK

TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS

CHANGES TO POLICY

PROPOSED

Annual bonus

• To incentivise annual

delivery of nancial and

operational targets.

• To provide high reward

potential for exceeding

demanding targets.

• At least 25% of any after-tax Annual Bonus must

be used to acquire shares in Hunting. These

shares are required to be held for two years.

• Malus and clawback provisions are incorporated

and allow the Committee to reduce the bonus,

potentially down to zero, in cases of material

nancial misstatement, calculation error, corporate

failure, gross misconduct or actions that cause

reputational damage to the Company.

• The Chief Executive and

Finance Director have a

maximum opportunity of

200% and 150% of salary,

respectively.

• For an on-target performance,

50% of the maximum

opportunity will be paid.

• Typically, 80% of the Annual Bonus will be based on

nancial measures, with the remainder based on

strategic/personal performance measures, selected

annually by the Remuneration Committee to reect

key performance indicators for the year ahead.

• The vesting of the strategic/personal component is

normally subject to a nancial underpin. Should all

nancial targets not be met, a 50% vesting cap of

the strategic/personal component would normally

be implemented.

• Removal of the

requirement for bonus

threshold and

maximum targets to

be at 80% and 120%

of budget to enable

greater exibility in

target setting and

ensure appropriate

degree of stretch.

Long-term incentive plan

• To align the interests of

executives with

shareholders in growing

the value of the business

over the long term and

provide a competitive total

package that enables the

Company to compete for

talent in its key market of

the US.

• Awards of performance shares (“HPSP”) or

restricted shares (“HRSP”), may be granted in the

form of nil cost options or conditional awards to

eligible participants. The performance conditions

which apply to HPSP awards will normally be

measured over a period of at least three years.

• Awards normally vest three years after grant, and

retained post-tax in shares for up to two years.

• Vested awards granted from 2024 will normally

be subject to an additional holding period of two

years (subject to settlement of any tax charges

on vesting).

• Awards are subject to malus and clawback

provisions, for ve years from grant, which cover

cases of material nancial misstatement,

calculation error, gross misconduct actions that

cause reputational damage to the Company, or

corporate insolvency or failure.

• In respect of vested shares, participants are

eligible to receive an amount equivalent to

dividends paid by the Company during the vesting

period, (and where relevant, the post-vesting

holding period) once the nal vesting levels have

been determined, either in cash or shares. This

dividend equivalent payment may assume the

reinvestment of dividends in shares.

• In respect of any nancial year

of the Company:

– Chief Executive: HPSP up

to 350% and HRSP up to

100% of base salary.

– Finance Director: HPSP up

to 160% and HRSP up to

50% of base salary.

• HPSP awards will vest on achievement of nancial

and strategic performance targets, measured over

a performance period of three years. Financial

measures for HPSP awards will be aligned with the

strategy and, for 2024, will include measures such

as adjusted diluted EPS, FCF, and ROCE. A TSR

element will also be included. Strategic measures

may also be included and will not normally account

for more than 15% of each award.

• Achievement of threshold performance for HPSP

targets results in a 25% vesting.

• In the event that all of the nancial measures are not

met in respect of a HPSP grant, the vesting of the

Strategic Scorecard will be reduced by 50%.

• HRSP awards are subject to an underpin based on

the Committee’s assessment of the underlying

performance of the business over the performance

period having regard for a number of factors also

measured over three nancial years.

• The Committee has the ability to exercise discretion

to override the HPSP or HRSP outcome in

circumstances where strict application of the

performance conditions or underpin would produce

a result inconsistent with the Company’s

remuneration principles. Any upward discretion

would normally be subject to prior shareholder

consultation.

• Introduction of the

HRSP element and

a reduction in the

quantum of HPSP

awards.

Hunting PLC Annual Report and Accounts 2023 140Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

PURPOSE AND LINK

TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS

CHANGES TO POLICY

PROPOSED

Minimum stock ownership requirement

• To encourage the

retention of shares under

award to the executive

Directors.

• To align the long-term

interests of the Directors

with shareholders.

• Directors have ve years to achieve the required

holding level from the date of their appointment to

the Board.

• The Board has discretion to extend this time

period if warranted by individual circumstances.

• The target holding of the Chief

Executive is equal to a market

value of 500% of base salary

and for the Finance Director

200% of base salary.

• None. • None.

Post-employment shareholding requirement

• To align the long-term

interests of the executive

Directors with

shareholders for a period

after they have left the

Group.

• To incentivise good

succession planning.

• Directors are required to hold Hunting shares for

a period after stepping down as an executive

Director.

• The Committee will have discretion to reduce/

waive the requirement in exceptional

circumstances.

• Executive Directors must

continue to hold shares equal

to the lesser of their actual

holding on stepping down as

an executive Director and

200% of base salary, for a

minimum of 24 months.

• This requirement applies to

shares acquired under

incentives granted after the

2024 AGM.

• None. • Extension of holding

period from 12 to 24

months from the

date of cessation of

employment.

Executive Director Remuneration Policy Table continued

Variable emoluments continued

Hunting PLC Annual Report and Accounts 2023 141Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Non-executive Director Remuneration Policy Table

The remuneration of the non-executive Directors is designed to reect the time and commitment of each to their respective roles.

PURPOSE AND LINK

TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS

CHANGES TO POLICY

PROPOSED

Company Chair and non-executive Director fees

• To attract and retain

high-calibre non-executive

Directors by offering a

market competitive fee.

• Fees for the Company Chair and non-executive

Directors are determined by the Board as a whole,

following receipt of external fee information and an

assessment of the time commitment and

responsibilities involved.

• The Company Chair is paid a single consolidated

fee for his responsibilities including chairing the

Nomination Committee.

• The non-executive Directors are paid a basic fee.

• Directors may be paid an additional fee to reect

their responsibilities — for example Directors who

chair the Board’s Audit, Ethics and Sustainability

and Remuneration Committees and the Senior

Independent Director.

• The non-executive Directors and Company Chair

do not participate in the Group’s share plans and

do not receive a cash bonus or any other benets.

Any travel or hospitality costs (including any tax

thereon) related to the performance of their duties

may be reimbursed by the Company.

• Fees paid to the non-

executive Directors are

benchmarked against other

UK companies of a similar

size and prole to the Group.

• The aggregate maximum fees

for all non-executive Directors,

including the Company Chair,

within the Company’s Articles

of Association are £750,000.

• None. • None.

Minimum stock ownership requirements

• To align the non-executive

Directors’ interests with

the long-term interests

of shareholders.

• Non-executive Directors are required to build up a

holding of shares in the Company and have ve

years to achieve the required holding level from

the date of their appointment to the Board.

• The target holding for

the Company Chair and

non-executive Directors

is equal to 100% of the

annual fee.

• None. • None.

Hunting PLC Annual Report and Accounts 2023 142Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Detailed Policy

Amendments to the Policy

The oil and gas industry remains a competitive marketplace, therefore recruiting and retaining the

right individuals to deliver long-term shareholder growth is a key focus of management and the

Remuneration Committee. It is anticipated that recruitment and retention will remain a challenge

for the sector and, therefore, the Committee will continue to keep the Policy under review, and will

make any necessary revisions after appropriate consultation and approval from shareholders has

been received.

Remuneration Committee discretion

The Committee has dened areas of discretion within the Directors’ Remuneration Policy. Where

discretion is applied, the Committee will disclose the rationale for the application of discretion. The

Committee will operate the Annual Bonus Plan, HPSP and HRSP in accordance with the relevant

plan rules and this Policy. The Committee retains discretion as to the operation and administration

of these plans in a number of areas, including:

• selecting the participants in the incentive plans on an annual basis;

• determining the timing of grants of awards and/or payments;

• determining the quantum of awards and/or payments (within the limits set out in the Policy table

on pages 138 to 142);

• reviewing performance against any performance targets;

• determining the extent of vesting based on the assessment of performance and to adjust the

amount of any incentive pay-out to reect any fact or circumstance that the Committee considers

to be relevant, and to ensure that the outcome is a fair reection of performance;

• making the appropriate adjustments required in certain circumstances, for instance for changes

in capital structure;

• determining “Good Leaver” status for incentive plan purposes, including assessing part-year

performance for bonus awards and applying the appropriate treatment; and

• undertaking the annual review of weighting of performance measures and setting targets for the

incentive plans, where applicable, from year-to-year.

If an event occurs that results in the Annual Bonus Plan or LTIP performance conditions and/or targets

being deemed no longer appropriate (e.g. material change acquisition or divestment), the Committee

will have the ability to adjust appropriately the measures, peer groups and/or targets and alter

weightings, provided that the revised conditions are not materially less challenging than the original

conditions. In addition, the oil and gas industry is a highly cyclical industry, where sentiment is driven

by oil and gas commodity prices and activity levels across the industry. Given that these market

conditions are outside management’s control, the Committee retains the discretion to partially adjust

the performance targets of the performance conditions adopted for the HPSP to align with the general

market outlook, while continuing to be a demanding and stretching incentive. Any upward discretion

would be subject to prior shareholder consultation.

Other

The Committee reserves the right to honour any remuneration commitments (including exercising

any discretions available to it in connection with such payments) that are not in-line with the Policy

outlined above, where the terms of the payment were agreed either (i) before the Policy came into

effect; or (ii) at a time when the relevant individual was not a Director of the Company and, in the

opinion of the Committee, the payment was not in consideration for the individual becoming a

Director of the Company.

The Committee may also make any payments that it is required to make as a result of its statutory

obligations or by way of settlement for any claim of breach of a director’s legal entitlements.

Choice of performance metrics

The corporate strategy includes promoting the long-term success of the Group by investing in its

existing products and services portfolio through capital investment or by acquisition and growing the

business in a way that is aligned with the evolving global energy industry. In 2024, it is intended that

the performance of the executive Directors in executing this strategy will be evaluated using a number

of key performance indicators (“KPIs”) shown in the table below, which drive the variable components

of the executive Directors’ emoluments. The HPSP performance conditions and growth targets can

be amended by the Remuneration Committee over the life of the Policy, with the targets set annually

when each award is granted, following an assessment of the growth prospects of the Group. Taken

together, the Committee believes that the executive Directors are appropriately incentivised to deliver

both short- and long-term performance based on these metrics.

Performance metrics Variable incentive Rationale

Adjusted prot

before tax (“PBT”)

Annual Bonus Adjusted PBT is a management KPI used to measure the

performance of the Group. Adjusted PBT reects the

achievements of the Group in a given nancial year and

recognises sustained protability measured against an

agreed Annual Budget.

Return on average

capital employed

(“ROCE”)

Annual Bonus/

HPSP

ROCE is a management KPI used to measure the

performance of the Group. ROCE reects the value

created on funds invested in the short and medium term.

Total shareholder

return (“TSR”)

HPSP TSR reects the Group’s long-term goal to achieve

superior levels of shareholder return.

Adjusted diluted

earnings per share

(“EPS”)

HPSP To encourage sustained levels of earnings growth over the

long term.

Free cash ow

(“FCF”)

HPSP To encourage sustained levels of cash generation to fund

growth and shareholder distributions.

Strategic/personal

objectives

Annual Bonus/

HPSP

To capture and incentivise delivery of key strategic

milestones that contribute to long-term success.

Underlying Group

performance

HRSP Ensures that executives are not rewarded where the

underlying performance of the Company is not satisfactory.

Hunting PLC Annual Report and Accounts 2023 143Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Relevance to employee pay

The Policy table on pages 138 to 142 summarises the remuneration structure that operates for

executive Directors within Hunting and which also applies to senior executives of the Group. While

bonus and pension arrangements are in place for most of the Group’s employees, lower aggregate

remuneration operates below the executive Director and senior manager level, with total remuneration

driven by market comparatives and the individual responsibilities of each role.

Executive Director service contracts

All existing executive Directors’ service contracts are rolling one-year agreements and contain

standard provisions allowing the Company to terminate summarily for cause, such as gross

misconduct. The service contracts can be reviewed at the Company’s registered ofce, on request

by a shareholder.

Jim Johnson and Bruce Ferguson entered into service contracts with the Company on

7 December 2017 and 2 June 2020, respectively. Under the terms of these service contracts,

both the Company and the Directors are required to give one year’s notice of termination. Messrs

Johnson and Ferguson are entitled to receive a Performance Bonus on an annual basis, the quantum

being determined by the Remuneration Committee. Messrs Johnson and Ferguson are also eligible

to participate in the Hunting Performance Share Plan and any other long-term incentive schemes

operated by the Company. Under the terms of their service contracts, benets may include the

provision of a company car and fuel benets or allowance in lieu, long-term disability and healthcare

benets offered by the Company, as well as participation in pension schemes operated by the

Company. Following a change of control, in-line with standard UK practice, all stock options and

stock-based awards granted will be tested for performance and pro-rated for time unless the

Committee, acting fairly, decides otherwise.

Non-executive Director letters of appointment

On appointment, each non-executive Director is provided with a letter of appointment, which is

retained by the Company Secretary at Hunting PLC’s registered head ofce, that sets out the

responsibilities and time commitments for the role. Additional duties, as requested by the Nomination

Committee, including chairing a Board Committee, are also incorporated into the letters of

appointment and fees paid. Non-executive Director appointments are usually for a xed three-year

term, which can be terminated by either party at any time.

External board appointments

The Company may authorise an executive Director to undertake a non-executive directorship outside

of the Group provided it does not interfere with their primary duties. During the year, neither executive

Director held any external positions.

Payment for loss of ofce

The Committee has considered the Company’s policy on remuneration for executive Directors leaving

the Company and is committed to applying an approach consistent with best practice to ensure that

the Company pays no more than is necessary. In-line with normal market practice, the policy

distinguishes between “Good Leavers” and “Bad Leavers”. A “Good Leaver” is dened as an

employee who has ceased to be employed by the Group due to death, ill-health, injury, disability,

redundancy, retirement, the employee’s employing company or business ceasing to be part of the

Group, or for any other reason if the Committee so decides. In the case of a “Good Leaver”, taking

account of local conditions, the Policy normally allows:

• payment in lieu of notice equal to 12 months’ base salary, pension contributions, contractual

benets and any other legal entitlements; and

• payment of a bonus for the period worked taking into account the achievement of the relevant

performance conditions which may be delivered in such proportions of cash and shares, and

subject to such deferral arrangements, as the Committee may determine; and any unvested

long-term incentives that vest at the normal time taking into account the achievement of the relevant

performance conditions and any other relevant factors, and will, unless the Committee determines

otherwise, be pro-rated by reference to the performance period applicable to the award which has

elapsed. If an executive Director dies (or any other exceptional circumstances), awards will vest at

the time the executive Director ceases to be a Director on the same basis as set out above for other

“Good Leavers”.

The Company may also provide assistance with any reasonable legal costs and a contribution

towards outplacement services. If an executive Director departs the Group for any other reason,

no bonus would be payable and their unvested long-term incentives would lapse immediately on

cessation of employment.

Corporate events

If there is a change of control of the Company, HPSP and HRSP awards will normally vest early.

The extent to which awards vest in these circumstances will be determined by the Remuneration

Committee, taking into account the extent to which the performance conditions have been satised,

the underlying performance of the Company and the participant, any other relevant factors and,

unless the Remuneration Committee determines otherwise, the proportion of the performance

period that has elapsed. If other corporate events affect the Company such as a demerger, the

Remuneration Committee may decide that awards vest on the same basis as for a change of

control of the Company.

Consideration of employment conditions elsewhere in the Group

The Committee considers the general basic salary increases for the broader workforce when

determining the annual salary increases for the executive Directors. Employees have not been

consulted in respect of the design of the Company’s senior executive remuneration policy.

Hunting PLC Annual Report and Accounts 2023 144Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Directors’ Remuneration Policy continued

Shareholder consultation and feedback

When determining remuneration, the Committee takes into account views of leading shareholders

and best practice guidelines issued by institutional shareholder bodies. The Committee is always

available for feedback from shareholders on the remuneration policy and arrangements, and will

undertake a consultation with our largest shareholders in advance of any signicant future changes

to the remuneration policy. The Committee will continue to monitor trends and developments in

corporate governance and market practice to ensure the structure of executive remuneration remains

appropriate.

New Director policies

As the Board of Hunting is refreshed with new executive and non-executive Director appointments,

the Policy for remuneration for the new Board members will align with those detailed above. Hunting

needs to be able to attract and retain the best executive and non-executive Directors in the market

place. The Remuneration Committee believes that the Policy will enable the Company to achieve its

recruitment aims.

For executive Director appointments, the xed component of total emoluments will target the market

mid-point, subject to geographic considerations of the candidate and relevant labour market

practices. Where new appointees have initial base salaries set below market, any shortfall may be

managed with phased increases, normally, over a period of two to three years, subject to the

individual’s development and performance in the role. The service contracts will be rolling one-year

agreements with standard provisions. Fixed pay will comprise base salary, including any appropriate

relocation or tax equalisation agreements, benets (including healthcare insurance, pension

contributions, and car benets) and any other components deemed necessary to secure an

appointment. Variable pay will be in-line with the policies above, subject to any future amendments

to these arrangements being approved by shareholders. Any specic change of control provisions

within new service contracts would be consistent with UK market norms.

In addition, for new appointees, the Committee may offer additional cash and/or share-based

elements when it considers these to be in the best interests of the Company and shareholders. Any

such payments would take account of remuneration relinquished when leaving the former employer

and would be structured to take account of the nature, time horizons and performance requirements

attaching to that remuneration. Shareholders will be informed of any such payments at the time

of appointment.

For non-executive Director appointments, the benchmarked fees against companies of similar size

and prole to Hunting will be applied.

Remuneration scenarios for executive Directors

The remuneration scenarios of the executive Directors for a xed, target and maximum performance

are presented in the charts below, based on the proposed 2024 Directors’ Remuneration Policy.

Chief Executive

Fixed Target Maximum Maximum

Stretch

$1,057k

100% 24% 16% 12%

21%

35%

20%

26%

45%

13%

20%

53%

15%

$4,354k

$6,772k

$8,750k

3,000

2,000

1,000

5,000

4,000

6,000

9,000

8,000

7,000

Finance Director

Fixed Target Maximum Maximum

Stretch

$508k

100%

39%

24% 20%

25%

27%

32%

34%

10%

26%

41%

13%

$1,298k

$2,088k

$2,549k

1,000

500

1,500

2,000

3,000

2,500

Total Fixed Annual Bonus HPSP HRSP

Assumptions made for each scenario are as follows:

• Fixed: latest salary, benets and normal pension contributions or payments in lieu of pension

contributions;

• Target: xed remuneration plus half of maximum annual cash bonus opportunity plus 50% vesting

of awards under the HPSP plus 100% vesting of awards under the HRSP;

• Maximum: xed remuneration plus maximum annual cash bonus opportunity plus 100% vesting

of all long-term incentives;

• Maximum Stretch: including the impact of a hypothetical 50% increase in share price on the value

of the HPSP and HRSP in accordance with the reporting regulations; and

• The Finance Director is paid in Sterling and the equivalent total remuneration scenarios are as

follows – xed £399k; target £1,020k, maximum £1,640k and maximum stretch of £2,002k.

On behalf of the Board

Annell Bay

Chair of the Remuneration Committee

29 February 2024

Hunting PLC Annual Report and Accounts 2023 145Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration

Introduction

The principles set out in the 2021 Directors’ Remuneration Policy (the “Policy”) have been applied

throughout the year.

Compliance statement

The Directors’ Remuneration Policy and the 2023 Annual Report on Remuneration reect the

Remuneration Committee’s reporting requirements under the amended Companies Act 2006 and

the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008

(as amended), the Shareholder Rights Directive II, as enacted on 10 June 2019 and also the 2018

UK Corporate Governance Code, which became effective for the Company from 1 January 2019.

The 2023 Annual Report on Remuneration, which includes the Letter from the Chair of the

Remuneration Committee, details how the approved Directors’ Remuneration Policy was applied

during 2023. This report was approved by the Remuneration Committee at its meeting on Monday

26 February 2024.

Role

The Committee is responsible for developing and implementing the Directors’ Remuneration Policy

and has direct oversight, of the remuneration of the executive Directors, Company Chair and

Company Secretary. The Company Chair and Chief Executive are consulted on proposals relating to

the remuneration of the Finance Director and designated senior management. Where appropriate, the

Company Chair and other Directors are invited by the Committee to attend meetings, but are not

present when their own remuneration is considered. The Committee also reviews and monitors the

remuneration framework of the Company’s Executive Committee and monitors base salary increases

across the Company’s workforce. The remuneration of the non-executive Directors is agreed by

the Board as a whole and follows the Articles of Association of the Company, which were last

approved by shareholders on 18 April 2018. The full scope of the role of the Committee is set out in

its Terms of Reference, which are reviewed annually, and can be found on the Group’s website at

www.huntingplc.com.

Membership and attendance

The Committee consists entirely of independent, non-executive Directors. Ms Bay, Ms Harris and

Messrs Brightman and Lough have relevant energy sector expertise, while Mrs Chesney has relevant

nancial expertise. Dr Amos has non-oil and gas expertise.

Ms Bay was appointed to the Committee on her appointment to the Board on 2 February 2015

and was appointed Committee Chair on 30 August 2018. The Nomination Committee has extended

Ms Bay’s term of appointment to the Company for one additional year to allow for appropriate

succession plans to be put in place and to oversee the nal implementation of a new Directors’

Remuneration Policy, to be approved by shareholders at the Company’s 2024 Annual General

Meeting (“AGM”) on 17 April 2024. Stuart Brightman was appointed by the Board and became

a member of the Committee on 3 January 2023.

On 10 January 2024, Margaret Amos was appointed as a new, independent, non-executive Director

and joined the Committee from this date. Further, the Company announced on 10 January 2024 that

Stuart Brightman will succeed Jay Glick as Company Chair. Mr Brightman will, therefore, step down

as a member of the Committee at the 2024 AGM.

The Committee met seven times during 2023 and attendance details are shown on page 131. On

29 February 2024, being the date of signing the accounts, the members of the Committee and their

unexpired terms of ofce were:

Director Latest appointment date

Unexpired term as at

29 February 2024

months

Margaret Amos 10 January 2024 34

Annell Bay 2 February 2024 11

Stuart Brightman 3 January 2023 22

Carol Chesney 23 April 2021 2

Paula Harris 20 April 2022 14

Keith Lough 23 April 2021 2

External advisers

Mercer and Pearl Meyer are engaged by the Committee to provide remuneration consultancy

services. Their appointments were subject to formal tenders and both companies are regarded

as independent, having been appointed by and acting under direction of the Committee. Mercer

is a signatory to the UK Remuneration Consultants’ Group Code of Conduct and provides UK

governance advice and compensation benchmarking, while Pearl Meyer provides US remuneration

data for consideration by the Committee. The total cost of advice to the Committee during the year

to 31 December 2023 was $300,553 (2022 – $136,613) and includes fees paid in respect of review

work in salary benchmarking, Policy review, share plans, and remuneration reporting disclosure

requirements. Fees are charged on a time basis for consultancy services received. Neither Mercer

nor Pearl Meyer have any other connection to the Company or any Director.

Shareholder voting at the 2023 AGM

At the Company’s AGM held in April 2023, the resolution to approve the Annual Report on

Remuneration received the following votes from shareholders:

Number of

votes cast

% of

votes cast

For 108,770,961 88.0

Against 14,855,627 12.0

Votes withheld

25,707 n/a

Total votes cast 123,652,295 100.0

i. A vote withheld is not a vote in law and is not included in the percentage for votes cast.

The 2021 Policy was last approved by shareholders at the AGM on 21 April 2021, receiving 92.0%

votes in favour. A new Policy is to be approved by shareholders at the 2024 AGM.

Hunting PLC Annual Report and Accounts 2023 146Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration continued

Single gure remuneration

Fixed Variable Total Remuneration

Base Salary

Pension Provision

Benet

iii

Sub Totals Annual Bonus HPSP Awards Sub Totals

2023

2022

(restated)2023 2022 2023 2022 2023 2022 2023 2022 2023

2022

2023

2022

(restated)

vii

2023

2022

(restated)

Executive Directors

Jim Johnson 810 775 137 139 72 68 1,019 982 1,467 1,550 980 178 2,447 1,728 3,466 2,710

Bruce Ferguson 395 374 47 44 17 17 459 435 536 561 223 25 759 586 1,218 1,021

Non-executive Directors

Annell Bay 92 86 – – – – 92 86 – – – – – – 92 86

Stuart Brightman 80 – – – – – 80 – – – – – – – 80 –

Carol Chesney 92 86 – – – – 92 86 – – – – – – 92 86

Jay Glick 255 227 – – – – 255 227 – – – – – – 255 227

Paula Harris (from 20.04.22) 80 52 – – – – 80 52 – – – – – – 80 52

Richard Hunting (to 20.04.22) – 22 – – – – – 22 – – – – – – – 22

Keith Lough 92 86 – – – – 92 86 – – – – – – 92 86

Totals 1,896 1,708 184 183 89 85 2,169 1,976 2,003 2,111 1,203 203 3,206 2,314 5,375 4,290

The remuneration of the Finance Director and non-executive Directors is determined in UK Sterling

£k

Fixed Variable Total Remuneration

Base Salary

Pension Provision

Benet

iii

Sub Totals Annual Bonus HPSP Awards Sub Totals

2023

2022

(restated)2023 2022 2023 2022 2023 2022 2023 2022 2023

2022

2023

2022

(restated)

vii

2023

2022

(restated)

Executive Directors

Bruce Ferguson 318 304 38 36 14 13 370 353 431 456 179 20 610 476 980 829

Non-executive Directors

Annell Bay 74 70 – – – – 74 70 – – – – – – 74 70

Stuart Brightman 64 – – – – – 64 – – – – – – – 64 –

Carol Chesney 74 70 – – – – 74 70 – – – – – – 74 70

Jay Glick 205 184 – – – – 205 184 – – – – – – 205 184

Paula Harris (from 20.04.22) 64 42 – – – – 64 42 – – – – – – 64 42

Richard Hunting (to 20.04.22) – 18 – – – – – 18 – – – – – – – 18

Keith Lough 74 70 – – – – 74 70 – – – – – – 74 70

i. There were no base salary increases awarded to the executive Directors in 2023, given that the last review by the Committee was completed in December 2022, where a 5% increase was implemented. In December 2023, the Committee received workforce salary proposals, to be

implemented in January 2024. Base salary increases for the executive Directors have been proposed as part of the new Directors’ Remuneration Policy and remain subject to shareholder approval. In January 2023, the base fee for the non-executive Directors was increased to £64,000.

ii. Mr Johnson’s single gure pension remuneration represents Company contributions payable to his US pension arrangements. Mr Ferguson’s pension gure represents a cash sum in lieu of a Company pension contribution, which is set at 12% of his annual base salary.

iii. Benets include the provision of healthcare insurance, subscriptions, and a company car with fuel benets or allowance in lieu.

iv. With the Company recording another year of growth, including an increase in adjusted prot before tax (“PBT”) and return on average capital employed (“ROCE”), both of which exceeded the Annual Budget targets set in December 2022, a 90.5% vesting of the maximum opportunity has

been recorded. On this basis, Mr Johnson will receive a bonus payment of $1,467k, being 181% of his base salary paid in 2023, and Mr Ferguson will receive a bonus payment of £431k ($536k), being 136% of his base salary. The bonuses will be paid in March 2024 and, in-line with the

usual operation of the Annual Bonus Plan, 25% of the after-tax bonus will be utilised to purchase Ordinary shares in the Company, to be retained for two years.

v. In 2022, Mr Johnson’s annual bonus was $1,550k and Mr Ferguson’s annual bonus was £456k ($561k). The after-tax bonuses were utilised to purchase 68,813 and 21,004 Ordinary shares respectively in the Company, to be retained for two years.

vi. The share awards granted in 2021 under the HPSP had a three-year performance period to 31 December 2023 and will vest on 4 March 2024. The 2021 grant comprised the following four performance conditions: ROCE, EPS, TSR, and a Strategic Scorecard. The ROCE and EPS

targets both recorded a threshold vesting. The TSR performance condition was independently measured by Mercer and recorded a “Below Median” outcome vesting leading to nil vesting of this portion of the 2021 grant. In total, the 2021 grant under the HPSP recorded a 34.2% vesting.

On this basis, Mr Johnson will receive 259,144 Ordinary shares, plus a cash payment of 26.0 cents per share, equalling the dividends paid during the vesting period. The total value of Mr Johnson’s vested award was $980k. Following measurement, Mr Ferguson will receive 58,893

Ordinary shares, plus a cash payment of 26.0 cents per share, equalling the dividends paid during the vesting period, with a total value of $223k. For the purposes of the single gure calculation, the average mid-market closing price of £2.8371 during Q4 2023 has been applied to the

number of vested shares and converted to dollars using the average £:$ exchange during Q4 2023, being £1.2417. Further details of the vesting calculation are shown on page 150.

vii. The share awards granted in 2020 at £3.12 under the HPSP had a three-year performance period to 31 December 2022 and incorporated four performance conditions. The awards were measured against the relevant performance conditions, with a nil vesting recorded for the ROCE, EPS

and TSR performance conditions. A 7.5% vesting of the Strategic Scorecard (after application of the vesting cap on this element), was also recorded. On this basis, Messrs Johnson and Ferguson received 48,990 and 6,826 Ordinary shares, respectively. For the purposes of the single gure

calculation, the average mid-market closing price of £2.82 was applied to the share awards vested on 3 March 2023, with the 2022 single gure table being restated to reect the actual vested amount.

Hunting PLC Annual Report and Accounts 2023 147Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration continued

Salary and fees

There were no changes to the base salaries of the executive Directors during 2023.

The Committee met in December 2023 to receive management’s proposals for an average increase

in base salaries for the wider workforce for 2024. The Committee will deliberate on increases to the

executive Directors at its meeting in April 2024, subject to approval of the new Directors’ Remuneration

Policy at the Company’s 2024 AGM.

In December 2023, the Board reviewed the fee levels for the non-executive Directors and decided

to increase the Committee Chair and Senior Independent Director additional fees to £11,000 p.a.

The base fee for the non-executive Directors was left unchanged at £64,000 p.a. The Committee

reviewed benchmarked fee data for the Company Chair and, following discussion, decided to

increase the annual fee to £225,000 from 1 January 2024.

Pensions (audited)

In-line with other similarly long-tenured employees in the US, Jim Johnson is a member of a deferred

compensation scheme in the US, which is anticipated to provide a lump sum on retirement, and also

contributes to a US 401k matched deferred savings plan. Company contributions to the former

arrangement were $116,823 (2022 – $121,194) in the year. There are no additional benets provided

on early retirement from this arrangement. In the year, the Group contributed to Mr Johnson’s 401k

matched savings plan, totalling $19,800 (2022 – $18,300).

Mr Ferguson receives a cash sum in lieu of pension contributions, representing 12% of his annual

base salary. This contribution level aligns with the UK workforce, as required by the 2018 UK

Corporate Governance Code. In the year, Mr Ferguson’s company contribution in lieu of pension

was $47,385/£38,115 (2022 – $43,902/£35,626).

Annual performance-linked bonus plan (audited)

The annual performance-linked bonus plan for 2023 was based on the following metrics:

Proportion of award Performance metric

60% Adjusted prot before tax

20% Return on average capital employed

20% Strategic/personal performance objectives

Delivery of nancial objectives

The annual bonus targets are normally based on the Annual Budget agreed by the Board in

December of the prior nancial year. The 2023 Annual Budget agreed by the Board in December 2022

contained nancial targets of adjusted prot before tax of $43.4m and ROCE of 5.4%. The nancial

performance targets for the 2023 Annual Bonus were thus set as follows:

Threshold

vesting Target vesting Maximum vesting Actual outcome % vesting

Adjusted prot before tax

(“PBT”) $34.7m $43.4m $52.1m $50.0m 52.8%

Return on average capital

employed (“ROCE”) 4.3% 5.4% 6.5% 6.45% 19.7%

As in prior years, the annual bonus starts to accrue when 80% of the Annual Budget targets are met,

and increases on a straight-line basis up to 120% of the budget (or bonus) target. Given the return to

growth of the Company’s core markets, the Annual Bonus targets were exceeded, with a 72.5% of

a possible 80% outcome of this portion of the Annual Bonus award. The Committee awarded a 90%

outcome of the 20% vesting of the personal performance component of the Annual Bonus award.

The overall outcome of the Annual Bonus was 90.5%.

Hunting PLC Annual Report and Accounts 2023 148Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration continued

Delivery of strategic/personal performance objectives

The strategic/personal performance objectives agreed by the Committee with the executive Directors in early 2023 are summarised in the table below. Detailed analyses of these outcomes follow this table.

OBJECTIVE

JIM JOHNSON

(CHIEF EXECUTIVE)

BRUCE FERGUSON

(FINANCE DIRECTOR) PERFORMANCE ACHIEVED OUTCOME

Managing

from crisis to

success

(50%)

• Enhance senior executive

development and training, including

use of an external facilitator.

• Increase operational and

manufacturing data ows across

the Group, and increase nancial

performance and accountability

within the senior leadership team.

• Evaluate and present development

plans for the Company including

the delivery of a refreshed strategic

plan focusing on oil and gas,

non-oil and gas and energy

transition sectors.

• Continue to monitor the reduction

of the Group’s carbon footprint,

with increased accountability for

initiatives owed to the senior

leadership team.

• Align nancial reporting

processes and systems

to deliver the required

operational and

manufacturing data ow

improvements, with

particular attention to

production efciencies

and working capital

management.

• Improve board reporting

format for new data

requested.

• Deliver reports that detail

major project opportunities

for the Group and the

targeted returns, to ensure

rates of return are

understood.

• Further progressed the implementation of the D365 ERP system. Developed new reporting

formats that highlighted the Group’s external sales order book, product line revenue, EBITDA,

working capital and other key performance indicators based around a ‘Product Line’ external

reporting format.

• Delivered new reports on working capital efciency and project evaluation metrics to deepen

the Board’s understanding of the returns of the larger OCTG orders.

• These reports enabled members of the Executive Committee to present to the Directors

during the year.

• The Chief Executive implemented a senior leadership development programme, with Russell

Reynolds being engaged to support this initiative.

• Strong progress in identifying and evaluating potential non-oil and gas and energy transition

opportunities. These teams were expanded as geothermal and carbon capture projects

accelerated, particularly in the US and Asia Pacic.

• Expanded carbon data collection and continued to drive initiatives to contain and reduce

scope 1 and 2 emissions. Commenced assessment of scope 3 greenhouse gas emissions.

Exceeded

“Target”

delivery

Revenue

diversication

(25%)

• Continued focus on revenue

diversication including non-oil and

gas and energy transition sales.

• Continued focus on

revenue diversication

including non-oil and gas

and energy transition sales.

• As noted in the Strategic Report, non-oil and gas revenue increased from $47.6m in 2022

to $75.9m, with progress being made particularly within the Advanced Manufacturing

business units.

Fully

achieved

Market value

correction

(25%)

• Increase engagement with

institutional investors to understand

Hunting’s market valuation and

discount to net asset value.

• Present an informative narrative

framework at a Capital

Markets Day.

• Increase engagement with

institutional investors to

understand Hunting’s

market valuation and

discount to net asset value.

• Present an informative

narrative framework at

a Capital Markets Day.

• To enable investors to better understand the Group’s opportunities within the global offshore

energy industry, from 1 January 2023, executive management separated the Subsea

Technologies businesses from the North America operating segment. This is aimed at

increasing transparency in this segment of the market.

• Increased engagement with institutional investors and wider capital markets in the year,

including completion of an independent investor perception survey among the Group’s top

shareholders.

• Investor engagement efforts refocused on highlighting the Group’s technology, market

leadership and strength based around its major product lines, as opposed to the geographic

segmental reporting format. Prot measures based around product groups have been

developed during the year, to provide greater granularity on the performance of the Group.

• These initiatives combined underpinned successful delivery of executive management’s

maiden Capital Markets Day, held in London in September 2023 at which a long-term

strategy and nancial ambition to 2030 was delivered to investors, which included detailed

capital allocations and key strategic growth initiatives.

Exceeded

“Target”

delivery

Hunting PLC Annual Report and Accounts 2023 149Strategic Report Corporate Governance Financial Statements Other Information

Annual Bonus outcome

Based on this outcome of a vesting of 90.5%, the following bonus awards were made to the executive

Directors:

Proportion of award Performance metric Percentage of annual bonus awarded

60% Adjusted prot before tax 52.8%

20% Return on average capital employed 19.7%

20% Strategic/personal performance objectives 18.0%

Mr Johnson was, therefore, awarded a bonus for the year of $1,467k, and Mr Ferguson was awarded

a bonus of $536k. In-line with the normal operation of the Annual Bonus, 100% of the bonus will be

delivered in cash in March 2024, with 25% of the post-tax bonus to be utilised to purchase Ordinary

shares in the Company, to be retained for two years, in-line with the 2021 Directors’ Remuneration

Policy.

2021 HPSP vesting (audited)

The 2021 awards under the HPSP have been measured against the performance conditions following

completion of the three-year performance period ended 31 December 2023. The 2021 awards were

based on four performance conditions – ROCE (35%); adjusted diluted EPS (25%); relative TSR (25%)

and a Strategic Scorecard (15%) comprising two sub-measures being the Group’s Safety and Quality

performance. Performance is measured for the year ended 31 December 2023 for ROCE and

adjusted diluted EPS and over three nancial years ending 31 December 2023 for relative TSR and

the Strategic Scorecard. A summary of the performance achieved is detailed below:

% of award

Threshold vesting

target

Maximum

vesting target

Recorded

performance

% vesting

outcome

ROCE 35% 6.0% 9.0% 6.45% 12.7%

Adjusted diluted EPS 25% 20 cents 40 cents 20.3 cents 6.5%

Relative TSR 25% Median Upper quartile Below Median nil

Strategic Scorecard

– Safety 7.5% 2.00 <1.00 0.96 7.5%

– Quality 7.5% 0.8% 0.5% 0.15% 7.5%

The ROCE and EPS components of the 2021 grant under the HPSP have recorded a threshold

vesting and, based on this outcome, the Strategic Scorecard component of the HPSP grant will vest

in full.

The Total Shareholder Return (“TSR”) performance condition was measured by Mercer in January

2024, following completion of the three-year performance period. Hunting’s TSR performance against

the 13 comparator companies was then ranked, resulting in a “Below Median” performance

corresponding to a nil vesting of this portion of the grant.

Overall, the total vesting of the 2021 HPSP award is 34.2%. The vesting date of the 2021 HPSP award

is 4 March 2024. Mr Johnson will, therefore, receive 259,144 Ordinary shares and Mr Ferguson will

receive 58,893 Ordinary shares. A cash equivalent of dividends paid by the Company during the

vesting period, totalling 26.0 cents per vested share, will be added to the award on the vesting date.

The 2021 HPSP vesting has been calculated as follows:

Number of

granted in

2021

Vesting

Number of

vested

Value of vested

shares at

31 December

2023

Value of

dividends at

26.0 cents

per share

Total award

value

Value

attributable to

share price

growth

Jim Johnson 757,732 34.2 259,144 912,919 67,377 980,296 70,180

Bruce Ferguson 172,203 34.2 58,893 207,469 15,312 222,781 15,948

* As per the methodology for reporting the values of unvested awards, the average price of a Hunting PLC share during Q4 2023 of £2.8371

has been applied and converted to US dollars at an exchange rate of £1.2417 for the period. The share price on the date of grant was

£2.619.

In accordance with the 2021 Directors’ Remuneration Policy, these vested shares (net of tax) are to be

held for two years from the vesting date.

2020 HPSP vesting (audited)

The 2020 awards under the HPSP were measured against the performance conditions, following

completion of the three-year performance period, resulting in the following outcome:

Number of

granted in

2020

Vesting

Number of

vested

Value of vested

shares at

3 March

2023

Value of

dividends at

21.5 cents

per share

Total award

value

Value

attributable to

share price

reduction

Jim Johnson* 653,205 7.5 48,990 167,896 10,104 178,000 17,623

Bruce Ferguson* 91,022 7.5 6,826 23,394 1,408 24,802 2,455

* The value of awards have been restated at the market price of £2.82 per share with an FX rate of $1.2153 on 3 March 2023. Further details

have been included under the share interests table.

In accordance with the 2018 Directors’ Remuneration Policy, these vested shares are to be held for

two years from the vesting date.

Remuneration Committee Report continued

Annual Report on Remuneration continued

Hunting PLC Annual Report and Accounts 2023 150Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration continued

2023 HPSP grant (audited)

On 6 March 2023, the Committee approved the grant of nil-cost share awards to Jim Johnson and

Bruce Ferguson under the rules of the HPSP. Awards will vest on 6 March 2026, subject to the

achievement of the performance metrics, with a two-year holding period then applying to the post-tax

vested shares. The 2023 grant under the HPSP to the executive Directors was at the normal quantum,

as detailed in the Directors’ Remuneration Policy on pages 137 to 145.

Award as a % of

base salary

Number of shares

under grant

Face value of

award at threshold

vesting of 25%

Face value of

award at

maximum

vesting

Jim Johnson 450 994,687 911,630 3,646,521

Bruce Ferguson 210 236,529 216,779 867,115

The performance conditions and targets encourage strong growth in earnings (EPS), capital efciency

(ROCE) and cash generation (FCF), in addition to the important ESG metrics within the Strategic Scorecard,

namely Quality and Safety performance. A TSR metric is also utilised, to reect shareholder returns

over the performance period. The targets for each performance condition are as follows:

Performance condition

Proportion

of award

Threshold

vesting target

Maximum

vesting target

ROCE

25 10.5% 13.0%

FCF

20 $200m $250m

Adjusted diluted EPS

20 25.0 cents 50.0 cents

Relative TSR

20 Median Upper Quartile

Strategic Scorecard

– Safety 7.5 2.00 <1.00

– Quality 7.5 0.8% 0.5%

i. Measured for the year ended 31 December 2025.

ii. Measured across the three-year vesting period.

The following quoted businesses comprise the TSR comparator group for the 2023 award:

Akastor National Oilwell Varco TechnipFMC

Drill-Quip Nine Energy Tenaris

Expro Group Oceaneering Vallourec

Flotek Industries Oil States International

Forum Energy Technologies Schoeller-Bleckmann

The face value of the 2023 award is based on the closing mid-market share price on Friday 3 March

2023, which was 282.0 pence per share.

Changes to Director and employee pay

The table below is presented in compliance with the Shareholder Rights Directive II. The changes to

the pay of the executive Directors includes base salaries, benets in kind and bonuses and exclude

pension contributions and share awards. If a Director has not served for the entire year, they are

shown as not applicable.

2018 to 2019 2019 to 2020 2020 to 2021 2021 to 2022 2022 to 2023

Executive Directors

Jim Johnson

Base salary +4% +1% +1% +4% +5%

Annual cash bonus -60% -74% +5% +906% -5%

Benets +8% +31% -7% +1% +6%

Bruce Ferguson

Base salary n/a n/a n/a +8% +5%

Annual cash bonus n/a n/a n/a +913% -5%

Benets n/a n/a n/a – +8%

Average global employee

Base salary – -2% +9% +5% +3%

Annual cash bonus -14% -81% +9% +726% -21%

Benets +8% +7% +4% -3% +9%

Non-executive Directors (fees)

Annell Bay +11% – – – +6%

Carol Chesney +46% – – – +6%

Keith Lough +56% – – – +6%

Jay Glick +5% – – – +11%

Paula Harris

n/a n/a n/a n/a n/a

Stuart Brightman

iii

n/a n/a n/a n/a n/a

i. Bruce Ferguson was appointed to the Board on 20 April 2022 and therefore no change prior to 2021-2022 is applicable.

ii. Paula Harris was appointed to the Board on 20 April 2022 and therefore no change is applicable.

iii. Stuart Brightman was appointed to the Board on 3 January 2023 and therefore no change is applicable.

The average salary for employees in 2023 reects a change in the average monthly employee

headcount compared to the prior year, coupled with base salary increases implemented in December

2022 to the existing workforce. In addition some businesses exceeded maximum bonus levels while

other businesses failed to reached set targets, resulting in an overall reduced bonus payout.

Hunting PLC Annual Report and Accounts 2023 151Strategic Report Corporate Governance Financial Statements Other Information

Directors’ shareholdings, ownership policy and share interests (audited)

The benecial interests of the Directors in the issued Ordinary shares of the Company are as follows:

Director

At 31 December

2023

At 31 December

2022

Executive Directors

Jim Johnson

iii

567,988 469,463

Bruce Ferguson

iii

215,554 170,839

Non-executive Directors

Annell Bay 21,347 18,769

Stuart Brightman – –

Carol Chesney 24,000 24,000

Jay Glick 75,923 75,923

Paula Harris – –

Richard Hunting (to 20.04.22)

n/a 468,133

– as trustee n/a 194,960

– as Director of Hunting Investments Limited n/a 11,003,487

Keith Lough 24,000 24,000

i. Benecial share interests are those Ordinary shares owned by the Director or spouse, which the Director is free to dispose.

ii. As at cessation date.

iii. The shareholdings for Messrs Johnson and Ferguson include shares restricted from sale, in-line with the rules of the Annual Bonus Plan

and Hunting Performance Share Plan. At 31 December 2023, 125,497 restricted-from-sale Ordinary shares are held by Mr Johnson and

35,116 are held by Mr Ferguson.

There have been no further changes to the Directors’ share interests in the period 31 December 2023

to 29 February 2024.

The Group operates a share ownership policy that requires Directors and certain senior executives

within the Group to build up a holding in shares equal in value to a certain multiple of their base salary

or annual fee. The multiple takes into account the post-tax value of vested but unexercised share

awards or options. The required shareholding of each Director and the current shareholding as a

multiple of base salary or annual fee as at 31 December 2023 is presented below:

Director

Required holding

expressed as a

multiple of base

salary or fee Requirement met*

Jim Johnson 5 N

Bruce Ferguson 2 Y

Annell Bay 1 Y

Stuart Brightman 1 N

Carol Chesney 1 Y

Jay Glick 1 Y

Paula Harris 1 N

Keith Lough 1 Y

* The value of the holding of the Directors has been determined using the value on purchase of Ordinary shares or the share price at

31 December 2023 of £2.955.

Remuneration Committee Report continued

Annual Report on Remuneration continued

The interests of the executive Directors in Hunting PLC Ordinary shares under the HPSP are set out below. The vesting of options and awards are subject to performance conditions set out within the Policy.

Director

Interests at

1 January

2023

Options/awards

granted in year

Options/awards

exercised in year

Options/awards

lapsed in year

Interests at

31 December

2023

Exercise price

p Grant date Date exercisable Expiry date Scheme

Jim Johnson 653,205 – (48,990) (604,215) – Nil 03.03.2020 03.03.2023 – HPSP^

757,732 – – – 757,732 Nil 04.03.2021 04.03.2024 – HPSP^

1,217,058 – – – 1,217,058 Nil 04.03.2022 04.03.2025 – HPSP^

– 994,687 – – 994,687 Nil 06.03.2023 06.03.2026 – HPSP^

Total 2,627,995 994,687 (48,990) (604,215) 2,969,477

Bruce Ferguson 91,022 – (6,826) (84,196) – Nil 03.03.2020 03.03.2023 03.03.2030 HPSP~

172,203 – – – 172,203 Nil 04.03.2021 04.03.2024 04.03.2031 HPSP~

289,408 – – – 289,408 Nil 04.03.2022 04.03.2025 04.03.2032 HPSP~

– 236,529 – – 236,529 Nil 06.03.2023 06.03.2026 06.03.2033 HPSP~

Total 552,633 236,529 (6,826) (84,196) 698,140

^ Nil-cost share awards that are not yet vested or exercisable and still subject to the performance conditions being measured in accordance with the HPSP rules.

~ Nil-cost share options that are not yet vested or exercisable and still subject to the performance conditions being measured in accordance with the HPSP rules.

Hunting PLC Annual Report and Accounts 2023 152Strategic Report Corporate Governance Financial Statements Other Information

Remuneration Committee Report continued

Annual Report on Remuneration continued

Executive Director remuneration and shareholder returns

The following chart compares the TSR of Hunting PLC between 2013 and 2023 to the DJ US Oil

Equipment and Services indices. In the opinion of the Directors, this index is the most appropriate

against which the shareholder return of the Company’s shares should be compared because it

comprises other companies in the oil and gas services sector. The accompanying table details

remuneration of the Chief Executive.

Total shareholder return (rebased to 100 at 31 December 2013)

Hunting PLC

DJ US Oil Equipment & Services

31/12/13 31/12/15

31/12/17

31/12/19 31/12/21 31/12/23

150

125

100

Single gure

remuneration

$000

Annual cash

bonus

HPSP

% vesting

iii

LTIP

award %

2023 – Jim Johnson 3,466 91 34 n/a

2022 – Jim Johnson

2,710 100 8 n/a

2021 – Jim Johnson 1,165 10 8 n/a

2020 – Jim Johnson 1,179 10 16 n/a

2019 – Jim Johnson 2,229 39 66 n/a

2018 – Jim Johnson 3,715 100 75 n/a

2017 – Jim Johnson (from 1 September) 819 33 4 n/a

2017 – Dennis Proctor (to 1 September) 3,972 67 13 n/a

2016 – Dennis Proctor 941 Nil Nil n/a

2015 – Dennis Proctor 1,031 Nil Nil Nil

2014 – Dennis Proctor 4,808 57 Nil 100

i. Single gure remuneration reects the aggregate remuneration paid to the Chief Executive as dened within the Directors’ Remuneration

Policy.

ii. Annual cash bonus percentages reect the bonus received by the Chief Executive each year expressed as a percentage of maximum

bonus opportunity.

iii. Percentage vesting reects the percentage of the HPSP that vested in the nancial year where a substantial portion of the performance

period was completed at the nancial year-end. Messrs Johnson’s and Proctor’s awards have been pro-rated for their period of service as

Chief Executive in 2017.

iv. LTIP award percentage reects the award value expressed as a percentage of maximum award opportunity received each year measured

at 31 December. The LTIP expired in 2015 with no further awards outstanding.

v. Restated as per single gure table disclosure on page 147.

Chief Executive workforce pay ratio

Year Method

25th percentage

pay ratio

50th percentile

pay ratio

75th percentile

pay ratio

2019 Option A 49:1 38:1 22:1

Workforce Pay Quartiles $45,666 $58,603 $99,521

2020 Option A 22:1 18:1 10:1

Workforce Pay Quartiles $45,666 $61,329 $107,314

2021 Option A 21:1 17:1 11:1

Workforce Pay Quartiles $52,699 $63,329 $102,807

2022 Option A 55:1 43:1 26:1

Workforce Pay Quartiles $48,736 $62,108 $105,704

2023 Option A 70:1 54:1 33:1

Workforce Pay Quartiles $49,837 $64,467 $106,492

The Company has elected to voluntarily disclose the pay ratio of the Group’s Chief Executive and

workforce, in-line with The Companies (Miscellaneous Reporting) Regulations 2018 and has adopted

Option A from the regulations as the basis for presenting the pay ratio. Hunting is not required to

present this information, given that its UK workforce is below the reporting threshold, as detailed in

the regulations. Option A has been selected by the Committee as it believes this methodology aligns

closely with the Chief Executive’s single gure remuneration calculation. The Remuneration Committee

believes that the compensation framework in operation across the Group is appropriate and, in

addition to a base salary and benets appropriate to the relevant jurisdiction of operation, can include

annual bonuses and participation in long-term incentive programmes. External benchmarking is a

regular feature of the Group’s overall pay framework to ensure Hunting remains competitive in its

chosen markets. Hunting’s UK employees averaged 191 in the year (2022 – 158), which represents

8% (2022 – 8%) of the Group’s total average workforce in 2023. The basis of the workforce pay

calculations is aligned with the basis of preparation of the single gure table on page 147, comprising

xed and variable emoluments and calculated on a full-time equivalent basis, in-line with the

requirements of the regulations. Further, the above disclosure assumes a maximum company

pension contribution of 12% of base salary. However, it is noted that not all UK employees elect to

receive this level of contribution. This data has been collated as at 31 December 2023. The changes

to the Chief Executive pay ratios in the year mainly reect a higher HPSP vesting percentage of 34.2%

compared to 7.5% in 2022.

Hunting PLC Annual Report and Accounts 2023 153Strategic Report Corporate Governance Financial Statements Other Information

Relative importance of spend on pay

The table below shows the relative importance of spend on employee remuneration in relation to corporate

taxation, dividends and capital investment. The choice of performance metrics represents certain operating

costs of the Group and the use of operating cash ows in delivering long-term shareholder value.

2023

2022

$m Change

Employee remuneration

254.8 223.7 14%

Net tax paid

9.1 3.9 141%

Dividends paid to Hunting PLC shareholders

15.0 13.6 10%

Capital investment

23.7 16.4 34%

i. Includes staff costs for the year (note 7) plus benets in kind of $35.8m (2022 – $29.2m), which primarily comprises US medical insurance

costs.

ii. Please refer to page 59.

Payments to past Directors (audited)

Peter Rose retired as a Director of the Company on 15 April 2020. The emoluments paid during 2023

to Mr Rose were wholly related to his vested 2020 awards under the HPSP, whereby 3,788 Ordinary

shares in the Company were delivered to him when exercised on 3 March 2023, with a pro-rated

value of $13,195. Mr Rose has no outstanding share awards under the HPSP.

Payments for loss of ofce

There were no payments for loss of ofce in the year.

Implementation of policy in 2024

The remuneration policy for 2024 will be applied in-line with those detailed on pages 138 to 142.

Following consultation with a signicant number of institutional investors, the Remuneration

Committee is submitting a new Director’s Remuneration Policy and Long-Term Incentive Plan at the

Company’s Annual General Meeting on 17 April 2024. Details of the new policy can be found on

pages 133 and 134.

Salary and fees

Subject to approval of the new Directors’ Remuneration Policy at the Company’s AGM in April 2024,

the base salaries of the executive Directors will be increased by the average of the workforce plus an

additional 3.5%. Workforce base salary increases of 5.0% were implemented on 1 January 2024.

The increases proposed for the executive Directors are in-line with increases awarded to other high

performing employees of the Group.

As noted earlier, the base fees for the non-executive Directors will remain unchanged for 2024;

however, the Committee Chair and Senior Independent Director fees were increased to £11,000 p.a.

from the start of 2024.

The Company Chair fee was also increased to £225,000 p.a. from 1 January 2024, following

deliberations by the Committee and wider Board in December 2023.

Remuneration Committee Report continued

Annual Report on Remuneration continued

Pension and benets

Jim Johnson will continue to receive contributions towards a US deferred compensation scheme and

a US 401k matched deferred savings plan, in-line with previous years. Bruce Ferguson will continue to

receive a cash sum in lieu of a pension contribution, which will be xed at 12% of his base salary. No

changes are anticipated to the provision of benets that will continue to include healthcare insurance,

a company car and fuel benets or allowance in lieu.

Annual Bonus

The annual performance-linked bonus for 2024 will operate in-line with the shareholder approved

Directors’ Remuneration Policy. The Committee will disclose details of performance against the

pre-set nancial targets and strategic/personal performance objectives after the year-end, as the

Board believes that forward disclosure of the nancial targets is commercially sensitive.

New Long-Term Incentive Plan

In April 2024, an award under a new Long-Term Incentive Plan will be granted to the executive

Directors and wider members of the Group subject to approval of the new plan at the Company’s

2024 Annual General Meeting on 17 April 2024.

Subject to approval, the performance-based awards to the Chief Executive and Finance Director will

be issued share awards at the quantum of 350% of base salary for Mr Johnson and 160% of base

salary for Mr Ferguson. The performance conditions to be adopted for these awards are expected to

include relative TSR (30%); ROCE (25%); adjusted diluted EPS (15%); Free Cash Flow (15%); and the

Strategic Scorecard (15%). The proposed TSR peer group has been expanded for 2024 in light of

shareholder feedback to include Hunting’s key competitors for talent and comprises: Akastor, Cactus,

Core Laboratories, Dril-Quip, Expro Group Holdings, Flotek Industries, Forum Energy Technologies,

Liberty Energy, Nine Energy Service, NOV, Oceaneering International, Oil States International,

Patterson-UTI Energy, Petrofac, Schoeller Bleckmann, TechnipFMC, Tenaris, Tetra Technologies and

Vallourec. Time-based awards will also be granted to the executive Directors, being 100% of base

salary for the Chief Executive and 50% for the Finance Director, subject to approval by shareholders.

The performance targets will be detailed in the Stock Exchange announcement that accompanies

the award, which can be located at www.huntingplc.com.

On behalf of the Board

Annell Bay

Chair of the Remuneration Committee

29 February 2024

Hunting PLC Annual Report and Accounts 2023 154Strategic Report Corporate Governance Financial Statements Other Information

Audit Committee

Report

Carol Chesney

Chair of the Audit Committee

Member Invitation

Number of meetings held 5

Number of meetings attended

(actual/possible):

Annell Bay 5/5 –

Stuart Brightman 5/5 –

Carol Chesney (Committee Chair) 5/5 –

Bruce Ferguson – 5/5

Jay Glick – 5/5

Paula Harris 5/5 –

Jim Johnson – 5/5

Keith Lough 4/5 –

During 2023, the Company

continued to build on momentum

from 2022 and the strengthening

of its end-markets, and reported a

signicant increase in its revenue

and protability over the previous

year. The focus of the Audit

Committee’s (the “Committee”)

work over the year has been

consideration of the recognition

of previously unrecognised

deferred tax assets held by the

Group’s US businesses, and

revenue recognition processes

and procedures.

The Group’s growing order

book and tender pipeline

have enabled the business

units to have greater visibility

on earnings.

Introduction

As impetus in the international and offshore

markets continued to improve, the Group’s

growing order book and tender pipeline have

enabled the business units to have greater

visibility on earnings, with the most recent

forecasts prepared by the business units

reecting this. As the forecasts demonstrated

that the US businesses were to be protable for

the foreseeable future, the unrecognised deferred

tax assets held by the US businesses were

recognised on the balance sheet at the year-end

as realisation of the tax benet within a reasonable

time frame was probable. Due to the size and

nature of the deferred tax assets recognised

in the year, the Committee concurred with

management’s proposal to disclose these as

an adjusting item.

Revenue recognition has remained an area of

focus for the Committee during the year, given

the increase in the number of long timescale

orders received by the Subsea Spring and

Dearborn business units. Each contract is quite

complex, unique and has to be assessed for

‘point in time’ or ‘over time’ revenue recognition,

which is an area that requires a high level

of judgement.

As part of the Committee’s half-year and full-year

procedures, impairment reviews of the Group’s

current and non-current assets were completed,

which resulted in a small goodwill impairment

charge being recorded within the Enpro Subsea

business unit at the half-year. This impairment

was triggered as a result of the broad-based

increase in discount rates, driven by the higher

interest rates being recorded globally, with a

consistent approach being adopted in-line with

impairment reviews completed in recent years.

Given the improved operating environment for

the Group, no further goodwill impairment

charges were recognised at the year-end.

During the year, the Committee monitored

inventory, together with the inventory provision

discussed below, and the levels of working

capital in general.

The Committee continued to monitor the

implementation of the inventory valuation model

that was established in 2022, to ensure that a

consistent approach was being applied across

the Group to inventory provisioning. Overall,

the Committee was satised that there was a

robust control process in place following nal

renements and that the valuation methodology

allowed for management’s judgement to be

applied when appropriate.

The Committee also considered whether there

were any other signicant items that should be

disclosed as adjusting items for the current year

and, following discussion with management and

the external auditor, no additional items were

identied for separate disclosure.

Hunting PLC Annual Report and Accounts 2023 155Corporate Governance Financial Statements Other Information

Strategic Report

Audit Committee Report continued

Composition and frequency of meetings

The Committee currently comprises six

independent non-executive Directors (at

29 February 2024) and is chaired by Carol

Chesney. Following his appointment to the

Board on 3 January 2023, Stuart Brightman

joined the Committee. Margaret Amos also

joined the Committee on her appointment as

a Director to the Board on 10 January 2024.

Mrs Chesney is a qualied Chartered Accountant

and is considered to have recent and relevant

nancial experience. Ms Bay (Chair of the

Remuneration Committee), Ms Harris and

Messrs Brightman and Lough have experience

of the global energy industry, with particular

expertise in the UK and US oil and gas markets.

Margaret Amos has experience in the aviation

industry, an area where Hunting seeks to grow

in the coming years, as well as nance and

accounting.

Further details of the Committee’s experience

can be found in the biographical summaries set

out on pages 112 and 113. The Committee

normally meets four times a year and operates

under written terms of reference approved by the

Board, which are published on the Company’s

website at www.huntingplc.com.

During 2023, the Committee met ve times in

January, February, April, August and December,

and the attendance record of the Committee

members and Board invitees is noted in the table

on the previous page. All Directors and internal

and external auditors are normally invited to

attend meetings.

Responsibilities

The principal responsibilities of the Audit

Committee are to:

• monitor and review reports from the executive

Directors, including the Group’s nancial

statements and Stock Exchange

announcements;

• provide the Board with a recommendation

regarding the Half Year and Annual Report

and Accounts, including whether they are fair,

balanced and understandable;

• consider and approve any adjusting items

proposed by management;

• review the Company’s and Group’s Going

Concern and Viability statements;

• monitor, review and assess the Group’s

systems of risk management and internal

control;

• review reports from the Group’s external and

internal auditors, including approving the

proposed audit plans, scope and resourcing;

review whether the external and internal

auditors have met their respective audit plans;

• consider and recommend to the Board the

appointment or reappointment of the external

auditor as applicable;

• agree the scope and fees of the external audit;

• monitor and approve engagement of the

external auditor for the provision of non-audit

services to the Group; review the external

auditor’s independence and objectivity as

well as the effectiveness of the external audit

process; review the external auditor’s

management letter; and

• monitor corporate governance and accounting

developments.

Work undertaken by the Committee during 2023

Jan Feb Apr Aug Dec

Financial report

Annual Report and Full Year Results announcement •

Going Concern basis • •

Viability Statement •

Half Year Report and Half Year Results announcement •

Review accounting policies •

Internal controls and risk management

Risk management and internal controls report • • •

Key risks and mitigating controls •

Effectiveness of internal controls and internal audit function •

Internal audit report • • •

Internal audit plan and resourcing •

External auditor

Auditor’s objectivity, independence and appointment •

Full Year and Half Year report to the Audit Committee • •

Final Management letter on internal controls •

Auditor’s performance and effectiveness •

Proposed year-end audit plan including scope,

fees and engagement letter • • •

Risk of auditor leaving the market •

Other business

Whistleblowing and Bribery Policy Review •

Committee effectiveness and terms of reference •

Review of the 2023 nancial statements

The Committee reviews nal drafts of the Group’s

Report and Accounts for both the half and full year.

As part of this process, the performance of the

Group’s major operating segments is considered,

with key judgements, estimates and accounting

policies being approved by the Committee ahead

of a recommendation to the Board. In addition to

briengs and supporting reports from the central

nance team on signicant issues, the

Committee engages in discussion with Deloitte

LLP, the Group’s external auditor.

Signicant matters reviewed by the Committee

in connection with the 2023 Annual Report and

Accounts were as follows:

Taxation

A major area of focus for the Committee

during the year related to the recognition of

the unrecognised deferred tax assets (“DTAs”),

with a brieng given to the Board by the Group

Head of Tax at the December 2023 meeting.

Management assessed the probability of Hunting

being able to utilise the unrecognised DTAs

against future taxable prots, and concluded that

the strong performance by the businesses in the

year as well as forecast protability supported

the recognition of these DTAs. The Committee

were satised with the timing of the recognition

of the DTAs.

Hunting PLC Annual Report and Accounts 2023 156Strategic Report Corporate Governance Financial Statements Other Information

The Committee continues to monitor tax risk, tax

audits and provisions held for taxation in view of

the international spread of operations.

Revenue recognition

Given the Group’s improving results in 2023

together with the increase in longer-term

contracts received by the Subsea Spring and

Dearborn business units, revenue recognition

received ongoing focus in the year. Additional

internal review procedures with respect to

revenue recognition were introduced in 2022,

following challenge from the external auditor, and

their implementation continued to be monitored

throughout the year. The Internal Audit function

included a review of Subsea Spring’s revenue

recognition procedures as part of its audit plan

for the year. The Committee was satised that

more robust procedures are now in place.

Inventory valuation and provisioning

procedures

During 2023, inventory valuation and provisioning

procedures continued to be an area of review for

the Committee. During 2022, the Group’s central

nance function developed a common valuation

methodology to further improve the processes

and controls around inventory provisioning, with

particular focus on ensuring these processes and

controls were consistent throughout the Group’s

business units.

The Committee reviewed reports by both

management and the external auditor on the

continued renement of the model and the

process for embedding it within the Group’s

business units. The Committee was satised

that the inventory valuation model was being

used appropriately by management, that the

judgements being applied were balanced, and,

therefore, the carrying values of inventories at

the year-end were appropriate.

Impairment reviews

The Committee also received reports on the

review of impairment of goodwill and other

non-current assets held on the consolidated

balance sheet. A review for impairment triggers

was undertaken at the half-year, resulting in an

impairment review of the Enpro Subsea cash

generating unit and a $1.4m charge being

recorded due to an increase in the discount rate.

A review of indenite life assets was undertaken

for the full year, with no further impairment

charges being recognised. The Committee noted

the business units where headroom for the

carrying value of goodwill was more limited, with

these units undertaking detailed modelling as

part of the year-end process to support the

values recorded. Management continues to

utilise independent drilling and production

projections published by Spears & Associates

to support its analysis, with summaries presented

in the Market Summary section of the Strategic

Report on pages 24 to 26.

Inventories

At the year-end, the Group held $328.4m

(2022 – $272.1m) of inventory. This represents

approximately 34% of the Group’s net assets

(2022 – 32%). Inventory levels have increased as

activity levels in the Group rose and inventory

purchases were increased to meet the

requirements of the sales order book. As noted

above, the inventory provisioning methodology

continued to be rened through the year, with the

Committee satised that a robust process was

now embedded, which encompassed all key

product lines sold by the Group.

Property, plant and equipment (“PPE”)

The year-end balance sheet includes $254.5m

(2022 – $256.7m) for PPE. This represents

approximately 27% of the Group’s net assets

(2022 – 30%).

The movement in PPE reects depreciation of

$27.2m and disposals of $0.8m offset by

additions of $23.1m and other items totalling

$2.7m. The Committee reviewed the PPE

impairment tests and, following discussion, was

satised that the assumptions and the disclosures

in the year-end accounts were appropriate.

Goodwill

The year-end balance sheet includes $154.4m

(2022 – $155.5m) of goodwill. This represents

approximately 16% of the Group’s net assets

(2022 – 18%), with Hunting Titan representing

74% of the year-end balance (2022 – 74%). As

noted above, a $1.4m impairment to goodwill in

respect of the Enpro Subsea cash generating

unit was recorded in the year, which was

primarily driven by changes to the discount rates

applied to the impairment model. The Committee

considered and challenged the discount rates

and the factors used in the goodwill review

process. After discussion, it was satised that

the carrying values recorded and the disclosures

in the year-end accounts were appropriate.

Other intangible assets

The year-end balance sheet includes other

intangible assets of $40.8m (2022 – $35.7m). This

represents approximately 4% of the Group’s net

assets (2022 – 4%). Additions in the year were

$10.9m (2022 – $5.7m) and the amortisation

charge recorded in the consolidated income

statement was $6.6m (2022 – $4.4m). The

Committee considered and conrmed the

appropriateness of the assumptions and factors

used in the review process and were comfortable

with the carrying values, as recorded.

Right-of-use assets

The year-end balance sheet includes right-of-use

assets of $26.2m (2022 – $26.0m). This represents

approximately 3% of the Group’s net assets

(2022 – 3%). The movement in the year is

predominantly attributed to depreciation of

$6.6m (2022 – $6.4m) offset by additions of

$6.2m (2022 – $5.1m). The Committee reviewed

the movement in the carrying values of these

items and conrmed the appropriateness of the

assumptions and factors used in the review

process and were comfortable with the items,

as recorded.

Adjusting items and presentation of

nancial statements

The Committee is responsible for reviewing and

approving any material adjusting items proposed

by management.

At the 2023 year-end, the recognition of the US

DTAs of $83.1m as an adjusting item was

proposed by management. The Committee

agreed with this presentation and also considered

whether there were any other material or

signicant items that should be disclosed as

adjusting items for the current year and, following

discussion, agreed that no further items had

been identied. In 2022, two adjusting items to

prot before tax totalling $12.6m were recorded.

From 1 January 2023, the Group’s Subsea

Technologies businesses were reported as

a standalone operating segment, as these

businesses had been identied by management

as an area of growth and focus for the Group. It

was noted that there was no requirement under

IFRS to separately disclose Subsea Technologies

as an operating segment as it did not meet the

required thresholds. The external auditor

reviewed and agreed the revised presentation

of the operating segments.

Audit Committee Report continued

Hunting PLC Annual Report and Accounts 2023 157Strategic Report Corporate Governance Financial Statements Other Information

Audit Committee Report continued

Going concern basis and Viability

Statement

The Committee monitored assumptions around

Going Concern at the half and full year, as well as

those around the Group’s Viability Statement for

the full year. Driven by the improved protability

of the Group, led by the performance of the

North America, Subsea Technologies and Asia

Pacic operating segments, the Committee

concluded that good support for Hunting’s

longer-term viability exists.

While the Group reported a year-end small

negative total cash and bank position compared

to the positive position at 31 December 2022, the

Committee noted that Hunting has absorbed

part of its cash balances in the investment in

inventory to support the strong order book of the

Group’s global businesses. Other principal cash

outows were for capital investment, labour costs

and dividends.

The utilisation and availability of the $150 million

Asset Based Lending (“ABL”) facility has

supported the Group’s Going Concern

statement. The ABL facility continues to add

signicant long-term liquidity to the Group, and

is linked to the secured value of inventories,

freehold property and receivables held by

Hunting’s North American businesses. In the

year, Hunting remained fully compliant with its

bank covenants.

As part of the Company’s 2023 half-year and

full-year procedures, management presented

various trading scenarios to support the Going

Concern assumption, which were reviewed by

the Committee and the external auditor. This

included a downside trading scenario.

As part of Hunting’s Viability Statement

procedures, management prepared an extended

forecast that provided trading projections to

2028. The Board approved this in January 2024

and used it to support the carrying values of

assets held on the consolidated balance sheet.

On 26 February 2024, the Committee approved

the Viability Statement, detailed on page 106 of

the Strategic Report, noting that it presented a

reasonable outlook for the Group for the next

three years.

Fair, balanced and understandable

assessment

The Committee reviewed the nancial

statements, together with the narrative contained

within the Strategic Report set out on pages 2 to

108, and believes that the 2023 Annual Report

and Accounts, taken as a whole, is fair, balanced

and understandable. In arriving at this conclusion,

the Committee undertook the following:

• review and dialogue in respect of the monthly

management accounts and supporting

narrative circulated to the Board;

• review of early drafts of the Annual Report and

Accounts, providing relevant feedback to the

executive Directors;

• regular review and discussion of the nancial

results during the year, including briengs by

Group nance and operational management;

and

• receipt and review of reports from the external

and internal auditors.

The Committee advised the Board of its

conclusion that the 2023 Annual Report and

Accounts, taken as a whole, was fair, balanced

and understandable at a Meeting of Directors

on 27 February 2024.

Internal audit

An annual programme of internal audit

assignments in respect of 2023 was reviewed

and approved by the Committee in February.

During the year, the Committee received reports

from the Internal Audit function. The Chair of the

Committee also had regular dialogue with the

function throughout the year. During the year,

eight eld audits were completed in-line with the

2023 Internal Audit Plan. In addition, further work

on control review procedures was carried out,

especially in relation to the revenue recognition

procedures of the Subsea Spring business unit’s

long-term contracts and the continuing

implementation of the Group’s new ERP system

within a number of businesses.

The Committee met with the Head of Internal

Audit, without the presence of the executive

Directors, on three occasions during the year.

The Committee reviews the internal audit process

and effectiveness as part of the Group’s internal

control and risk assessment programme. The

effectiveness of the Internal Audit function was

considered by the Committee at its February

meeting, which concluded that the function

remained effective.

External audit

Deloitte LLP was appointed by the Group’s

shareholders as external auditor in 2019 and,

therefore, no tenders have been undertaken in

the year due to their current tenure. This position

also applies to the engagement partner attached

to the Group’s account. During the year, the

second partner on the Group account rotated

off, with a new second partner appointed. The

engagement partner is due to rotate off the

Hunting account following the completion of

the 2023 audit.

The external auditor presented reports at the

February, April, August and December meetings

of the Audit Committee during 2023. Further, the

Chair of the Committee also had regular dialogue

with the audit engagement partner throughout

the year.

In April 2023, Deloitte LLP presented its

Management Controls Report, which highlighted

control improvements they recommended be

made by the Group.

On 26 February 2024, a full-year report by

Deloitte LLP was considered ahead of

publication of the Group’s 2023 Annual Report

and Accounts.

The Committee normally meets with the external

auditor, without executive Directors present, at

the end of each formal meeting. During the year,

the Company complied with the provisions of the

Statutory Audit Services for Large Companies

Market Investigation (Mandatory Use of

Competitive Tender Process and Audit

Committee Responsibilities) Order 2014.

Materiality

The Committee discussed materiality with the

external auditor regarding both accounting errors

to be brought to the Audit Committee’s attention

and amounts to be adjusted so that the nancial

statements give a true and fair view. Overall, audit

materiality was set at $4.5m (2022 – $4.0m). This

equates to approximately 0.5% (2022 – 0.6%) of

the Group’s total external revenue reported in

2023. Furthermore, the auditor agreed to draw

to the Audit Committee’s attention all identied,

uncorrected misstatements greater than $0.2m

and any misstatements below that threshold

considered to be qualitatively material.

Hunting PLC Annual Report and Accounts 2023 158Strategic Report Corporate Governance Financial Statements Other Information

Audit scope

The Audit Committee considered the audit scope

and materiality threshold. The audit scope

addressed Group-wide risks and local statutory

reporting, enhanced by desktop reviews for

smaller, low risk entities. Approximately, over 79%

of the Group’s reported revenue and the Group’s

net assets were audited, covering 18 reporting

units, including a number of investment holding

companies, across ve countries.

Audit effectiveness and independence

The external auditor’s full-year report includes a

statement on their independence, their ability to

remain objective and their ability to undertake an

effective audit.

The Committee considers and assesses this

independence statement on behalf of the Board,

taking into account the level of fees paid,

particularly for non-audit services. Having taken

into account these factors, the Committee

concluded that Deloitte LLP was independent

from the Group throughout the year and to the

date of their audit report.

The effectiveness of the audit process was

considered throughout the year, with a formal

review undertaken by the Company at the April

meeting of the Committee.

The assessment summarises management

feedback and considers the performance of the

external auditor, including:

• the external auditor’s understanding of the

Group’s business and industry sector;

• the planning and execution of the audit plan

by the external auditor approved by the

Committee;

• the communication between the Group

and audit engagement team;

• the external auditor’s response to questions

from the Committee, including during private

meetings without management present;

• the independence, objectivity and scepticism

of the auditors, including management

challenge on any items within the audit scope;

• a report from the Finance Director and the

Group Financial Controller; and

• nalisation of the audit work ahead of

completion and announcement of the Annual

Report and Accounts.

In addition, the Committee reviewed and took

account of the reports from the Financial

Reporting Council on Deloitte LLP, and reviewed

the Transparency Report prepared by Deloitte

LLP. After considering these matters, the

Committee was satised with the effectiveness

of the year-end audit process.

Non-audit services

The Committee closely monitors fees paid to the

auditor in respect of non-audit services. With the

exception of audit-related assurance services,

which totalled $0.2m (2022 – $0.2m), there were

no non-audit service fees paid during the year

(2022 – $nil). The scope and extent of non-audit

work undertaken by the external auditor was

monitored by, and required prior approval from,

the Committee to ensure that the provision of

such services did not impair the external auditor’s

independence or objectivity.

Auditor reappointment

Following discussion in February 2024, the

Committee approved the recommendation to

propose the reappointment of Deloitte LLP at

the Company’s 2024 Annual General Meeting.

ESEF reporting

The Group is required to produce its annual

report in XHTML format, an electronic format

known as a structured report, to comply with the

European Single Electronic Format (“ESEF”)

reporting requirements. Digital tags were applied

to the Group’s consolidated nancial statements

within its 2022 Annual Report and Accounts and

the structured report was successfully submitted

to the Financial Conduct Authority’s National

Storage Mechanism in April 2023. A qualied IT

provider was involved in the preparation of the

structured report and Deloitte LLP completed

a number of assurance procedures on the

structured report.

Deloitte LLP has again been asked to provide

an assurance report on the compliance of the

Group’s tagged 2023 Annual Report and

Accounts with the ESEF reporting requirements.

Internal controls

The Group has an established risk management

framework and internal control environment,

which was in operation throughout the year. The

Committee monitors these arrangements on

behalf of the Board and these are detailed in the

Risk Management section of the Strategic Report

on pages 96 to 105.

As noted above, the inventory valuation

methodology that was successfully introduced

in 2022, continued to be rened and embedded

during 2023.

Financial Reporting Council (“FRC”) review

of the 2022 Annual Report and Accounts

As part of its remit, the FRC is authorised to

review and investigate the Annual Accounts,

Strategic Reports and Directors’ Reports of

public and large private companies for

compliance with relevant reporting requirements.

Although these reviews are carried out by

personnel skilled in the relevant legal and

accounting frameworks, they are based solely on

published report and accounts and do not benet

from a detailed knowledge of the company or the

underlying transactions entered into.

The FRC therefore requests companies referring

to these reviews to make clear the limitations of

the review process and that the review provides

no assurance that the report and accounts are

correct in all material respects.

As part of its normal operating procedures,

Hunting’s 2022 Annual Report and Accounts

were selected for review by the FRC. Based on

this review, the FRC had no questions or queries

that it wished to raise and informed the Company

of this by letter. The letter did note a number

of areas where the FRC felt disclosures could

be improved.

The Audit Committee welcomes the constructive

feedback from the FRC and, as a result, has

enhanced disclosures in a number of areas in the

2023 Annual Report and Accounts.

Review of Committee effectiveness

In December 2023, the Committee reviewed its

effectiveness and the Committee Chair reported

these ndings to the Board. No issues were

identied as part of this review process.

On behalf of the Board

Carol Chesney

Chair of the Audit Committee

29 February 2024

Audit Committee Report continued

Hunting PLC Annual Report and Accounts 2023 159Strategic Report Corporate Governance Financial Statements Other Information

Directors’ Report

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the

Annual Report and the nancial statements in

accordance with applicable law and regulations.

Company law requires the Directors to prepare

nancial statements for each nancial year. Under

that law the Directors are required to prepare the

group nancial statements in accordance with

United Kingdom adopted international

accounting standards. The Directors have also

chosen to prepare the parent company nancial

statements under United Kingdom adopted

international accounting standards. Under

company law the Directors must not approve the

nancial statements unless they are satised that

they give a true and fair view of the state of affairs

of the Company and of the prot or loss of the

Company for that period.

In preparing these nancial statements,

International Accounting Standard 1 requires

that Directors:

• properly select and apply accounting policies;

• present information, including accounting

policies, in a manner that provides relevant,

reliable, comparable and understandable

information;

• provide additional disclosures when

compliance with the specic requirements

of the nancial reporting framework are

insufcient to enable users to understand the

impact of particular transactions, other events

and conditions on the entity’s nancial position

and nancial performance; and

• make an assessment of the Company’s ability

to continue as a going concern.

The Directors are responsible for keeping

adequate accounting records that are sufcient

to show and explain the Company’s transactions

and disclose, with reasonable accuracy at any

time, the nancial position of the Company and

enable them to ensure that the nancial

statements comply with the Companies Act

2006. They are also responsible for safeguarding

the assets of the Company and hence for taking

reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors are responsible for the

maintenance and integrity of the corporate and

nancial information included on the Company’s

website. Legislation in the United Kingdom

governing the preparation and dissemination of

nancial statements may differ from legislation

in other jurisdictions.

Responsibility Statement

We conrm that to the best of our knowledge:

• the nancial statements, prepared in

accordance with the relevant nancial

reporting framework, give a true and fair view

of the assets, liabilities, nancial position and

prot or loss of the Company and the

undertakings included in the consolidation

taken as a whole;

• the Strategic Report includes a fair review of

the development and performance of the

business and the position of the Company and

the undertakings included in the consolidation

taken as a whole, together with a description

of the principal risks and uncertainties that they

face; and

• the Annual Report and nancial statements,

taken as a whole, are fair, balanced and

understandable and provide the information

necessary for shareholders to assess the

Company’s position and performance,

business model and strategy.

This responsibility statement was approved

by the Board of Directors at their meeting on

Tuesday 27 February 2024.

Directors

The Directors of the Company, during the year

and up to the date of signing these accounts,

are listed on pages 112 and 113.

Powers of the Directors

Subject to the Articles, UK legislation and any

directions prescribed by resolution at a general

meeting, the business of the Company is

managed by the Board. The Articles may only

be amended by special resolution at a general

meeting of shareholders. Where class rights are

varied, such amendments must be approved by

the members of each class of share separately.

The Directors have been authorised to allot and

issue Ordinary shares and to disapply statutory

pre-emption rights. These powers are exercised

under authority of resolutions of the Company

passed at its AGM. During the nancial year

ended 31 December 2023, no Ordinary shares

were issued pursuant to the Company’s various

share plans.

The Company has authority, renewed annually,

to purchase up to 14.99% of the issued share

capital, equating to 24,724,518 shares. Any

shares purchased will either be cancelled and

the number of Ordinary shares in issue reduced

accordingly, held in treasury, sold for cash or

(provided Listing Rule requirements are met)

transferred for the purposes of or pursuant to

an employee share scheme.

These powers are effective for 15 months from

the date of shareholder approval, or up to the

next general meeting where new authorities are

sought. The Directors will be seeking a renewal

for these powers at the 2024 AGM.

Appointment and Replacement of Directors

The rules about the appointment and replacement

of Directors are contained in the Articles. On

appointment, in accordance with the Articles,

Directors may be appointed by a resolution of the

Board but are then required to be reappointed by

ordinary resolution by shareholders at the

Company’s next AGM.

Directors’ interests

Details of Directors’ remuneration, service

contracts and interests in the Company’s shares

and share options are set out in the Directors’

Remuneration Policy and Annual Report on

Remuneration, located at www.huntingplc.com.

Further information regarding employee

long-term incentive schemes is given in note 37

of the nancial statements.

Directors’ conict of interest

All Directors have a duty under the Companies

Act 2006 to avoid a situation in which they have,

or could have, a direct or indirect conict of

interest with the Company. The duty applies,

in particular, to the exploitation of any property,

information or opportunity, whether or not the

Company could take advantage of it. The Articles

provide a general power for the Board to

authorise such conicts.

Directors are not counted in the quorum for the

authorisation of their own actual or potential

conicts. Authorisations granted are recorded

by the Company Secretary in a register and are

noted by the Board. On an ongoing basis, the

Directors are responsible for informing the

Company Secretary of any new, actual or

potential conicts that may arise, or if there are

any changes in circumstances that may affect

an authorisation previously given.

Hunting PLC Annual Report and Accounts 2023 160Strategic Report Corporate Governance Financial Statements Other Information

Even when provided with authorisation, a

Director is not absolved from his or her statutory

duty to promote the success of the Company. If

an actual conict arises post-authorisation, the

Board may choose to exclude the Director from

receipt of the relevant information and

participation in the debate, or suspend the

Director from the Board, or, as a last resort,

require the Director to resign. As at 31 December

2023, no Director of the Company had any

benecial interest in the shares of Hunting’s

subsidiary companies.

Auditors

A resolution for the reappointment of Deloitte LLP

as auditor to the Company and a resolution

which gives the Audit Committee the authority to

determine the remuneration of the auditor will be

proposed at the 2024 AGM.

Statement of Disclosure of Information

to Auditors

In accordance with the Companies Act 2006,

all Directors in ofce as at the date of this report

have conrmed, so far as they are aware, there

is no relevant audit information of which the

Group’s auditors are unaware and each Director

has taken all reasonable steps necessary in order

to make themselves aware of any relevant audit

information and to establish that the Group’s

auditors are aware of that information. This

conrmation should be interpreted in accordance

with the provisions of Section 418 of the

Companies Act 2006.

Share capital

Hunting PLC is a premium-listed public company

limited by shares, with its Ordinary shares quoted

on the London Stock Exchange. The Company’s

issued share capital comprises a single class,

which is divided into 164,940,082 Ordinary

shares of 25 pence each.

All of the Company’s issued Ordinary shares

are fully paid up and rank equally in all respects.

Details of the issued share capital of the

Company and the number of shares held in

treasury as at 31 December 2023 can be found

in note 33 to the nancial statements.

Subject to applicable statutes, shares may be

issued with such rights and restrictions as the

Company may, by ordinary resolution, decide,

or (if there is no such resolution or so far as it

does not make specic provision) as the Board

(as dened in the Articles) may decide.

Voting rights and restrictions on transfer

of shares

Holders of Ordinary shares are entitled to receive

dividends (when declared), receive the Company’s

Annual Report and Accounts, attend and speak

at general meetings of the Company, and appoint

proxies or exercise voting rights.

On a show of hands at a general meeting of the

Company, every holder of Ordinary shares present

in person or by proxy and entitled to vote has one

vote and, on a poll, every member present in

person or by proxy and entitled to vote has one

vote for every Ordinary share held. None of the

Ordinary shares carry any special rights with

regard to control of the Company.

Proxy appointments and voting instructions must

be received by the Company’s Registrars no later

than 48 hours before a general meeting. A

shareholder can lose their entitlement to vote at

a general meeting where that shareholder has

been served with a disclosure notice and has

failed to provide the Company with information

concerning interests in those shares.

Shareholders’ rights to transfer shares are

subject to the Articles of Association. Transfers

of uncerticated shares must be carried out

using CREST and the Directors can refuse to

accordance with the regulations governing the

operation of CREST. The Directors may decide

to suspend the registration of transfers, for up

to 30 days a year, by closing the register of

shareholders. The Directors cannot suspend

the registration of transfers of any uncerticated

shares without obtaining consent from CREST.

There are no restrictions on the transfer of

Ordinary shares in the Company other than:

• certain restrictions that may, from time to

time, be imposed by laws and regulations,

for example insider trading laws;

• pursuant to the Company’s share dealing code

whereby the Directors and certain employees

of the Company require approval to deal in the

Company’s shares; and

• where a shareholder with at least a 0.25%

interest in the Company’s certicated shares

has been served with a disclosure notice

and has failed to provide the Company

with information concerning interests in

those shares.

Interests in voting rights

Other than as stated in the table on page 162,

the Company is not aware of any further

agreements between shareholders that may

result in restrictions on the transfer of Ordinary

shares or on voting rights.

Market capitalisation

The market capitalisation of the Company at

31 December 2023 was £0.5bn (2022 – £0.5bn).

Share price

2023

2022

At 1 January 333.0 169.2

At 31 December 295.5 333.0

High during the year 351.5 365.0

Low during the year 197.4 169.2

Dividends

The Company normally pays dividends

semi-annually. Details of the Company’s

dividend policy is set out on page 10.

The Company paid the 2022 nal dividend of

4.5 cents per share on 12 May 2023, which

absorbed $7.1m of cash. At the Group’s 2023

Half Year Results, the Board declared an interim

dividend of 5.0 cents per share, which was paid

to shareholders on 27 October 2023, and

absorbed $7.9m of cash. The Board is

recommending a nal dividend for 2023 of

5.0 cents per share, to be paid to shareholders

on 10 May 2024, subject to approval by

shareholders at the Company’s 2024 AGM.

Employee Benet Trust

The Group operates an Employee Benet Trust

(the “Trust”) as a vehicle to satisfy share options

and awards granted to employees who

participate in the Company’s share-based

incentive schemes. At 31 December 2023,

the Trust held 6,591,918 Ordinary shares in the

Company (2022 – 5,370,963). The Trust has

a policy to purchase shares in the market or

subscribe for new shares to partially meet the

future requirements of these incentive schemes.

The Trust has waived all dividends payable by

the Company and voting rights in respect of the

Ordinary shares held by it.

Directors’ Report continued

Hunting PLC Annual Report and Accounts 2023 161Strategic Report Corporate Governance Financial Statements Other Information

Major shareholders

The Company’s major shareholders, as at 31 December 2023, are listed in the table below.

Notes

Number of

Ordinary Shares % of ISC

BlackRock, Inc. 12,749,575 7.73

Schroder Investment Management 11,649,926 7.06

Hunting Investments Limited 1/4/5 11,003,487 6.67

Abrdn 10,784,962 6.54

GLG Partners 9,565,911 5.80

J P Morgan Asset Management 8,443,282 5.12

Hunting Employee Benet Trust 6,591,918 4.00

Slaley Investments Limited 5 6,424,591 3.89

Orbis Investment Management 5,951,997 3.61

J Trafford – as trustee 2/5 5,228,660 3.17

David RL Hunting 1/2/3/4/5 194,120 0.12

– as trustee 3,157,750 1.91

– other benecial 1,875,950 1.14

Dimensional Fund Advisers 5,076,993 3.08

Included in this holding are 9,437,743 Ordinary shares held by Huntridge Limited, a wholly-owned subsidiary of Hunting Investments

Limited. Neither of these companies is owned by Hunting PLC either directly or indirectly.

After elimination of duplicate holdings, the total Hunting family trustee interests shown above amount to 5,228,660 Ordinary shares.

David RL Hunting and his children are or could become beneciaries under the relevant family trusts of which Mr Hunting is also a trustee.

David RL Hunting is a director of Hunting Investments Limited.

In 2014, Hunting Investments Limited, Slaley Investments Limited, certain Hunting family members, including Richard H Hunting and David

RL Hunting and the Hunting family trusts, to which James Trafford is a trustee (together known as “the Hunting Family Interests”), entered

into a voting agreement. The voting agreement has the legal effect of transferring all voting rights of Hunting PLC Ordinary shares held by

the Hunting Family Interests to a voting committee. The benecial ownership of Hunting PLC Ordinary shares remains as per the table

shown above. At 29 February 2024, the Hunting Family Interests, party to the agreement, totalled 24,170,900 Ordinary shares in the

Company, representing 14.7% of the total voting rights.

Other information

Signicant agreements

The Company is party to the Asset Based

Lending facility in which the counterparties

can determine whether or not to cancel the

agreement where there has been a change of

control of the Company. The service agreements

of the executive Directors include provisions for

compensation for loss of ofce or employment

as a result of a change of control.

Political contributions

It is the Group’s policy not to make political

donations. Accordingly, there were no political

donations made during the year (2022 – $nil).

Payments to governments

In accordance with the UK’s Disclosure and

Guidance Transparency Rule 4.3A, Hunting PLC

is required to report annually on payments made

to governments with respect to its oil and gas

activities. Hunting’s report on “Payments to

Governments” for the year ended 31 December

2022 was published on 20 April 2023 and

totalled $875,964.

Research and development

Group subsidiaries undertake, where appropriate,

research and development to meet particular

market and product needs.

The Group’s research and development costs

in the year totalled $6.9m (2022 – $5.8m),

with the amount expensed in the year totalling

$4.7m (2022 – $4.8m).

Companies Act 2006 Section 415

In compliance with section 415 of the Companies

Act 2006, the Directors present their report and

the audited nancial statements of Hunting PLC

for the year ended 31 December 2023.

The Strategic Report incorporates the Hunting

2030 Strategy, Key Performance Indicators,

Company Chair’s Statement, Chief Executive’s

Review and Outlook, Market Summary, Business

Model and Strategy, Stakeholders and

Engagement protocols, Product Review,

Operating Segment Review, Group Review,

ESG and Sustainability, and Risk Management

and is located on pages 2 to 108.

As permitted by legislation, the Board has

chosen to set out, within the Strategic Report

and Corporate Governance Report, some of the

matters required to be disclosed in the Directors’

Report, which it considers to be complementary

to communicating Hunting’s nancial position

and performance, as follows:

• changes in the Group and its interests

(pages 20 and 21);

• dividends (page 15);

• future developments (page 23);

• risk management, objectives and policies

(pages 96 to 98);

• bribery and corruption

(pages 33 to 37 and 78);

• ethnicity and diversity (pages 33 and 76);

• employment of disabled persons

(pages 33 and 76); and

• greenhouse gas emissions and environmental

matters (pages 38, 69 to 73, 82 and 95).

For further information, please see the

Shareholder and Statutory Information section

located on pages 246 and 247.

The Companies (Miscellaneous Reporting)

Regulations 2018

As required by The Companies (Miscellaneous

Reporting) Regulations 2018 (the “Regulations”),

the Board of Hunting PLC has prepared a section

172(1) statement, which can be found on page

108 and also on the Group’s website

www.huntingplc.com.

The Directors’ Stakeholder Engagement and

decision making disclosures are summarised

within the Strategic Report on pages 32 to 39,

and include cross references to the various

engagement activities across the Group’s

operations. Additional disclosures in respect of

customers, suppliers and other key business

relationships can also be found within the

Strategic Report.

Approval of accounts

The 2023 Annual Report and Accounts were

approved by the Directors at their meeting on

Tuesday 27 February 2024.

By order of the Board

Ben Willey

Company Secretary

29 February 2024

Directors’ Report continued

Hunting PLC Annual Report and Accounts 2023 162Strategic Report Corporate Governance Financial Statements Other Information

FINANCIAL

STATEMENTS

Independent Auditor’s Report to

the Members of Hunting PLC 164

Consolidated Income Statement 174

Consolidated Statement of

Comprehensive Income 175

Consolidated Balance Sheet 176

Consolidated Statement

of Changes in Equity 177

Consolidated Statement of Cash Flows 178

Notes to the Consolidated

Financial Statements 179

Company Balance Sheet 228

Company Statement of Changes in Equity 229

Company Statement of Cash Flows 230

Notes to the Company Financial Statements 231

Hunting PLC Annual Report and Accounts 2023 163Strategic Report Corporate Governance Financial Statements Other Information

Independent Auditor’s Report to the Members of Hunting PLC

Report on the audit of the nancial statements

1. Opinion

In our opinion:

• the nancial statements of Hunting PLC (the “Parent Company”) and its subsidiaries (the “Group”)

give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at

31 December 2023 and of the Group’s prot for the year then ended;

• the Group nancial statements have been properly prepared in accordance with United Kingdom

adopted international accounting standards;

• the Parent Company nancial statements have been properly prepared in accordance with United

Kingdom adopted international accounting standards and as applied in accordance with the

provisions of the Companies Act 2006; and

• the nancial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the nancial statements which comprise:

• the consolidated income statement;

• the consolidated statement of comprehensive income;

• the consolidated and Parent Company balance sheets;

• the consolidated and Parent Company statements of changes in equity;

• the consolidated and Parent Company statements of cash ows; and

• the related notes 1 to 40 for the consolidated nancial statements, and notes C1 to C20 for the

Parent Company nancial statements.

The nancial reporting framework that has been applied in their preparation is applicable law and

United Kingdom adopted international accounting standards.

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those standards are further described in the auditor’s

responsibilities for the audit of the nancial statements section of our report.

We are independent of the Group and the Parent Company in accordance with the ethical

requirements that are relevant to our audit of the nancial statements in the UK, including the Financial

Reporting Council’s (the “FRC’s”) Ethical Standard as applied to listed public interest entities and we

have fullled our other ethical responsibilities in accordance with these requirements. We conrm that

we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group

or the Parent Company.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for

our opinion.

3. Summary of our audit approach

Key audit matters The key audit matters that we identied in the current year were:

• inventory valuation in Titan US and pressure control equipment in US

Manufacturing; and

• revenue recognition in relation to specic long-term contracts.

Within this report, key audit matters are identied as follows:

Increased level of risk

Similar level of risk

Materiality The materiality that we used for the Group nancial statements was

$4.5 million, which was determined on the basis of revenue.

Scoping The scope of our Group audit includes a number of reporting units across the

Group, whose results taken together account for 79% of the Group’s revenue

and net assets. Our audit work covered Group operations in ve countries

comprising 18 reporting units, including a number of investment holding

companies.

Signicant

changes in

our approach

We no longer consider goodwill and non-current asset impairment as a

key audit matter, given improved trading conditions across the Group and

specically a strong order book supporting the revenue forecasts within

the Enpro CGU.

Hunting PLC Annual Report and Accounts 2023 164Financial StatementsStrategic Report Corporate Governance Other Information

4. Conclusions relating to going concern

In auditing the nancial statements, we have concluded that the Directors’ use of the going concern

basis of accounting in the preparation of the nancial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to continue

to adopt the going concern basis of accounting included:

• enquiries as to the process followed by management and obtained an understanding of the relevant

controls, including over: the preparation of budgets and forecasts covering the foreseeable future;

the assumptions on which the assessment is based; and management’s plans for future actions;

• evaluating the cash ow forecasts that drive the going concern assessment, including the reliability

of the underlying data and challenging management on the assumptions applied by comparing to

external industry data where relevant and considering how these have been sensitised to determine

reasonable downside scenarios;

• assessing the terms of the asset-based borrowing facility and whether any amounts had been

drawn down in order to determine whether covenants in the agreement have been breached and

therefore could impact the going concern assessment;

• performing a stand-back assessment and considered all relevant audit evidence obtained, whether

corroborative or contradictory, for any indicators of possible management bias; and

• assessing the appropriateness of the disclosures in the nancial statements, and that these were

sufciently detailed.

Based on the work we have performed, we have not identied any material uncertainties relating to

events or conditions that, individually or collectively, may cast signicant doubt on the Group’s and

Parent Company’s ability to continue as a going concern for a period of at least twelve months from

when the nancial statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the Directors’ statement in the nancial

statements about whether the Directors considered it appropriate to adopt the going concern basis

of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are

described in the relevant sections of this report.

5. Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most signicance in

our audit of the nancial statements of the current period and include the most signicant assessed

risks of material misstatement (whether or not due to fraud) that we identied. These matters included

those which had the greatest effect on: the overall audit strategy; the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the nancial statements as a whole,

and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 165Financial StatementsStrategic Report Corporate Governance Other Information

5.1. Inventory valuation in Titan US and pressure control equipment in US Manufacturing)

Key audit matter description The Group holds inventory of $328.4 million at 31 December 2023 (2022 – $272.1 million), net of a provision of $52.5 million (2022 – $50.0 million). The cyclical and

current trading environment and market conditions continue to expose the Group to the risk of over-valuation of aged inventory and therefore it is key that the Group has

an appropriate provisioning model. We identied inventory valuation in Titan US and pressure control equipment in US Manufacturing as a key audit matter given the risk

that certain inventory lines held may remain technically relevant but demand in the marketplace may be low and therefore there could be excess inventory on hand that

will never be sold at or above its carrying amount.

Management’s judgement in assessing the valuation of inventory is primarily based on expectations of future sales, the forecast turn period and inventory utilisation

plans, combined with their consideration of historical sales and their assessment of the continued technological relevance of the Group’s products.

Refer to page 157 of the Audit Committee report and notes 1, 20 and 40 to the nancial statements for disclosures relating to management’s critical judgements and key

assumptions, inventory and principal accounting policies respectively.

How the scope of our audit

responded to the key audit

matter

We performed the following procedures to assess the valuation of management’s inventory reserves:

• obtained an understanding and tested the design and implementation of the relevant controls over the inventory valuation process, including how management

estimate their inventory reserves;

• obtained and assessed the inventory provisioning models (including assessing the mechanical accuracy) and detailed analysis prepared by management, to

determine whether the Group’s provisioning policy has been applied appropriately and that the approach taken appropriately reect current market conditions;

• challenged any key assumptions such as the historical sales period used to drive expected forward turns, the forecast turn period applied and any additional uplifts

or decreases factored in by management to adjust historical sales run rates to better reect future trading expectations. This included consideration of historically

achieved revenue levels, any signicant changes in business structure or markets, inventory utilisation plans, third-party industry forecasts, production capacity levels

and current revenue run rates to demonstrate whether the inferred future revenue levels are reasonable;

• where appropriate, evaluated management’s comparison of forecast sales against relevant third-party forecasts as a stand-back assessment on the future utilisation

of current inventory levels; and

• evaluated the available support from management, including current sales transactions, used to determine an appropriate net realisable value to assess whether

inventory is being held at an appropriate amount. Where considered appropriate, we also made direct enquiries of sales and operational personnel.

Key observations We are satised that the judgements taken by management in relation to inventory valuation are appropriate in light of current market conditions.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 166Financial StatementsStrategic Report Corporate Governance Other Information

5.2. Revenue recognition in relation to specic long-term contracts

Key audit matter description The revenue recognised by the Group in 2023 is $929.1 million (2022 – $725.8 million).

The application of the Group’s revenue recognition policies to the various contractual arrangements in place across the Group can be complex. This complexity arises

most notably in those contracts where revenue is recognised over time due to the judgement involved in estimating a contract’s costs to complete; and where revenue

is recognised at a point in time, in the timing of recognition.

We identied revenue recognition on specic long-term contracts as a key audit matter related to the potential risk of fraud given the impact of these judgements on the

result for the year and the possibility of manipulation. This risk has increased in the year given the increasing size and complexity of the Group’s contractual

arrangements with its customers. The key risks we identied in revenue recognition on specic long-term contracts are:

• the application of IFRS 15 Revenue from contracts with customers in determining the appropriate basis for revenue recognition of ve contracts with total contract

values in excess of $270 million over the term of those contracts. In particular, the assessment of whether revenue should be recognised at a point in time or over

time, and where revenue should be recognised at a point in time, the timing of that recognition of revenue; and

• the accuracy of the forecast costs to complete in the over time revenue for Spring and Dearborn. For Spring this specically related to two contracts where revenue

should be recognised over time.

Refer to page 157 of the Audit Committee report and notes 3 and 40 to the nancial statements.

How the scope of our audit

responded to the key audit

matter

We obtained an understanding of the relevant controls over the revenue recognition process relating to these contracts. This included: the preparation and review of

the accounting papers related to the signicant contracts, the estimation processes for contracts where revenue is recognised over time including how those costs to

complete are reviewed and challenged, and the process for ensuring the revenue recognised aligns to the transfer of control for contracts where revenue is recognised

at a point in time.

We performed the following procedures:

• for those contracts where this risk is around the judgements involved with respect to the application of revenue recognition, we obtained and assessed the related

contracts and analyses from management over the timing of the revenue recognised and assessed how the terms had been interpreted to determine whether the

conclusions were appropriate and in accordance with the requirements of IFRS 15. Where the revenue was recognised at a point in time, we evaluated whether the

point in time determined by management was appropriate and obtained the relevant evidence to conrm the performance obligations had been met and that the

revenue had been appropriately recognised; and

• for those contracts where this risk is around the judgement in the ‘over time’ recognition of revenue, we assessed the appropriateness of estimated costs to complete

as this impacts the extent of revenue recognised. The specic procedures performed included:

– inspecting the bill of materials to conrm how these were being priced;

– inspecting the labour cost estimate and conrming this to forecast labour rates;

– inspecting the overhead estimate and assessing how this had been allocated; and

– evaluating historical estimating accuracy i.e., comparing forecast and actual prot to verify if adequate risks are considered.

Key observations We are satised that revenue in relation to specic long-term contracts has been recognised appropriately and in accordance with IFRS 15 Revenue from Contracts with

Customers.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 167Financial StatementsStrategic Report Corporate Governance Other Information

$929.1m $4.5m

6. Our application of materiality

6.1. Materiality

We dene materiality as the magnitude of misstatement in the nancial statements that makes it

probable that the economic decisions of a reasonably knowledgeable person would be changed or

inuenced. We use materiality both in planning the scope of our audit work and in evaluating the

results of our work.

Based on our professional judgement, we determined materiality for the nancial statements as a

whole as follows:

Group

nancial statements

Parent Company

nancial statements

Materiality $4.5 million (2022 – $4.0 million) $4.1 million (2022 – $3.6 million)

Basis for

determining

materiality

0.5% of revenue (2022 – 0.6%) Parent Company materiality

equates to 0.4% (2022 – 0.4%) of

net assets, which is capped at 90%

(2022 – 90%) of Group materiality

Rationale for the

benchmark applied

Consistent with the prior year we

have used revenue as our primary

benchmark in determining

materiality as this is a key metric for

the users of the nancial statements.

Given that the Parent Company’s

balance sheet is mostly made up

of investments and intercompany

receivables, we consider net assets

to be the most relevant benchmark.

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in

aggregate, uncorrected and undetected misstatements exceed the materiality for the nancial

statements as a whole.

Group

nancial statements

Parent Company

nancial statements

Performance

materiality

70% (2022 – 70%) of Group

materiality

70% (2022 – 70%) of Parent

Company materiality

Basis and rationale for

determining

performance

materiality

In determining performance materiality, we considered the following

factors:

• our knowledge obtained from the previous audits; and

• our overall assessment of the control environment and the corrected

and uncorrected misstatements identied in the prior year, including

the fact that we have placed reliance on the relevant controls over

revenue within the Titan US, US Manufacturing and US Connections

reporting units.

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in

excess of $225,000 (2022 – $200,000), as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure

matters that we identied when assessing the overall presentation of the nancial statements.

Group materiality

$4.5m

Component

materiality range

$1.6m to $4.1m

Audit Committee

reporting threshold

$0.2m

Revenue

Group materiality

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 168Financial StatementsStrategic Report Corporate Governance Other Information

7. An overview of the scope of our audit

7.1. Identication and scoping of components

The Group has 56 (2022 – 56) reporting units and the nancial statements reect a consolidation of

entities covering centralised functions, operating units and non-trading legal entities. The systems,

processes and controls in place vary across the Group and therefore our audit scoping procedures

considered each reporting unit individually.

Our scoping consisted of three levels, with audit effort split across each scoping level. We identied

eleven (2022 – ten) reporting units across the Group that were subject to full scope reporting on their

complete nancial information, which included three (2022 – three) holding company reporting units.

Specic audit procedures over certain balances were performed at a further seven (2022 – seven)

reporting units, to give appropriate coverage on all material balances at the Group level. The remaining

reporting units and balances not included above were subject to analytical review procedures.

Together, the reporting units subject to audit procedures accounted for over 79% (2022 – over 78%)

of the Group’s revenue and net assets. The range of component materiality levels is $1.6 million to

$4.1 million (2022 – $1.4 million to $3.6 million).

74%

21%

72%

21%

Revenue

Full audit scope

Specied audit procedures

Review at Group level

Net assets

Full audit scope

Specied audit procedures

Review at Group level

7.2. Our consideration of the control environment

The new ERP system (“D365”) continues to be rolled out across the Group, with a number of business

units having gone live during 2023. Consistent with our audit plan we adopted a controls reliance

approach across the revenue processes within the business units already live on D365 (Titan US, US

Manufacturing and US Connections). To enable this, we obtained an understanding of the relevant

manual controls within those processes and we involved our IT specialists to obtain an understanding

of the associated general IT controls (“GITCs”), in areas such as information security, user access and

change management. In addition to the GITCs within D365, we also obtained an understanding of the

key GITCs within Cognos, management’s reporting and consolidation software.

Further, we assessed certain implementation controls over the data conversion and the data migration

on business units that went live on D365 during the year, which included business units in the US,

Singapore and the UK. This included GITCs and manual controls.

Across the Group, we also obtained an understanding of relevant manual controls within the

nancial reporting processes, controls relevant to our signicant risks, and any other controls we

deemed relevant.

7.3. Our consideration of climate-related risks

In planning our audit, we have considered the potential impact of climate change on the Group’s

business and its nancial statements.

The Group continues to develop its assessment of the potential impacts of climate change

with specic transitional and physical climate related risks identied in the Strategic Report on

pages 85 to 89.

As a part of our audit we obtained management’s climate-related risk assessment and held

discussions with management to understand the process of identifying climate-related risks, the

determination of mitigating actions and the impact on the Group’s nancial statements.

As explained in note 1 on page 179, the Directors’ view is that the external long-term forecasts used in

preparing their forecasts incorporate climate change developments, supporting the view that there will

be a robust demand for the Group’s oil and gas products over the short and medium term. Estimates

made using these forecasts do not currently identify any concerns regarding the carrying values or

expected lives of longer-lived assets.

We performed our own qualitative risk assessment of the potential impact of climate change on the

Group’s account balances and classes of transaction and did not identify any reasonably possible

risks of material misstatement. Our procedures were performed with the involvement of our climate

change specialists and included evaluating whether appropriate climate-related disclosures have been

made in the nancial statements and reading disclosures included in the Strategic Report to consider

whether they are materially consistent with the nancial statements and our knowledge obtained in

the audit.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 169Financial StatementsStrategic Report Corporate Governance Other Information

7.4. Working with other auditors

In carrying out our scoping procedures as described above, our audit work covered Group operations

in ve (2022 – seven) countries, covering 18 (2022 – 17) reporting units, including a number of head

ofce entities. Three (2022 – three) reporting units were within the Group team’s scope and residual 15

(2022 – 14) were covered by the respective component audit teams in the US, the UK, Singapore

and China.

We directed and supervised our component audit teams through regular discussions and interactions

during the planning phase of our audit and throughout the year end process. We visited each of our

component teams during the year and performed a detailed review of their work over areas including

key judgements and signicant risks, using technology to access component auditors’ working

papers remotely where relevant. We also requested that a number of reporting documents be

completed by each component team for our review.

Further, specic audit procedures over the central functions and areas of signicant judgement

including taxation, treasury and goodwill and non-current asset impairment were performed by the

Group audit team centrally.

8. Other information

The other information comprises the information included in the annual report, other than the nancial

statements and our auditor’s report thereon. The Directors are responsible for the other information

contained within the annual report.

Our opinion on the nancial statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the nancial statements or our knowledge obtained in the

course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to

determine whether this gives rise to a material misstatement in the nancial statements themselves.

If, based on the work we have performed, we conclude that there is a material misstatement of this

other information, we are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of Directors

As explained more fully in the Directors’ Responsibility Statement, the Directors are responsible for the

preparation of the nancial statements and for being satised that they give a true and fair view and for

such internal control as the Directors determine is necessary to enable the preparation of nancial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the nancial statements, the Directors are responsible for assessing the Group’s and the

Parent Company’s ability to continue as a going concern, disclosing as applicable, matters related to

going concern and using the going concern basis of accounting unless the Directors either intend to

liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but

to do so.

10. Auditor’s responsibilities for the audit of the nancial statements

Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to inuence the economic decisions of users taken on

the basis of these nancial statements.

A further description of our responsibilities for the audit of the nancial statements is located on the FRC’s

website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 170Financial StatementsStrategic Report Corporate Governance Other Information

11. Extent to which the audit was considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in-line with our responsibilities, outlined above, to detect material misstatements in respect

of irregularities, including fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

11.1. Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud

and non-compliance with laws and regulations, we considered the following:

• the nature of the industry and sector, control environment and business performance including the

design of the Group’s remuneration policies, key drivers for Directors’ remuneration, bonus levels

and performance targets;

• results of our enquiries of management, internal audit, and the Audit Committee about their own

identication and assessment of the risks of irregularities, including those that are specic to the

Group’s sector;

• any matters we identied having obtained and reviewed the Group’s documentation of their policies

and procedures relating to:

– identifying, evaluating and complying with laws and regulations and whether they were aware

of any instances of non-compliance;

– detecting and responding to the risks of fraud and whether they have knowledge of any actual,

suspected or alleged fraud; and

– the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations; and

• the matters discussed among the audit engagement team including signicant component audit

teams and relevant internal specialists, including tax, valuations, IT and nancial instruments

regarding how and where fraud might occur in the nancial statements and any potential indicators

of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist

within the organisation for fraud and identied the greatest potential for fraud in revenue recognition

in relation to specic long-term contracts. In common with all audits under ISAs (UK), we are also

required to perform specic procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Group operates

in, focusing on provisions of those laws and regulations that had a direct effect on the determination

of material amounts and disclosures in the nancial statements. The key laws and regulations we

considered in this context included the UK Companies Act, Listing Rules, patent law, pensions

legislation and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect

on the nancial statements but compliance with which may be fundamental to the Group’s ability to

operate or to avoid a material penalty. This included employment legislation, health, safety and the

environment (“HSE”) regulations, international trading laws and environmental regulations.

11.2. Audit response to risks identied

As a result of performing the above, we identied revenue recognition in relation to specic long-term

contracts as a key audit matter related to the potential risk of fraud. The key audit matters section of

our report explains the matter in more detail and also describes the specic procedures we performed

in response to that key audit matter.

In addition to the above, our procedures to respond to risks identied included the following:

• reviewing the nancial statement disclosures and testing to supporting documentation to assess

compliance with provisions of relevant laws and regulations described as having a direct effect

on the nancial statements;

• enquiring of management and the Audit Committee concerning actual and potential litigation

and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud; and

• reading minutes of meetings of those charged with governance and reviewing internal audit reports;

in addressing the risk of fraud through management override of controls, testing the

appropriateness of journal entries and other adjustments; assessing whether the judgements made

in making accounting estimates are indicative of a potential bias; and evaluating the business

rationale of any signicant transactions that are unusual or outside the normal course of business.

We also communicated relevant identied laws and regulations and potential fraud risks to all

engagement team members including internal specialists and signicant component audit teams

and remained alert to any indications of fraud or non-compliance with laws and regulations

throughout the audit.

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 171Financial StatementsStrategic Report Corporate Governance Other Information

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared

in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic Report and the Directors’ Report for the nancial year for

which the nancial statements are prepared is consistent with the nancial statements; and

• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable

legal requirements.

In the light of the knowledge and understanding of the Group and the Parent Company and their

environment obtained in the course of the audit, we have not identied any material misstatements

in the Strategic Report or the Directors’ Report.

13. Corporate Governance Statement

The Listing Rules require us to review the Directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance Statement relating to the Group’s

compliance with the provisions of the UK Corporate Governance Code specied for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the Corporate Governance Statement is materially consistent with the nancial statements

and our knowledge obtained during the audit:

• the Directors’ statement with regards to the appropriateness of adopting the going concern basis

of accounting and any material uncertainties identied set out on page 107;

• the Directors’ explanation as to its assessment of the Group’s prospects, the period this

assessment covers and why the period is appropriate set out on page 106;

• the Directors’ statement on fair, balanced and understandable set out on page 160;

• the Board’s conrmation that it has carried out a robust assessment of the emerging and principal

risks set out on pages 96 to 98 and 106;

• the section of the annual report that describes the review of effectiveness of risk management and

internal control systems set out on pages 116, 158 and 159; and

• the section describing the work of the Audit Committee set out on page 156.

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Parent Company, or returns adequate

for our audit have not been received from branches not visited by us; or

• the Parent Company nancial statements are not in agreement with the accounting records

and returns.

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures

of Directors’ remuneration have not been made or the part of the Directors’ remuneration report to

be audited is not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

15. Other matters which we are required to address

15.1. Auditor tenure

Following the recommendation of the Audit Committee, we were appointed by the Directors on

17 April 2019 to audit the nancial statements for the year ended 31 December 2019 and subsequent

nancial periods. The period of total uninterrupted engagement including previous renewals and

reappointments of the rm is ve years, covering the years ending 31 December 2019 to

31 December 2023.

15.2. Consistency of the audit report with the additional report to the Audit Committee

Our audit opinion is consistent with the additional report to the Audit Committee we are required

to provide in accordance with ISAs (UK).

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 172Financial StatementsStrategic Report Corporate Governance Other Information

16. Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of

Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to

the Company’s members those matters we are required to state to them in an auditor’s report and for

no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s members as a body for our audit work, for this

report, or for the opinions we have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule

(DTR) 4.1.15R – DTR 4.1.18R, these nancial statements form part of the Electronic Format Annual

Financial Report led on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R

– DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format Annual

Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R. We have been

engaged to provide assurance on whether the Electronic Format Annual Financial Report has been

prepared in compliance with DTR 4.1.15R – DTR 4.1.18R and will publicly report separately to the

members on this.

William Smith

(Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

29 February 2024

Independent Auditor’s Report to the Members of Hunting PLC continued

Hunting PLC Annual Report and Accounts 2023 173Financial StatementsStrategic Report Corporate Governance Other Information

Consolidated Income Statement

For the year ended 31 December 2023
		2023	2022
	Notes	$m	$m
Revenue	3	929.1	725.8
Cost of sales		(701.4)	(554.4)
Gross prot		227.7	171.4
Selling and distribution costs		(49.3)	(46.1)
Administrative expenses		(119.8)	(124.9)
Net operating income and other expenses	4	2.4	1.6
Operating prot	6	61.0	2.0
Finance income	8	0.9	3.0
Finance expense	8	(11.3)	(4.7)
Share of associates’ and joint ventures’ results	16	(0.6)	(2.7)
Prot/(loss) before tax		50.0	(2.4)
Taxation	9	69.0	(1.3)
Prot/(loss) for the year		119.0	(3.7)
Attributable to:
Owners of the parent		117.1	(4.6)
Non-controlling interests		1.9	0.9
		119.0	(3.7)
Earnings/(loss) per share		cents	cents
Basic	10	73.8	(2.8)
Diluted	10	70.0	(2.8)

The notes on pages 179 to 227 are an integral part of these consolidated nancial statements.

Hunting PLC Annual Report and Accounts 2023 174Strategic Report Corporate Governance Financial Statements Other Information

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2023

		2023	2022
	Notes	$m	$m
Prot/(loss) for the year		119.0	(3.7)
Other comprehensive income/(expense), after tax:
Items that may subsequently be reclassied to prot or loss:
Exchange adjustments		3.6	(9.9)
Fair value (losses)/gains arising on cash ow hedges during the year		(0.3)	0.3
Far value (gains)/losses arising on cash ow hedges reclassied to prot or loss		(0.2)	0.1
Items that will not be reclassied to prot or loss:
Remeasurement of dened benet pension schemes	32,35	–	0.1
Other comprehensive income/(expense), after tax		3.1	(9.4)
Total comprehensive income/(expense) for the year		122.1	(13.1)
Attributable to:
Owners of the parent		120.4	(13.3)
Non-controlling interests		1.7	0.2
		122.1	(13.1)

Total comprehensive income/(expense) attributable to owners of the parent arises from the Group’s continuing operations.

Hunting PLC Annual Report and Accounts 2023 175Strategic Report Corporate Governance Financial Statements Other Information

Notes

		2023	2022
		$m	$m
ASSETS
Non-current assets
Property, plant and equipment	11	254.5	256.7
Right-of-use assets	12	26.2	26.0
Goodwill	13	154.4	155.5
Other intangible assets	14	40.8	35.7
Investments in associates and joint ventures	16	20.5	20.1
Investments	17	4.4	4.8
Trade and other receivables	18	1.8	2.8
Deferred tax assets	19	93.1	13.7
		595.7	515.3
Current assets
Inventories	20	328.4	272.1
Trade and other receivables	18	251.4	232.4
Cash and cash equivalents	21	45.5	29.4
Current tax assets		1.3	0.1
		626.6	534.0

Consolidated Balance Sheet

At 31 December 2023

Notes

		2023	2022
		$m	$m
LIABILITIES
Current liabilities
Trade and other payables	22	163.4	141.8
Lease liabilities	24	8.0	9.1
Borrowings	25	46.3	4.9
Provisions	27	4.8	4.6
Current tax liabilities		3.3	3.4
		225.8	163.8
Net current assets		400.8	370.2
Non-current liabilities
Trade and other payables	22	3.7	3.2
Lease liabilities	24	20.7	21.5
Borrowings	25	3.9	3.9
Provisions	27	2.7	4.3
Deferred tax liabilities	19	8.4	6.4
		39.4	39.3
Net assets		957.1	846.2
Equity attributable to owners of the parent
Share capital	33	66.5	66.5
Share premium	33	153.0	153.0
Other components of equity	34	8.9	15.8
Retained earnings	35	725.4	609.3
Total attributable to owners of the parent		953.8	844.6
Non-controlling interests		3.3	1.6
Total equity		957.1	846.2

The notes on pages 179 to 227 are an integral part of these consolidated nancial statements. The

nafinancial statements on pages 174 to 227 were approved by the Board of Directors on 29 February

2024 and were signed on its behalf by:

Jim Johnson Bruce Ferguson

Director Director Registered number: 00974568

Hunting PLC Annual Report and Accounts 2023 176Strategic Report Corporate Governance Financial Statements Other Information

				Year ended 31 December 2023
						Total
				Other		attributable	Non-
		Share	Share	components	Retained	to owners of	controlling	Total
		capital	premium	of equity	earnings	the parent	interests	equity
	Notes	$m	$m	$m	$m	$m	$m	$m
At 1 January 2023		66.5	153.0	15.8	609.3	844.6	1.6	846.2
Prot for the year		–	–	–	117.1	117.1	1.9	119.0
Other comprehensive income/(expense)		–	–	3.3	–	3.3	(0.2)	3.1
Total comprehensive income		–	–	3.3	117.1	120.4	1.7	122.1
Transfer of cash ow hedging losses to the initial carrying value of hedged items		–	–	0.3	–	0.3	–	0.3
Dividends paid to Hunting PLC shareholders	36	–	–	–	(15.0)	(15.0)	–	(15.0)
Treasury shares:
– purchase of treasury shares	35	–	–	–	(9.0)	(9.0)	–	(9.0)
– disposal of treasury shares		–	–	–	0.3	0.3	–	0.3
Share options and awards:
– value of employee services		–	–	12.3	–	12.3	–	12.3
– discharge		–	–	(8.3)	7.9	(0.4)	–	(0.4)
– taxation		–	–	–	0.3	0.3	–	0.3
Transfer between reserves		–	–	(14.5)	14.5	–	–	–
At 31 December 2023		66.5	153.0	8.9	725.4	953.8	3.3	957.1

				Year ended 31 December 2022
						Total
				Other		attributable	Non-
		Share	Share	components	Retained	to owners of	controlling	Total
		capital	premium	of equity	earnings	the parent	interests	equity
	Notes	$m	$m	$m	$m	$m	$m	$m
At 1 January 2022		66.5	153.0	38.0	612.4	869.9	1.4	871.3
(Loss)/prot for the year		–	–	–	(4.6)	(4.6)	0.9	(3.7)
Other comprehensive (expense)/income		–	–	(8.8)	0.1	(8.7)	(0.7)	(9.4)
Total comprehensive (expense)/income		–	–	(8.8)	(4.5)	(13.3)	0.2	(13.1)
Transfer of cash ow hedging gains to the initial carrying value of hedged items		–	–	(0.1)	–	(0.1)	–	(0.1)
Dividends paid to Hunting PLC shareholders	36	–	–	–	(13.6)	(13.6)	–	(13.6)
Treasury shares:
– purchase of treasury shares	35	–	–	–	(7.9)	(7.9)	–	(7.9)
– disposal of treasury shares		–	–	–	0.2	0.2	–	0.2
Share options and awards:
– value of employee services		–	–	9.4	–	9.4	–	9.4
– discharge		–	–	(9.1)	8.9	(0.2)	–	(0.2)
– taxation		–	–	–	0.2	0.2	–	0.2
Transfer between reserves		–	–	(13.6)	13.6	–	–	–
At 31 December 2022		66.5	153.0	15.8	609.3	844.6	1.6	846.2

i. An analysis of other components of equity is provided in note 34.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2023

Hunting PLC Annual Report and Accounts 2023 177Strategic Report Corporate Governance Financial Statements Other Information

Consolidated Statement of Cash Flows

For the year ended 31 December 2023

Notes

		2023	2022
		$m	$m
Operating activities
Operating prot		61.0	2.0
Adjusting items (NGM A)		–	12.6
Depreciation, amortisation and impairment (NGM C)		42.0	37.4
EBITDA (NGM C)		103.0	52.0
Share-based payment expense	37	13.5	9.9
Increase in inventories		(56.7)	(72.3)
Increase in receivables		(19.2)	(76.2)
Increase in payables		20.9	61.9
Increase in provisions		0.5	0.2
Net taxation paid		(9.1)	(3.9)
Net (gain)/loss on disposal of property, plant and equipment		(1.7)	0.3
Net gain on curtailment of leases		–	(3.1)
Proceeds from disposal of property, plant and equipment
held for rental		–	0.2
Purchase of property, plant and equipment
held for rental (NGM N)		(0.6)	(0.5)
Legal fees to defend patent infringement claim		–	(5.6)
Other non-cash items		(1.3)	0.3
Net cash inow/(outow) from operating activities		49.3	(36.8)
Investing activities
Interest received		0.7	1.2
Proceeds from disposal of property, plant and equipment		1.9	6.6
Increase in current investments		–	6.7
Dividend received from associates	16	0.6	–
Investment in associates and joint ventures	16	(1.6)	(3.5)
Purchase of property, plant and equipment (NGM N)		(23.1)	(15.9)
Purchase of intangible assets		(10.9)	(5.6)
Net cash outow from investing activities		(32.4)	(10.5)

Notes

		2023	2022
		$m	$m
Financing activities
Interest and bank fees paid		(8.0)	(4.1)
Payment of lease liabilities, principal and interest		(10.4)	(8.0)
Net proceeds on disposal of lease liabilities		–	2.2
Increase in bank borrowings		42.1	2.9
Dividends paid to Hunting PLC shareholders	36	(15.0)	(13.6)
Purchase of treasury shares	35	(9.0)	(7.9)
Proceeds on disposal of treasury shares		0.3	0.2
Net cash outow from nancing activities		–	(28.3)
Net increase/(decrease) in cash and cash equivalents		16.9	(75.6)
Cash and cash equivalents at the beginning of the year		27.3	107.4
Effect of foreign exchange rates		(0.1)	(4.5)
Cash and cash equivalents at the end of the year		44.1	27.3
Cash and cash equivalents at the end of the year comprise:
Cash and cash equivalents included in current assets	21	45.5	29.4
Bank overdrafts included in borrowings	25	(1.4)	(2.1)
		44.1	27.3

Hunting PLC Annual Report and Accounts 2023 178Strategic Report Corporate Governance Financial Statements Other Information

Notes to the Consolidated Financial Statements

1. Basis of Preparation

Hunting PLC is a premium-listed public company limited by shares, with its Ordinary shares quoted

on the London Stock Exchange. Hunting PLC was incorporated in the United Kingdom under the

Companies Act and is registered in England and Wales. The address of the Company’s registered

ofce is 3fice is 30 Panton Street, London, SW1Y 4AJ. The principal activities of the Group and the nature of

the Group’s operations are set out in the Strategic Report on pages 2 to 108. The nanhe financial statements

consolidate those of Hunting PLC (the “Company”) and its subsidiaries (together referred to as the

“Group”), including the Group’s interests in associates and joint ventures and are presented in US

Dollars, the currency of the primary economic environment in which the Group operates.

The consolidated nancial staed financial statements have been prepared in accordance with United Kingdom

adopted international accounting standards and in conformity with the requirements of the Companies

Act 2006. The nane financial statements have been prepared on a going concern basis under the historical

cost convention as modiedified by the revaluation of the US deferred compensation plan and those

nafinancial assets and nand financial liabilities held at fair value (note 29). The Board’s consideration of the

applicability of the going concern basis is detailed further in the Strategic Report on page 107.

The principal accounting policies applied in the preparation of these nase financial statements are set out

in note 40. These policies have been consistently applied to all the years presented.

Critical Judgements and Key Assumptions

Critical judgements are those that the Directors have made in the process of applying the Group’s

accounting policies and that have the most signicant effect on tst significant effect on the amounts recognised in the

Group’s nas financial statements. Key assumptions are those concerning future expectations and other

key sources of estimation uncertainty at the end of the reporting period and which may have a

signicant risk osignificant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

the next nancial yearxt financial year.

Critical judgements were made in the following areas:

• In determining if the contractual terms for various signicant Sficant Subsea contracts met the requirements

for over time revenue recognition, as described in note 40; and

• In considering whether the conditions were appropriate to recognise deferred tax assets

(see note 9);

The key estimates used in the preparation of the accounts were:

• The estimates of future cash ows in thsh flows in the budget and extended forecasts considered in the

impairment test for cash generating units and the recoverable amounts (see note 15); and

• Estimates of future turn rates by inventory line item in determining inventory provisions (see note 20).

The Directors believe that there are no other critical judgements or estimates applied in the preparation

of the consolidated nancial sted financial statements.

Climate Change

The impact of climate change is presented in the Strategic Report on pages 82 to 95.

The Directors have considered the potential impact that climate change could have on the nancial he financial

statements of the Group and recognise that climate change is a principal risk that the Group will

monitor and react to appropriately. In the judgement of the Directors, the external mid- and long-term

forecasts used by the Company incorporate climate change developments, and support the view that

there will be robust demand for the Group’s oil- and gas-based products for a signicnificant time span.

The Group utilises mid-term forecasts to consider whether there are any concerns regarding the

carrying values or expected lives of longer-lived assets, including goodwill. Climate-related risks are

not expected to have a signignificant adverse impact on the Group’s revenue or EBITDA in the medium-

term. The Directors also believe there is signicant opera is significant operational adaptability in the Group’s asset base

to move into other non-hydrocarbon product lines, if required.

Hunting PLC Annual Report and Accounts 2023 179Strategic Report Corporate Governance Financial Statements Other Information

New and Amended Standards adopted by the Group

IFRS 17 Insurance Contracts and a number of amended standards became effective for the nance financial

year beginning on 1 January 2023; however, the Group did not have to change its accounting policies

or make retrospective adjustments as a result of adopting these.

Since IFRS 17 applies to all insurance contracts issued by an entity (with limited scope exclusions),

its adoption may have an effect on non-insurers such as Hunting PLC. The Group carried out an

assessment of its contracts and operations and concluded that the adoption of IFRS 17 has had no

effect on the consolidated nancial stat financial statements.

Future Standards, Amendments and Interpretations

The following standards, amendments and interpretations are effective subsequent to the year-end,

and have not been early adopted. The Directors do not expect that the adoption of the standards

and amendments listed below will have a material impact on the nt on the financial statements of the Group

in future periods.

• IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

• IFRS S2 Climate-related Disclosures

• Amendment to IAS 1: Classication o: Classification of Liabilities as Current or Non-current Liabilities

• Amendment to IAS 1: Non-current Liabilities with Covenants

• Amendment to IAS 7 and IFRS 7: Supplier Financing Arrangements

• Amendment to IFRS 16: Lease Liability in a Sale and Leaseback

i. Not yet endorsed by the UK as at the date of authorisation of the nf the financial statements.

ii. Mandatory adoption date and effective date for the Company is 1 January 2024.

2. Segmental Reporting

For the year ended 31 December 2023, the Group has been reporting on ve opg on five operating segments

in its internal management reports, which are used to make strategic decisions by the Hunting PLC

Board, the Group’s Chief Operating Decision Maker. The Hunting PLC Board examines the Group’s

performance mainly from a geographic perspective, based on the location of the operating activities,

as well as by product group, in order to understand the drivers of Group performance and trends.

Due to their size and/or nature of their operations, Hunting Titan and Subsea Technologies are

reported separately.

From 1 January 2023, the Group has reported Subsea Technologies as a separate operating segment

as management believes this will be a growth area for the Group. Hunting’s presence within the

subsea segment of the oil and gas industry has been steadily growing since 2019, starting with the

acquisition of RTI Energy Systems in August 2019, now called Subsea Spring, followed by the

acquisition of Enpro Subsea in February 2020. Subsea Technologies was previously reported as part

of the North America operating segment. The segmental results for 2022 have been restated to show

Subsea Technologies separately from North America. There has been no impact on external revenue,

total segment revenue or inter-segment revenue following the restatement.

The Board assesses the performance of the operating segments based on revenue and adjusted

operating results. Adjusted operating result is reported operating prot profit excluding adjusting items

(see NGM A).

Finance income and nand finance expense are not allocated to operating segments as this type of activity

is overseen by the Group’s central treasury function which manages the funding position of the Group.

Inter-segment sales are priced in-line with the transfer pricing policy on an arm’s length basis and are

eliminated on consolidation. Costs and overheads are apportioned to the operating segments on the

basis of time attributed to those operations by senior executives.

Accounting policies used for segmental reporting reect those usedeflect those used for the Group. The domicile of

Hunting PLC is the UK.

Notes to the Consolidated Financial Statements continued

1. Basis of Preparation continued

Hunting PLC Annual Report and Accounts 2023 180Strategic Report Corporate Governance Financial Statements Other Information

(a) Segment Revenue and Prod Profit

			2023
	Total	Inter-	Total	Adjusted		Reported
	segment	segment	external	operating	Adjusting	operating
	revenue	revenue	revenue	result	items	result
	$m	$m	$m	$m	$m	$m
Hunting Titan	259.2	(9.0)	250.2	12.7	–	12.7
North America	374.7	(35.4)	339.3	34.1	–	34.1
Subsea Technologies	98.6	–	98.6	8.0	–	8.0
EMEA	88.2	(1.5)	86.7	(2.3)	–	(2.3)
Asia Paciccific	157.6	(3.3)	154.3	8.5	–	8.5
Total	978.3	(49.2)	929.1	61.0	–	61.0
Net Net finance expense				(10.4)	–	(10.4)
Share of associates’ and joint ventures’ results				(0.6)	–	(0.6)
Prot beofit before tax				50.0	–	50.0

			2022
	Total	Inter-	Total	Adjusted		Reported
	segment	segment	external	operating	Adjusting	operating
	revenue	revenue	revenue	result	items	result
	$m	$m	$m	$m	$m	$m
Hunting Titan	266.0	(8.2)	257.8	15.9	(5.6)	10.3
North America	280.7	(24.6)	256.1	9.2	–	9.2
Subsea Technologies	69.0	–	69.0	(1.1)	(7.0)	(8.1)
EMEA	71.5	(2.2)	69.3	(6.0)	–	(6.0)
Asia Paciccific	80.4	(6.8)	73.6	(3.4)	–	(3.4)
Total	767.6	(41.8)	725.8	14.6	(12.6)	2.0
Net Net finance expense				(1.7)	–	(1.7)
Share of associates’ and joint ventures’ results				(2.7)	–	(2.7)
Protofit/(loss) before tax				10.2	(12.6)	(2.4)

i. The segmental results for 2022 have been restated to show Subsea Technologies separate from North America.

Notes to the Consolidated Financial Statements continued

2. Segmental Reporting continued

Hunting PLC Annual Report and Accounts 2023 181Strategic Report Corporate Governance Financial Statements Other Information

(a) Segment Revenue and Prot continued

Adjusting items by operating segment:

		2022
	Hunting	Subsea
	Titan	Technologies	Total
	$m	$m	$m
Legal fees	(5.6)	–	(5.6)
Impairment of goodwill	–	(7.0)	(7.0)
	(5.6)	(7.0)	(12.6)

A breakdown of external revenue by products and services is presented below:

	2023	2022
	$m	$m
Perforating Systems	243.8	251.9
OCTG	395.8	258.8
Advanced Manufacturing	112.1	75.1
Subsea	98.6	69.0
Other Manufacturing	78.8	71.0
Total	929.1	725.8

i. The Other Manufacturing product group comprises the intervention tools and other product groups that were reported separately in 2022.

Revenue from products is further analysed between:
Oil and gas	853.2	678.2
Non-oil and gas	75.9	47.6
Total	929.1	725.8

(b) Other Segment Items

		2023				2022
			Impairment	Impairment			Impairment	Impairment
			of non-current	of current			of non-current	of current
	Depreciation	Amortisation	assets	assets	Depreciation ii	Amortisation	assets	assets
	$m	$m	$m	$m	$m	$m	$m	$m
Hunting Titan	(7.5)	(1.7)	–	(2.9)	(7.5)	(1.3)	–	0.1
North America	(17.9)	(2.0)	(0.2)	(1.6)	(16.5)	(1.0)	–	1.1
Subsea Technologies	(2.4)	(1.9)	(1.4)	(0.2)	(2.7)	(1.8)	(7.0)	0.4
EMEA	(3.4)	(0.6)	–	(0.3)	(3.6)	(0.3)	–	(1.7)
Asia Paciccific	(2.6)	(0.4)	–	(1.6)	(2.7)	–	–	–
Total	(33.8)	(6.6)	(1.6)	(6.6)	(33.0)	(4.4)	(7.0)	(0.1)

iii

i. The segmental results for 2022 have been restated to show Subsea Technologies separate from North America.

ii. Depreciation in 2023 comprises depreciation of property, plant and equipment of $27.2m (2022 – $26.6m) and depreciation of right-of-use assets of $6.6m (2022 – $6.4m).

iii. Impairment of non-current assets comprises impairment of goodwill of $1.4m (2022 – $7.0m) and impairment of right-of-use assets of $0.2m (2022 – $nil).

iv. Impairment of current assets comprises the net impairment of inventories of $5.7m (2022 – $0.7m) and the net impairment of trade and other receivables of $0.9m (2022 – $0.6m net reversal).

Notes to the Consolidated Financial Statements continued

2. Segmental Reporting continued

Hunting PLC Annual Report and Accounts 2023 182Strategic Report Corporate Governance Financial Statements Other Information

Information on the physical location of non-current assets is presented below. The allocated non-current assets below exclude deferred tax assets.

	2023	2022
	$m	$m
Hunting Titan – US	177.2	178.8
Hunting Titan – Canada	2.4	2.2
Hunting Titan – Other	2.7	1.3
Hunting Titan	182.3	182.3
North America – US	213.4	211.1
North America – Canada	0.7	0.8
North America	214.1	211.9
Subsea Technologies – US	38.0	38.2
Subsea Technologies – UK	21.4	23.7
Subsea Technologies	59.4	61.9
EMEA – UK	19.6	19.7
EMEA – Rest of Europe	5.0	5.5
EMEA – Middle East	4.3	1.5
EMEA	28.9	26.7
Asia Pacic – Chinacific – China	9.4	10.6
Asia Pacic – Indonesiacific – Indonesia	2.9	2.9
Asia Pacic – Singaporecific – Singapore	5.6	5.3
Asia Paciific	17.9	18.8
Unallocated assets:
Deferred tax assets	93.1	13.7
Total non-current assets	595.7	515.3

i. The segmental results for 2022 have been restated to show Subsea Technologies separate from North America.

ii. The value of non-current assets located in the UK, the Group’s country of domicile, is $41.0m (2022 – $43.4m).

Revenue from external customers attributable to the UK, the Group’s country of domicile, included in the Subsea Technologies and EMEA operating segments, is $34.7m (2022 – $34.5m). Revenue

attributable to foreign countries totalled $894.4m (2022 – $691.3m). Revenue attributable to the US, the Group’s largest individual foreign country where revenue is earned, is $619.8m (2022 – $517.4m),

which represents 67% (2022 – 71%) of the Group’s revenue from external customers. Revenue attributed to an individual country is based on where the invoice is raised, however, customers can either

be domestic or international customers.

(d) Major Customer

Included in external revenue is revenue of $79.8m (2022 – $63.5m) which arose from sales to the Halliburton Company Group (“Halliburton”), the Group’s largest customer. This represents 9% (2022 – 9%)

of the Group’s revenue from external customers. All of Hunting’s operating segments except for Subsea Technologies have beneted from benefited from trading with Halliburton. No single customer contributed more than

10% of the Group’s external revenue in either 2023 or 2022.

Notes to the Consolidated Financial Statements continued

2. Segmental Reporting continued

Hunting PLC Annual Report and Accounts 2023 183Strategic Report Corporate Governance Financial Statements Other Information

3. Revenue

In the following tables, a breakdown of the Group’s different revenue streams by segment has been

given, including the disaggregation of revenue from contracts with customers.

		2023
	Revenue			Total
	from contracts	Rental	Other	external
	with customers	revenue	revenue	revenue
	$m	$m	$m	$m
Hunting Titan	248.9	1.3	–	250.2
North America	336.6	1.7	1.0	339.3
Subsea Technologies	98.6	–	–	98.6
EMEA	82.0	4.7	–	86.7
Asia Paciccific	154.1	0.2	–	154.3
Total	920.2	7.9	1.0	929.1
		2022
	Revenue			Total
	from contracts	Rental	Other	external
	with customers	revenue	revenue	revenue
	$m	$m	$m	$m
Hunting Titan	256.5	1.3	–	257.8
North America	248.8	2.2	5.1	256.1
Subsea Technologies	69.0	–	–	69.0
EMEA	64.8	4.5	–	69.3
Asia Paciccific	73.5	0.1	–	73.6
Total	712.6	8.1	5.1	725.8

Revenue is typically recognised for products when the product is shipped or made available to

customers for collection, or over time as control of the product is transferred to customers, and for

services either on completion of the service or, at a minimum, monthly for services covering more than

one month. The majority of the Group’s revenue is recognised at a point in time. The Group’s revenue

recognised over time is within the North America and Subsea Technologies operating segments.

The amount of consideration is not adjusted for the effects of a signicant  a significant financing component as,

at contract inception, the period between when the entity transfers a promised good or service to

a customer and when the customer pays for that good or service will be one year or less.

4. Net Operating Income and Other Expenses

	2023	2022
	$m	$m
Operating income from leasing assets (note 24)	2.7	2.1
Gain on disposal of property, plant and equipment	2.2	1.1
Gain on curtailment of leases	–	3.2
Government grants	0.2	0.3
Foreign exchange gains	1.1	1.6
Other income	1.8	1.6
Total operating income	8.0	9.9
Loss on disposal of property, plant and equipment	(0.5)	(1.4)
Foreign exchange losses	(0.3)	(1.9)
Research and development costs expensed	(4.7)	(4.8)
Other operating expenses	(0.1)	(0.2)
Total other operating expenses	(5.6)	(8.3)
Net operating income and other expenses	2.4	1.6

iii

i. Includes fair value gains on derivatives designated in a cash osh flow hedge of $0.3m (2022 – $0.1m losses).

ii. Includes fair value gains on derivatives not designated in a hedge of $0.1m (2022 – $0.1m).

iii. Includes fair value gains on derivatives designated in a fair value hedge of $nil (2022 – $0.1m).

iv. Includes fair value losses on derivatives not designated in a hedge of $0.1m (2022 – $0.1m) and $nil (2022 – $0.1m) loss on curtailment

of leases.

During 2022, the Group’s Asia Pacics Asia Pacific operating segment completed the relocation of its facilities to

a single site in the Tuas port region of Singapore. As a result of this relocation, the Group disposed of

the related lease liabilities and right-of-use assets, recording a net gain of $2.4m to exit the lease at

Benoi Road. This gain together with other lease curtailments resulted in a total gain of $3.2m during

the year and there was also a $0.1m loss on curtailment of leases.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 184Strategic Report Corporate Governance Financial Statements Other Information

5. Adjusting Items

Due to their size and nature, the following items have been disclosed separately, as required by IAS 1.

	2023
	Gross	Tax
	amount	impact
	$m	$m
Recognition of US deferred tax assets	–	83.1

During the year, previously unrecognised US deferred tax assets of $83.1m were recognised on the

balance sheet, reecti, reflecting the improved protability in profitability in the US which resulted in the criteria for

recognition being met (note 9). The related tax credit in the income statement has been presented as

an adjusting item (NGM A).

	2022
	Gross	Tax
	amount	impact
	$m	$m
Legal fees	(5.6)	–
Impairment of goodwill	(7.0)	–
Total	(12.6)	–

During 2022, Hunting incurred legal fees of $5.6m in defending a claim made by a competitor against

the Group relating to a patent infringement. These costs were included in administrative expenses.

No tax arose in relation to these legal fees due to the fact deferred tax was not recognised in relation

to this jurisdiction. Additionally, following the annual review of goodwill, an impairment charge of $7.0m

was recognised in relation to Enpro Subsea. Further details can be found in note 15. The impairment

charge was included in administrative expenses. No tax arose because the impairment of this goodwil l

was not a tax deductible expense.

6. Operating Proting Profit

The following items were (charged)/credited in arriving at operating prot:g profit:

	2023	2022
	$m	$m
Staff costs (note 7)	(218.5)	(194.1)
Depreciation of property, plant and equipment (note 11)	(27.2)	(26.6)
Amortisation of intangible assets (included in cost of sales
and administrative expenses) (note 14)	(6.6)	(4.4)
Impairment of goodwill (included in administrative expenses) (note 13)	(1.4)	(7.0)
Net gain/(loss) on disposal of property, plant and equipment (note 4)	1.7	(0.3)
Net lease charges included in operating prot (ng profit (note 24)	(8.6)	(5.1)
Research and development expensed (note 4)	(4.7)	(4.8)

Fees payable to the Group’s independent auditor and its associates are for:

	2023	2022
	$m	$m
The audit of these nancialf these financial statements	(2.8)	(2.8)
The audit of the nancial stat financial statements of the Company’s subsidiaries	(0.5)	(0.6)
Total audit	(3.3)	(3.4)
Audit-related assurance services	(0.2)	(0.2)
Total audit and audit-related services	(3.5)	(3.6)

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 185Strategic Report Corporate Governance Financial Statements Other Information

7. Employees

	2023	2022
	$m	$m
Wages and salaries (including annual cash bonuses)	(183.4)	(164.4)
Social security costs	(13.6)	(12.7)
Share-based payments (note 37)	(13.5)	(9.9)
Pension costs
– de– defined contribution schemes (note 32)	(8.2)	(7.2)
– unfunded dened defined benet schefit schemes – US and Middle East (note 32)	(0.3)	(0.3)
Staff costs for the year	(219.0)	(194.5)

Staff costs for the year included in the nad in the financial statements are as follows:

	2023	2022
	$m	$m
Total staff costs included in operating prot (g profit (note 6)	(218.5)	(194.1)
Staff costs capitalised as R&D	(0.5)	(0.4)
	(219.0)	(194.5)

The average monthly number of employees by geographical area (including executive Directors) during

the year was:

	2023	2022
	Number	Number
North America	1,672	1,486
Europe	261	223
Asia Paciccific	324	301
Central America, Middle East and Africa	104	92
	2,361	2,102

The average monthly number of employees by operating segment (including executive Directors)

during the year was:

	2023	2022
	Number	Number
Hunting Titan	647	595
North America	868	760
Subsea Technologies	180	149
EMEA	261	226
Asia Paciccific	324	301
Central	81	71
	2,361	2,102

The actual number of employees at the year-end was 2,420 (2022 – 2,258) .

Key management comprises the Board and the ten members of the Executive Committee who acted

during the year (2022 – eleven). Their aggregate remuneration in the year was:

	2023	2022
	$m	$m
Salaries, annual cash bonuses and short-term employee benet employee benefits	(9.8)	(10.8)
Post-employment benets-employment benefits	(0.4)	(0.4)
Share-based payments	(5.7)	(3.4)
	(15.9)	(14.6)

Remuneration of the Board, included as part of key management compensation, can be found in the

Annual Report on Remuneration on pages 146 to 154. The Annual Report on Remuneration disclosures

do not include Executive Committee members who are not part of the Board and disclose share

scheme remuneration on a vested rather than an accruals basis.

Short-term employee benetsyee benefits comprise healthcare insurance, company cars and fuel benety cars and fuel benefits.

Post-employment benets comprise-employment benefits comprise employer pension contributions. Share-based payments

comprise the charge to the consolidated income statement.

The total amounts for Directors’ remuneration in accordance with Schedule 5 to the Accounting

Regulations were as follows:

	2023	2022
	$m	$m
Salaries, annual cash bonuses and short-term employee benet employee benefits	(4.0)	(3.9)
Gains on exercise of share awards	(1.2)	(0.2)
Post-employment benets-employment benefits	(0.2)	(0.2)
	(5.4)	(4.3)

The Group contributes on behalf of the Chief Executive to a US 401k deferred savings plan and an

additional deferred compensation scheme. The Finance Director receives an annual cash sum in lieu

of contributions to a company pension scheme.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 186Strategic Report Corporate Governance Financial Statements Other Information

8. Net Finance Expense

	2023	2022
	$m	$m
Finance income:
Interest received on bank balances and deposits	0.2	0.4
Foreign exchange gains	0.1	1.3
Fair value gains on non-hedging derivative nancialtive financial instruments	0.4	0.8
Other nance incomeOther finance income	0.2	0.5
	0.9	3.0
Finance expense:
Interest on lease liabilities	(1.3)	(1.2)
Bank fees and commissions	(2.9)	(2.1)
Interest on bank borrowings	(5.2)	–
Foreign exchange losses	(0.6)	(1.0)
Other nance finance expense	(1.3)	(0.4)
	(11.3)	(4.7)
Net nanceNet finance expense	(10.4)	(1.7)

i. Foreign exchange gains include gains of $nil (2022 – $0.1m) in relation to lease liabilities.

ii. Other nanr finance expense includes fair value losses on derivatives not designated in a hedge of $0.2m (2022 – $0.2m) and fair value losses on

derivatives designated in a cash ow hsh flow hedge of $0.1m (2022 – $nil ) .

9. Taxation

	2023	2022
	$m	$m
Current tax:
Current year charge	(8.4)	(4.3)
Adjustments in respect of prior years	0.4	(0.7)
	(8.0)	(5.0)
Deferred tax:
Origination and reversal of temporary differences	(6.7)	3.5
Change in tax rates	–	(0.2)
Adjustments in respect of prior years	0.6	0.4
Recognition of US deferred tax assets	83.1	–
	77.0	3.7
Taxation credit/(charge)	69.0	(1.3)

The tax credit for the year was $69.0m (2022 – $1.3m charge) and the effective tax rate (“ETR”)

was minus 138% (2022 – minus 54%). The Group’s ETR is signicnificantly different to that which might

be expected from prevailing jurisdictional rates as the recognition of the US deferred tax assets in

the year distorts the IFRS reported ETR considerably. In addition, the Group’s ETR is distorted when

deferred tax is not fully recognised in loss-making jurisdictions, as was the situation in 2022.

When adjusting items are excluded, the Group’s adjusted ETR is 28% (2022 – 13%). The calculation

of the adjusted tax charge and adjusted effective tax rate can be found in NGM D.

The adjustments in respect of prior years within both current tax and deferred tax, totalling a credit

of $1.0m (2022 – $0.3m charge) mainly relate to true-ups of prior year balances.

The UK standard rate of corporation tax increased from 19% to 25% from 1 April 2023 and UK

deferred tax balances have therefore all been calculated at 25%.

The table below reconciles the tax on the Group’s protrofit/(loss) before tax to a weighted average tax

rate for the Group based on the tax rates applicable to each entity in the Group. A weighted average

applicable rate for the year of 23% (2022 – 4%) was used as this reeis reflects the applicable rates for the

countries applied to their respective prots/lfits/losses in the year. The total tax credit/(charge) for the year

is different to the weighted average rate of tax of 23% (2022 – 4%) for the following reasons:

	2023	2022
	$m	$m
Protofit/(loss) before tax	50.0	(2.4)
Tax at 23% (2022 – 4%)	(11.5)	0.1
Permanent differences including tax credits	(2.7)	(4.7)
Current year deferred tax not recognised	(0.6)	(1.5)
Recognition of previously unrecognised deferred taxes	83.1	5.3
Difference in tax rates	(0.3)	(0.2)
Adjustments in respect of prior years	1.0	(0.3)
Taxation credit/(charge)	69.0	(1.3)

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 187Strategic Report Corporate Governance Financial Statements Other Information

Tax effects relating to each component of other comprehensive income were as follows:

		2023			2022
	Before tax	Tax credited	After tax	Before tax	Tax charged	After tax
	$m	$m	$m	$m	$m	$m
Exchange adjustments	3.6	–	3.6	(9.9)	–	(9.9)
Fair value (losses)/gains arising on cash ow hesh flow hedges during the year	(0.3)	–	(0.3)	0.4	(0.1)	0.3
Fair value (gains)/losses reclassiesified to proo profit or loss	(0.3)	0.1	(0.2)	0.1	–	0.1
Remeasurement of denedf defined benet pension schemes benefit pension schemes	–	–	–	0.1	–	0.1
	3.0	0.1	3.1	(9.3)	(0.1)	(9.4)

The tax relating to the components of other comprehensive income comprises a deferred tax credit of $0.1m (2022 – $0.1m charge).

Tax-related Judgements

The Group is subject to income taxes in numerous jurisdictions and signicaificant judgement is required in determining the worldwide provision for those taxes, as tax legislation can be complex and open

to different interpretation. Deferred tax assets are only recognised to the extent that it is probable that future taxable proable profits will be available, against which the temporary differences can be utilised. The

recoverability of deferred tax assets is supported by deferred tax liabilities against which the reversal can be offset as well as the expected level of future prots. The profits. This is considered by jurisdiction, or by entity,

dependent on the tax laws of the jurisdiction. Where there is both a history of loss making and continued loss making in the year, stronger supporting evidence is required to meet recognition policy criteria.

Supporting evidence reviewed includes: whether actual results, when excluding non-recurring items, meet or exceed budget; the level of taxable prots gee profits generated in the base case and downside case of

longer-term forecasts; and the nature of how the deferred tax assets arose and how this relates to the ongoing activities of the business.

The recognition of deferred tax assets as at 31 December 2023 has been based on the forecast accounting prots in thg profits in the 2024 and 2025 Budget and the extended forecast period as presented to the Board.

This is the same forecast that is used to derive cash ows for thsh flows for the impairment testing of non-current assets, per note 15. For periods beyond the extended forecast period, prots have bod, profits have been assumed to grow

in a manner consistent with the terminal growth rate assumptions used for impairment testing. In addition, a risk factor has been applied to reduce future prots fore profits for the extended forecast period and beyond.

These adjustments are to reents are to reflect the potential decrease in reliability of forecasts for future periods beyond the Board-approved budget period.

Historical tax losses make up the majority of the deductible temporary differences. These losses mainly arose from varying factors including non-recurring events such as losses arising at the start of newly

formed businesses and losses arising from periods of economic downturn, such as during the COVID-19 pandemic. Historically, the majority of the deferred tax not recognised in the Group was in relation to

deferred tax arising in the US. As a result of the recognition of deferred tax in the US in the current year, the level of deferred tax not recognised at 31 December 2023 has signicaificantly reduced. Management

will continue to monitor the position in those jurisdictions where deferred tax is not recognised.

The main jurisdiction where there is a change in deferred tax recognition is the US. Previously unrecognised deferred tax assets, in respect of historical tax losses and other deductible temporary differences

in the US, have been recognised in the period due to taxable prots arirofits arising in the year as well as continued forecast improved protroved profitability in future periods. In accordance with IAS 12 and previous years, partial

recognition of the deferred tax arising on tax losses is supported by the taxable temporary differences arising on goodwill and depreciable xed asle fixed assets. Applying IAS 12 recognition criteria, the recognition of

the remaining deferred tax assets is supported by the forecast protat profitability in the next four years. Recognition of the US deferred tax asset is dependent on the accuracy of the budget and extended forecast

period. In assessing the recoverability of deferred tax assets a sensitivity analysis is applied to the extended forecast period accounting protsofits, to consider a plausible downside scenario. Under the sensitivity

analysis, the recovery period of the previously unrecognised deferred tax assets now recognised in the year, would be extended by two years.

Notes to the Consolidated Financial Statements continued

9. Taxation continued

Hunting PLC Annual Report and Accounts 2023 188Strategic Report Corporate Governance Financial Statements Other Information

10. Earnings/(Loss) per Share

Basic earnings/(loss) per share (“EPS/(LPS)”) is calculated by dividing earnings/(loss) attributable to Ordinary shareholders by the weighted average number of Ordinary shares outstanding during the year.

For diluted earnings/(loss) per share, the weighted average number of outstanding Ordinary shares was adjusted to assume conversion of all dilutive potential Ordinary shares. Dilution arises through the

possible issue of shares to satisfy awards made under the Group’s long-term incentive plans.

Reconciliations of the earnings/(loss) and weighted average number of Ordinary shares used in the calculations are set out below:

		2023			2022
	Earnings attributable	Basic weighted		Loss attributable	Basic weighted
	to Ordinary	average number of	Earnings	to Ordinary	average number of	Loss
	shareholders	Ordinary shares	per share	shareholders	Ordinary shares	per share
	$m	millions	cents	$m	millions	cents
Basic EPS/(LPS)	117.1	158.6	73.8	(4.6)	160.3	(2.8)
Effect of dilutive long-term incentive plans	–	8.7	(3.8)	–	9.8	–
Diluted EPS/(LPS)	117.1	167.3	70.0	(4.6)	170.1	(2.8)

i. For the year ended 31 December 2022, the Group reported a loss which meant the effect of dilutive long-term incentive plans was anti-dilutive (i.e. they reduced the loss per share). Therefore, they were disregarded in the calculation of diluted loss per share.

The calculation of adjusted earnings/(loss) per share is presented in NGM B.

11. Property, Plant and Equipment

			2023
		Plant, machinery		Oil and gas
	Land and	and motor		exploration and
	buildings	vehicles	Rental tools	development	Total
	$m	$m	$m	$m	$m
Cost:
At 1 January 2023	255.5	331.7	24.1	112.3	723.6
Exchange adjustments	2.0	1.5	0.8	–	4.3
Additions	1.0	21.4	0.6	0.1	23.1
Disposals	(0.1)	(9.6)	(0.5)	(112.4)	(122.6)
Reclassication frReclassification from inventories (note 20)	–	–	1.5	–	1.5
ReclassicationsReclassifications	(0.1)	0.3	(0.2)	–	–
At 31 December 2023	258.3	345.3	26.3	–	629.9
Accumulated depreciation and impairment:
At 1 January 2023	(77.9)	(262.9)	(16.2)	(109.9)	(466.9)
Exchange adjustments	(1.3)	(1.3)	(0.5)	–	(3.1)
Charge for the year	(6.3)	(16.7)	(2.2)	(2.0)	(27.2)
Disposals	–	9.4	0.5	111.9	121.8
ReclassicationsReclassifications	–	(0.1)	0.1	–	–
At 31 December 2023	(85.5)	(271.6)	(18.3)	–	(375.4)
Net book amount	172.8	73.7	8.0	–	254.5

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 189Strategic Report Corporate Governance Financial Statements Other Information

			2022
		Plant, machinery		Oil and gas
	Land and	and motor		exploration and
	buildings	vehicles	Rental tools	development	Total
	$m	$m	$m	$m	$m
Cost:
At 1 January 2022	267.3	338.2	24.7	111.4	741.6
Exchange adjustments	(4.5)	(3.5)	(1.5)	–	(9.5)
Additions	4.7	10.9	0.5	0.9	17.0
Disposals	(12.0)	(13.9)	(1.2)	–	(27.1)
Reclassication frReclassification from inventories (note 20)	–	–	1.6	–	1.6
At 31 December 2022	255.5	331.7	24.1	112.3	723.6
Accumulated depreciation and impairment:
At 1 January 2022	(80.2)	(261.2)	(16.4)	(109.4)	(467.2)
Exchange adjustments	3.1	2.8	0.9	–	6.8
Charge for the year	(6.0)	(18.2)	(1.9)	(0.5)	(26.6)
Disposals	5.2	13.7	1.2	–	20.1
At 31 December 2022	(77.9)	(262.9)	(16.2)	(109.9)	(466.9)
Net book amount	177.6	68.8	7.9	2.4	256.7

The net book amount of property, plant and equipment at 1 January 2022 was $274.4m.

During the year, the Group disposed of oil and gas exploration and development assets with a net book value of $0.5m (2022 – $2.4m). These legacy assets were owned by Tenkay Resources, Inc and

reported as part of the North America operating segment.

Included in the net book amount is expenditure relating to assets in the course of construction of $0.2m (2022 – $0.1m) for buildings and $0.7m (2022 – $0.9m) for plant and machinery.

Group capital expenditure committed for the purchase of property, plant and equipment, but not provided for in these n these financial statements, amounted to $7.0m as at 31 December 2023 (2022 – $3.7m).

The net book amount of land and buildings of $172.8m (2022 – $177.6m) comprises freehold land and buildings of $169.2m (2022 – $173.7m) and capitalised leasehold improvements of $3.6m (2022 – $3.9m).

The net book value of land and buildings that are leased out is $4.8m at 31 December 2023 (2022 – $5.4m).

In accordance with the requirements of the Group’s committed ABL bank facility, security has been granted over specic itemific items of property, plant and equipment that had a carrying value of $137.8m at

31 December 2023 (31 December 2022 – $141.9m).

Notes to the Consolidated Financial Statements continued

11. Property, Plant and Equipment continued

Hunting PLC Annual Report and Accounts 2023 190Strategic Report Corporate Governance Financial Statements Other Information

12. Right-of-use Assets

		2023
		Plant, machinery
	Land and	and motor
	buildings	vehicles	Total
	$m	$m	$m
Cost:
At 1 January 2023	60.7	2.1	62.8
Exchange adjustments	0.4	0.1	0.5
Additions	5.4	0.8	6.2
Lease cessations	(2.2)	(0.2)	(2.4)
ModicationsModifications	0.7	0.2	0.9
At 31 December 2023	65.0	3.0	68.0
Accumulated depreciation and impairment:
At 1 January 2023	(35.8)	(1.0)	(36.8)
Exchange adjustments	(0.4)	(0.2)	(0.6)
Charge for the year	(6.1)	(0.5)	(6.6)
Impairment of assets	(0.2)	–	(0.2)
Lease cessations	2.2	0.2	2.4
At 31 December 2023	(40.3)	(1.5)	(41.8)
Net book amount	24.7	1.5	26.2

		2022
		Plant, machinery
	Land and	and motor
	buildings	vehicles	Total
	$m	$m	$m
Cost:
At 1 January 2022	63.5	2.2	65.7
Exchange adjustments	(3.0)	–	(3.0)
Additions	4.8	0.3	5.1
Lease cessations	(8.6)	(0.2)	(8.8)
ModicationsModifications	4.0	(0.2)	3.8
At 31 December 2022	60.7	2.1	62.8
Accumulated depreciation and impairment:
At 1 January 2022	(40.1)	(0.9)	(41.0)
Exchange adjustments	1.8	–	1.8
Charge for the year	(6.1)	(0.3)	(6.4)
Lease cessations	8.6	0.2	8.8
At 31 December 2022	(35.8)	(1.0)	(36.8)
Net book amount	24.9	1.1	26.0

The net book amount of right-of-use assets at 1 January 2022 was $24.7m.

The Group sub-leases certain right-of-use assets under operating leases. The net book value of items

that are sub-leased included in the table above is $2.1m (2022 – $2.1m) for land and buildings.

Included in land and buildings additions in 2023 was $2.1m for a new lease for Hunting’s Dubai

operations, $1.6m relating to a new lease in the US and $1.4m for a lease renewal in Saudi Arabia.

In 2022, land and buildings additions included $4.4m for the Group’s new UK headquarters. In 2022,

the Group also had lease modicatiifications of $3.8m including a lease extension of $8.6m in Wuxi, China

partially offset by lease curtailments of $4.7m for the Group’s previous UK headquarters .

13. Goodwill

	2023	2022
	$m	$m
Cost:
At 1 January	527.1	532.0
Exchange adjustments	2.0	(4.9)
At 31 December	529.1	527.1
Accumulated impairment:
At 1 January	(371.6)	(367.9)
Exchange adjustments	(1.7)	3.3
Charge for the year (note 15(b))	(1.4)	(7.0)
At 31 December	(374.7)	(371.6)
Net book amount	154.4	155.5

The net book amount of goodwill at 1 January 2022 was $164.1m.

Details of the allocation of goodwill by cash-generating unit (“CGU”), identicentification of the material CGUs

and impairment sensitivity disclosures are given in note 15(b) .

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 191Strategic Report Corporate Governance Financial Statements Other Information

14. Other Intangible Assets

			2023
		Patented
	Customer	technology and	Unpatented
	relationships	trademarks	technology	Software	Other	Total
	$m	$m	$m	$m	$m	$m
Cost:
At 1 January 2023	7.1	73.7	82.4	16.6	3.5	183.3
Exchange adjustments	0.4	0.7	0.2	0.2	0.2	1.7
Additions	–	0.8	2.2	7.0	0.9	10.9
Disposals	–	–	–	(0.7)	–	(0.7)
At 31 December 2023	7.5	75.2	84.8	23.1	4.6	195.2
Accumulated amortisation and impairment:
At 1 January 2023	(2.0)	(61.7)	(73.3)	(8.8)	(1.8)	(147.6)
Exchange adjustments	(0.2)	(0.2)	(0.2)	(0.3)	–	(0.9)
Charge for the year	(0.7)	(1.7)	(1.5)	(2.3)	(0.4)	(6.6)
Disposals	–	–	–	0.7	–	0.7
At 31 December 2023	(2.9)	(63.6)	(75.0)	(10.7)	(2.2)	(154.4)
Net book amount	4.6	11.6	9.8	12.4	2.4	40.8

			2022
		Patented
	Customer	technology and	Unpatented
	relationships	trademarks	technology	Software	Other	Total
	$m	$m	$m	$m	$m	$m
Cost:
At 1 January 2022	219.8	74.9	81.9	14.7	1.9	393.2
Exchange adjustments	(0.9)	(1.4)	(0.5)	(0.2)	(0.2)	(3.2)
Additions	–	0.6	1.0	2.3	1.8	5.7
Disposals	(211.8)	(0.4)	–	(0.2)	–	(212.4)
At 31 December 2022	7.1	73.7	82.4	16.6	3.5	183.3
Accumulated amortisation and impairment:
At 1 January 2022	(213.3)	(60.8)	(72.9)	(8.3)	(1.7)	(357.0)
Exchange adjustments	0.2	0.3	0.6	0.2	0.1	1.4
Charge for the year	(0.7)	(1.6)	(1.0)	(0.9)	(0.2)	(4.4)
Disposals	211.8	0.4	–	0.2	–	212.4
At 31 December 2022	(2.0)	(61.7)	(73.3)	(8.8)	(1.8)	(147.6)
Net book amount	5.1	12.0	9.1	7.8	1.7	35.7

i. The accumulated cost, amortisation and impairment of those customer relationships where the relationship had ended, or where the relationship with the customer had changed from when the business was acquired, were disposed of during the year.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 192Strategic Report Corporate Governance Financial Statements Other Information

The net book amount of other intangible assets at 1 January 2022 was $36.2m.

All intangible assets are regarded as having a niing a finite life and are amortised accordingly. Amortisation

charges relating to intangible assets were charged to cost of sales and administrative expenses in the

consolidated income statement.

Internally generated intangible assets have been included within patented and unpatented technology

as shown in the table below:

	2023		2022
	Internally	Internally	Internally	Internally
	generated	generated	generated	generated
	patented	unpatented	patented	unpatented
	technology	technology	technology	technology
	$m	$m	$m	$m
Cost:
At 1 January	12.1	29.0	11.8	28.5
Exchange adjustments	0.2	0.2	(0.3)	(0.5)
Additions	0.7	2.2	0.6	1.0
At 31 December	13.0	31.4	12.1	29.0
Accumulated amortisation
and impairment:
At 1 January	(6.5)	(19.9)	(6.0)	(19.5)
Exchange adjustments	–	(0.2)	0.1	0.6
Charge for the year	(0.7)	(1.5)	(0.6)	(1.0)
At 31 December	(7.2)	(21.6)	(6.5)	(19.9)
Net book amount	5.8	9.8	5.6	9.1

15. Impairment of Non-current Assets

(a) Impairment Testing Process

(i) Cash-generating Units (“CGUs”)

In Hunting, CGUs are generally separate business units. In certain cases, combinations of business

units that are tightly integrated through inter-company trading, shared management or cost base are

treated as a CGU. The recoverable amount of each CGU was determined using a value-in-use

method which uses discounted cash ow projh flow projections. The key assumptions for the value-in-use

calculations are revenue growth rates, taking into account the impact these have on margins, terminal

growth rates and the discount rates applied.

For 2024 and 2025, cash ows are bah flows are based on the latest detailed budget, as approved by the Board.

For 2026 to 2028, management made revenue projections using Spears & Associates’ “Drilling and

Production Outlook” independent reports as a default basis, selecting the most appropriate

geographic markets and drivers (rig count, footage drilled or exploration and production spend) for

each CGU. Management applied judgemental changes to revenue growth expectations, if appropriate,

to reect cir reflect circumstances specic tcumstances specific to the CGU .

Notes to the Consolidated Financial Statements continued

14. Other Intangible Assets continued

Having determined the projected revenues, management modelled the expected impact on margins

and cash ow fash flow from the resulting revenue projections. This process can give a diverse range of

outcomes depending on market or business specic condit or business specific conditions. Compound annual growth rates

(“CAGR”) for revenue for the CGUs from 2023 to 2028 vary between 5% and 20% (2022 – CAGR from

2022 to 2027 between 3% and 22%). The weighted average growth rate for revenue from 2023 to

2028 was 9% (2022 – from 2022 to 2027 was 8%). After 2028, a terminal value was calculated

assuming growth of 50 basis points above assumed inmed inflation (2022 – 50 basis points), giving nominal

growth rates between 2% and 6% (2022 – between 2% and 6%).

Cash ows were dih flows were discounted using nominal pre-tax rates between 12% and 17% (2022 – 14% and

18%). The discount rates reectes reflected current market assessments of the equity market risk premiums,

the volatility of returns, the risks associated with the cash ows, thash flows, the likely external borrowing rate of

the CGU and expected levels of leverage. Consideration was also given to other factors such as a

small-cap premium, currency risk, operational risk and country risk. Required returns on equity were

determined using the capital asset pricing model (“CAPM”), which is then incorporated into a weighted

average cost of capital (“WACC”) calculation. Risk free rates are determined using long-dated

Government borrowing instruments.

Management have also considered indicators of impairment in the carrying value of the assets,

including the excess of the value calculated under the value-in-use methodology described above,

compared to the Group’s market capitalisation.

(ii) Impairment Tests for Individual Assets

For individual assets, an impairment test is conducted if there are indicators of impairment. Impairment

arises when the carrying value of the asset is greater than the higher of either its fair value less costs

of disposal, or its value-in-use. The fair value less costs of disposal or the value-in-use is a Level 3

measurement per the fair value hierarchy as dechy as defined within IFRS 13 due to unobservable inputs used

in the valuation. If the cash ows of an ah flows of an asset cannot be assessed individually, then the asset or a group

of assets are aggregated into a CGU and tested as described above.

Hunting PLC Annual Report and Accounts 2023 193Strategic Report Corporate Governance Financial Statements Other Information

(b) Impairment Tests for Goodwill

(i) Allocation

Goodwill is allocated to the Group’s CGUs as follows:

CGU

	Operating	2023	2022
	segment	$m	$m
Hunting Titan	Hunting Titan	114.9	114.9
US Subsea	Subsea Technologies	15.0	15.0
Enpro	Subsea Technologies	4.4	5.5
Dearborn	North America	7.6	7.6
US Manufacturing	North America	12.5	12.5
At 31 December		154.4	155.5

Goodwill is tested at least annually for impairment. A charge of $1.4m (note 13) was recognised in the

rsfirst half of 2023 (2022 – $7.0m) in relation to the Enpro CGU, resulting from an increase in the discount

rate used to discount the cash ow projeh flow projections, driven by a rise in the risk free rate which was

determined using long-dated government borrowing instruments. In addition to the impairment

charge, the Enpro goodwill balance increased by $0.3m due to foreign exchange movements.

(ii) Material CGU

Hunting Titan is the only CGU that is signicnificant in relation to the Group’s total carrying amount of

goodwill, representing 74% (2022 – 74%) of the balance. Titan reported a slight reduction in revenue

in 2023 with demand for its Perforating Systems impacted by a reduction in onshore US rig count and

spending, however, the outlook for US onshore activity looks positive. The recently launched H-3 and

H-4 Perforating Systems are expected to drive the business forward and the growth in international

sales in 2023 is expected to continue.

The projected cash ows for Huh flows for Hunting Titan were discounted using a nominal pre-tax rate of 13%

(2022 – 15%). Given the level of headroom for this CGU, there are no reasonably possibly changes

in the assumptions that would result in a material impairment charge in 2023.

In considering sensitivities of possible changes in key assumptions that could lead to a material

impairment charge in the year, a materiality level of $4.5m has been used (2022 – $4.0m).

(i) Enpro

The goodwill relating to the Enpro CGU was impaired by $7.0m in 2022 and by a further $1.4m in 2023

and is therefore identied atified as being sensitive to possible changes in key assumptions.

The Enpro business started the year slowly but gained traction in the second half, winning a number

of large orders as offshore-focused clients have accelerated developments globally. The forecast

growth in the offshore deepwater market is expected to benet Ennefit Enpro throughout the cash e cash flow

projection period. The impairment in the year was mainly driven by an increase in discount rates in

the rstthe first half, together with a modest reduction in growth assumptions.

The projected cash ows for Enph flows for Enpro were discounted using a nominal pre-tax rate of 12%

(2022 – 16%). At 31 December 2023, the Group is carrying $4.4m (2022 – $5.5m) of goodwill and

$11.2m (2022 – $12.2m) of other intangible assets in respect of the Enpro CGU. The sensitivities of

possible changes to key assumptions are disclosed below.

(ii) Dearborn

There was no impairment at Dearborn in either 2023 or 2022 but the CGU remains sensitive to

possible changes in key assumptions.

Investment into labour and new equipment at Dearborn during the year improved production and

the CGU delivered strong results, outperforming management’s expectations. The business continues

to see growth in its non-oil and gas sales, as well as into end markets such as commercial space,

defence and power generation, and this trend is expected to continue throughout the forecast period.

The projected cash ows for Deh flows for Dearborn were discounted using a nominal pre-tax rate of 14% (2022 – 15%).

The following changes to key assumptions would, in isolation, lead to material impairment charges

in 2023, notwithstanding the impairment at Enpro during the year:

	Enpro	Dearborn
	increase/	increase/
	(decrease)	(decrease)
Pre-tax discount rate	3%	2%
Terminal value growth rate	(3%)	(2%)
Revenue growth rates (CAGR from 2023 to 2028)	(6%)	(3%)

(iii) Other CGUs

For other CGUs that carry goodwill, management has concluded that there are no reasonably

possible changes in key assumptions that would result in a material impairment charge in 2023 .

(d) Impairment of Other Non-Current Assets

In 2023, an impairment charge of $0.2m was made against right-of-use assets in the North America

operating segment (note 2(b) and note 12). There was no impairment of other non-current assets in 2022.

Notes to the Consolidated Financial Statements continued

15. Impairment of Non-current Assets continued

Hunting PLC Annual Report and Accounts 2023 194Strategic Report Corporate Governance Financial Statements Other Information

16. Investments in Associates and Joint Ventures

Movement on investments in associates and joint ventures:

	2023	2022
	$m	$m
At 1 January	20.1	19.4
Exchange adjustments	–	(0.1)
Additions	1.6	3.5
Share of associates’ and joint ventures’ results for the year	(0.6)	(2.7)
Dividends received from associates	(0.6)	–
At 31 December	20.5	20.1

During 2023, the Group invested a further $1.6m in Cumberland Additive Holdings LLC (“Cumberland”),

increasing its share of equity to 30.4% (2022 – 29.2%). During 2022, the Group invested $1.9m in its

Indian joint venture arrangement with Jindal SAW, and a further $1.6m in Cumberland.

The investments in associates and joint ventures, including the name, country of incorporation and

proportion of ownership interest, are disclosed in note C19.

Rival Downhole Tools LC (“Rival”) is a provider of drilling and thru tubing tools and motors to the

upstream oil and gas industry. Cumberland is a contract manufacturer which specialises in metal and

polymer 3D printing and computer numerical control machining to support the aerospace, defence,

space and energy markets. The joint venture with Jindal SAW, leaders in pipe manufacturing, is to

deliver OCTG products in India.

(a) Material Associates and Joint Ventures

The tables below provide summarised nancial informa summarised financial information for Rival which is considered to be a

material associate of the Group. The Group has a 23.0% (2022 – 23.5%) interest in the equity shares

of Rival. The information disclosed reects teflects the amounts presented in the nance financial statements of Rival

and not Hunting PLC’s share of those amounts. They have been amended to reeded to reflect adjustments

made by Hunting when using the equity method, including fair value adjustments and modications s and modifications

for differences in accounting policy.

	Rival
	2023	2022
	$m	$m
Summarised statement of comprehensive income:
Revenue	53.5	39.6
Operating prot/(ofit/(loss)	6.7	(6.8)
Total comprehensive income/(expense)	6.7	(6.8)

The Group’s share of Rival’s post-tax prot was $1x profit was $1.4m (2022 – $1.6m share of post-tax loss).

Amortisation of $0.3m (2022 – $0.3m) was charged to the Group’s income statement during the year

in relation to the intangible assets recognised at the time the investment in Rival was made .

	Rival
	2023	2022
	$m	$m
Summarised balance sheet:
Non-current assets	26.6	24.2
Current assets	25.4	17.4
Total assets	52.0	41.6
Non-current liabilities	(7.1)	(2.6)
Current liabilities	(6.0)	(6.8)
Total liabilities	(13.1)	(9.4)
Net assets	38.9	32.2
Reconciliation to carrying amounts:
Opening net assets at 1 January	32.2	39.0
Protfit/(loss) for the year	6.7	(6.8)
Net assets	38.9	32.2
Group’s share of equity %	23.0%	23.5%
Group’s share of net assets	8.9	7.5
Goodwill	2.1	2.1
Other intangible assets	2.1	2.4
Carrying amount at 31 December	13.1	12.0

(b) Individually Immaterial Associates and Joint Ventures

In addition to the material associates disclosed above, the Group also has interests in a number of

individually immaterial associates and joint ventures, all of which are unlisted, that are accounted for

using the equity method. The Group’s share of the results and its aggregated assets and liabilities,

are as follows:

	2023	2022
	$m	$m
Aggregate carrying amount of individually immaterial associates	5.7	6.2
Aggregate carrying amount of individually immaterial joint ventures	1.7	1.9
Share of immaterial associates’ and joint ventures’ results for the year	(1.7)	(0.8)

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 195Strategic Report Corporate Governance Financial Statements Other Information

17. Investments

	2023	2022
	$m	$m
Listed equity investments and mutual funds	2.2	1.9
Well Data Labs convertible nancingible financing	2.2	2.9
	4.4	4.8

The listed equity investments and mutual funds are held in relation to the US deon to the US defined benet scnefit scheme

(note 32).

In February 2021, the Group entered into a strategic alliance with Wells Data Labs, a data analytics

business focused on the onshore drilling market, through the provision of $2.5m in convertible nancing, ble financing,

which had a fair value of $2.2m (2022 – $2.9m) at the year-end (note 29(b)).

18. Trade and Other Receivables

	2023	2022
	$m	$m
Non-current:
Prepayments	1.8	2.7
Other receivables	–	0.1
	1.8	2.8

		2023
	Contracts with	Rental	Other
	customers	receivables	receivables	Total
	$m	$m	$m	$m
Current:
Trade receivables	202.7	2.0	–	204.7
Accrued revenue	2.5	–	–	2.5
Contract assets (note 23)	17.5	–	–	17.5
Gross receivables	222.7	2.0	–	224.7
Less: provisions for impairment	(3.2)	(0.3)	–	(3.5)
Net receivables	219.5	1.7	–	221.2
Prepayments	–	–	27.1	27.1
Other receivables	–	–	3.1	3.1
	219.5	1.7	30.2	251.4

		2022
	Contracts with	Rental	Other
	customers	receivables	receivables	Total
	$m	$m	$m	$m
Current:
Trade receivables	180.1	2.1	0.9	183.1
Accrued revenue	2.0	0.2	–	2.2
Contract assets (note 23)	8.6	–	–	8.6
Gross receivables	190.7	2.3	0.9	193.9
Less: provisions for impairment	(3.3)	(0.4)	–	(3.7)
Net receivables	187.4	1.9	0.9	190.2
Prepayments	–	–	37.9	37.9
Other receivables	–	–	4.3	4.3
	187.4	1.9	43.1	232.4

Current and non-current other receivables generally arise from transactions outside the usual operating

activities of the Group and comprise receivables from tax (VAT, GST, franchise taxes, and sales and

use taxes) of $1.0m (2022 – $0.6m), derivative nvative financial assets of $0.5m (2022 – $0.6m) and other

receivables of $1.6m (2022 – $3.2m), the latter of which are classiesified as nand as financial assets measured

at amortised cost .

The Group does not hold any other collateral as security and no assets have been acquired through

the exercise of any collateral previously held.

During the year, the Group sold trade receivables amounting to $9.9m to third parties under trade

receivables purchasing programmes in order to accelerate collections. Upon sale, the receivables

were derecognised from the balance sheet.

In accordance with the requirements of the Group’s committed ABL bank facility, security has been

granted over certain US and Canadian trade and other receivables, which had a carrying value of

$77.6m at 31 December 2023 (31 December 2022 – $96.3m). For the receivables pledged as security,

their carrying value approximates their fair value .

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 196Strategic Report Corporate Governance Financial Statements Other Information

Impairment of Trade and Other Receivables

The Group applies lifetime expected credit losses (“ECLs”) to trade receivables, accrued revenue and contract assets upon their initial recognition. Each entity within the Group uses provision matrices for

recognising ECLs on its receivables, which are based on actual credit loss experience over the past two years, at a minimum. Receivables are appropriately grouped by geographical region, product type or

type of customer, and separate calculations produced, if historical or forecast credit loss experience shows signiignificantly different loss patterns for different customer segments. Actual credit loss experience is

then adjusted to reect difflect differences in economic conditions over the period the historical data was collected, current economic conditions, forward-looking information based on macro-economic information

and the Group’s view of economic conditions over the expected lives of the receivables. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade

receivables for the same types of contracts. It has, therefore, been concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

At 31 December 2023, the ageing of the Group’s gross naross financial assets, based on days overdue, is as follows:

	Not	1 – 30	31 – 60	61 – 90	91 – 120	More than	Total gross
	overdue	days	days	days	days	120 days	nancial assetsfinancial assets
	$m	$m	$m	$m	$m	$m	$m
Trade receivables – contracts with customers	111.0	40.9	23.9	9.7	8.5	8.7	202.7
Trade receivables – rental receivables	0.7	0.1	0.5	0.3	0.2	0.2	2.0
Total trade receivables	111.7	41.0	24.4	10.0	8.7	8.9	204.7
Accrued revenue – contracts with customers	2.5	–	–	–	–	–	2.5
Contract assets	17.5	–	–	–	–	–	17.5
Other receivables	2.1	–	–	–	–	–	2.1
	133.8	41.0	24.4	10.0	8.7	8.9	226.8

i. Other receivables excludes $1.0m in relation to receivables from tax as these are not considered nred financial assets.

Since 31 December 2022, there has been a modest decrease in the ageing of trade receivables despite the increase in trade receivables by $21.6m from $183.1m to $204.7m at 31 December 2023, with trade

receivables not overdue at the year-end comprising 55% of gross trade receivables compared to 56% at 31 December 2022. Overdue debts arise due to a number of different factors, including the time taken

in resolving any disputes, a culture of slow/late payment in some jurisdictions and some debtors experiencing cash ow dish flow diffficulties.

At 31 December 2022, the ageing of the Group’s gross nass financial assets, based on days overdue, was as follows:

	Not	1 – 30	31 – 60	61 – 90	91 – 120	More than	Total gross
	overdue	days	days	days	days	120 days	nancial assetsfinancial assets
	$m	$m	$m	$m	$m	$m	$m
Trade receivables – contracts with customers	101.9	36.6	17.6	8.2	9.5	6.3	180.1
Trade receivables – rental receivables	0.5	0.6	0.3	0.5	0.1	0.1	2.1
Trade receivables – other	0.9	–	–	–	–	–	0.9
Total trade receivables	103.3	37.2	17.9	8.7	9.6	6.4	183.1
Accrued revenue – contracts with customers	2.0	–	–	–	–	–	2.0
Accrued revenue – rental receivables	0.2	–	–	–	–	–	0.2
Contract assets	8.6	–	–	–	–	–	8.6
Other receivables	3.8	–	–	–	–	–	3.8
	117.9	37.2	17.9	8.7	9.6	6.4	197.7

i. Other receivables excludes $0.6m in relation to receivables from tax as these are not considered naed financial assets.

Concentrations of credit risk with respect to trade receivables are limited due to the Group’s wide and unrelated customer base. The maximum exposure to credit risk is the carrying amount of each class of

nafinancial assets mentioned above. The carrying value of each class of receivable approximates their fair value as described in note 29(b)(iv).

Notes to the Consolidated Financial Statements continued

18. Trade and Other Receivables continued

Hunting PLC Annual Report and Accounts 2023 197Strategic Report Corporate Governance Financial Statements Other Information

Impairment of Trade and Other Receivables continued

Default on a ault on a financial asset is usually considered to have occurred when any contractual payments

under the terms of the debt are more than 90 days overdue. Usually, no further deliveries are made or

services provided to customers that are more than 90 days overdue unless there is a valid reason to

do so, such as billing issues have prevented the customer from settling the invoice. Permission from

the local ncal financial controller can be obtained to continue trading with customers with debts that are

more than 90 days overdue, and the outstanding debts may also be rescheduled with the permission

of the nancial conthe financial controller.

Whilst a proportion, 9% (2022 – 9%), of the Group’s trade receivables are more than 90 days overdue,

the majority of these have not been impaired. Some of these debts have become overdue due to

billing and other issues or due to general slow payment by the customer. Where there is no history of

bad debts and there are no indicators that the debts will not be settled, the receivables have not been

impaired. These customers are monitored very closely for any indicators of impairment.

Receivables are written off when there is no reasonable expectation of recovery. Indicators that

receivables are generally not recoverable include the failure of the debtor to engage in a repayment

plan, failure to make contractual payments for a period greater than 180 days past due and the debtor

being placed in administration. Where receivables have been written off, the Group will continue to try

and recover the outstanding receivable. Impairment losses on receivables are presented net of

unused provisions released to the consolidated income statement within administrative expenses.

Subsequent recoveries of amounts previously written off are credited against the same line item.

Credit risk arises on accrued revenue where goods or services have been provided to a customer but

the amount is yet to be invoiced. The accrued revenue balance is short-term and relates to customers

with a strong credit history. Therefore, the expected credit losses on this balance are immaterial and

no provision for impairment has been recognised.

During the year, the movements on the provisions for impairment were as follows:

		2023
	Contracts
	with	Rental
	customers	receivables	Total
	$m	$m	$m
At 1 January 2023	(3.3)	(0.4)	(3.7)
Charge to the consolidated income statement
– lifetime expected credit losses	(0.9)	–	(0.9)
Utilised against receivables written off	1.0	0.1	1.1
At 31 December 2023	(3.2)	(0.3)	(3.5)

Notes to the Consolidated Financial Statements continued

18. Trade and Other Receivables continued

The provision for the impairment of trade and other receivables has marginally decreased by $0.2m

to $3.5m at 31 December 2023. Management is of the view that the credit risk is largely unchanged

during the year.

		2022
	Contracts
	with	Rental
	customers	receivables	Total
	$m	$m	$m
At 1 January 2022	(4.3)	(0.3)	(4.6)
Charge to the consolidated income statement
– lifetime expected credit losses	(0.2)	(0.1)	(0.3)
Unused provisions released to the consolidated income statement	0.9	–	0.9
Utilised against receivables written off	0.3	–	0.3
At 31 December 2022	(3.3)	(0.4)	(3.7)

19. Deferred Tax

Deferred income tax assets and liabilities are only offset when there is a legally enforceable right to

offset, when the deferred income taxes relate to the same scme fiscal authority and there is an intention to

settle the balance net. The offset amounts are as follows:

	2023	2022
	$m	$m
Deferred tax assets	93.1	13.7
Deferred tax liabilities	(8.4)	(6.4)
	84.7	7.3

The movement in the total deferred tax shown in the balance sheet is as follows:

	2023	2022
	$m	$m
At 1 January	7.3	3.5
Credit to the consolidated income statement	77.0	3.9
Change in tax rates	–	(0.2)
Total credit to the consolidated income statement	77.0	3.7
Taken direct to equity	0.4	0.1
At 31 December	84.7	7.3

Hunting PLC Annual Report and Accounts 2023 198Strategic Report Corporate Governance Financial Statements Other Information

The change in tax rates in 2022 relates to an increase in the blended State rate applied to the recognised US deferred tax balances. The UK standard rate of corporation tax increased from 19% to 25% from

1 April 2023. UK deferred tax balances have therefore all been calculated at 25%.

Deferred tax assets of $57.8m gross and $7.1m tax (2022 – $354.8m gross and $87.1m tax) have not been recognised as the assessment of recoverability at 31 December 2023 is that it is uncertain and

therefore does not meet the criteria for recognition under IAS 12. This includes $57.5m gross and $7.0m tax (2022 – $216.9m gross and $51.0m tax) in respect of trading losses, the majority of which do not

have an expiry date. A deferred tax asset of $69.4m (2022 – $24.2m) has been recognised in respect of tax losses in various locations where recognition assessment has provided support that sufcieficient future

taxable prots wle profits will be available against which the tax losses could be utilised. See note 9 for further details on the recognition assessment performed at each balance sheet date.

The movements in deferred tax assets and liabilities, prior to taking into consideration the offsetting of balances within the same tax jurisdictions, are shown below:

	At 1 January	Exchange	(Charge)/credit to	Change in	Taken direct	At 31 December	Net deferred	Net deferred
	2023	adjustments	income statement	tax rates		to equity 2023	tax assets	tax liabilities
	$m	$m	$m	$m	$m	$m	$m	$m
Tax losses	24.2	0.3	44.9	–	–	69.4	51.2	18.2
Inventory	0.8	–	13.0	–	–	13.8	13.8	–
Goodwill and intangibles	(19.7)	(0.1)	8.3	–	–	(11.5)	13.8	(25.3)
Interest deductible in future periods	–	–	17.1	–	–	17.1	17.1	–
Property, plant and equipment	(0.9)	–	(15.0)	–	–	(15.9)	(14.6)	(1.3)
Share-based payments	1.0	(0.1)	3.4	–	0.3	4.6	4.6	–
Other	1.9	(0.1)	5.3	–	0.1	7.2	7.2	–
	7.3	–	77.0	–	0.4	84.7	93.1	(8.4)

	At 1 January	Exchange	(Charge)/credit to	Change in	Taken direct	At 31 December	Net deferred	Net deferred
	2022	adjustments	income statement	tax rates		to equity 2022	tax assets	tax liabilities
	$m	$m	$m	$m	$m	$m	$m	$m
Tax losses	16.1	(0.4)	8.5	–	–	24.2	10.0	14.2
Inventory	1.4	(0.1)	(0.5)	–	–	0.8	0.8	–
Goodwill and intangibles	(14.1)	0.3	(5.7)	(0.2)	–	(19.7)	(0.3)	(19.4)
Property, plant and equipment	(1.6)	0.2	0.5	–	–	(0.9)	0.3	(1.2)
Share-based payments	0.4	–	0.4	–	0.2	1.0	1.0	–
Other	1.3	–	0.7	–	(0.1)	1.9	1.9	–
	3.5	–	3.9	(0.2)	0.1	7.3	13.7	(6.4)

Notes to the Consolidated Financial Statements continued

19. Deferred Tax continued

Hunting PLC Annual Report and Accounts 2023 199Strategic Report Corporate Governance Financial Statements Other Information

20. Inventories

	2023	2022
	$m	$m
Raw materials	150.9	118.7
Work in progress	94.0	82.7
Finished goods	136.0	120.7
Gross inventories	380.9	322.1
Less: provisions for impairment	(52.5)	(50.0)
Net inventories	328.4	272.1

	2023	2022
	$m	$m
Gross inventories:
At 1 January	322.1	263.9
Exchange adjustments	1.6	(3.7)
Additions	719.1	584.5
Charged to cost of sales in the consolidated income statement	(660.4)	(521.0)
Reclassication tReclassification to property, plant and equipment (note 11)	(1.5)	(1.6)
At 31 December	380.9	322.1
Provisions for impairment:
At 1 January	(50.0)	(59.5)
Exchange adjustments	(0.4)	0.9
Charged to cost of sales in the consolidated income statement	(7.5)	(6.4)
Provisions utilised against inventories written off	3.6	9.3
Provisions released to the consolidated income statement	1.8	5.7
At 31 December	(52.5)	(50.0)
Net inventories	328.4	272.1

The Group’s inventory is highly durable and it can, therefore, hold its value well with the passing of

time. The nature of our market is that demand for products depends on the technical requirements

of the projects being developed. For some markets and product lines there may be a limited number

of sales, or even no sales, to form a benchmark in the current year. Management looks at relevant

historical activity levels and has to form a judgement as to likely future demand in light of market

forecasts and likely competitor activities.

During 2023, inventory provisions increased by $2.5m to $52.5m at 31 December 2023, which

represents 14% of gross cost balances (2022 – 16%). The broadly unchanged provision in the year

reereflects new charges offsetting utilisation of provisions and the reversal of unutilised provisions

Management has considered the judgements and estimates made in each of the Group’s businesses

and, other than PCE, has not identientified any individual estimates, which in the event of a change, would

lead to a material change in the next nat financial period. Provisions for inventories held at NRV are subject

to change if expectations change.

Notes to the Consolidated Financial Statements continued

Inventories of $245.2m are expected to be realised within 12 months of the balance sheet date

(2022 – $194.5m) and $83.2m after 12 months (2022 – $77.6m).

In accordance with the requirements of the Group’s committed ABL bank facility, security has been

granted over inventories which had a carrying value of $172.3m at 31 December 2023 (31 December

2022 – $142.9m) held in certain US and Canadian subsidiaries.

21. Cash and Cash Equivalents

	2023	2022
	$m	$m
Cash at bank and in hand	45.5	29.4

Cash at bank and in hand is carried at amortised cost. The maximum exposure to credit risk is the

carrying amount. Please see note 30(c)(i) for further disclosures on credit risk.

As shown in note 26, cash and cash equivalents for cash ow statesh flow statement purposes also includes bank

overdrafts shown in borrowings in note 25 .

22. Trade and Other Payables

	2023	2022
	$m	$m
Non-current:
US deferred compensation plan obligation (note 32(b)(i))	2.2	1.9
Social security and other taxes	0.4	0.5
Other payables	1.1	0.8
	3.7	3.2

	2023	2022
	$m	$m
Current:
Trade payables	62.5	66.8
Accruals	50.7	56.9
Social security and other taxes	7.4	7.8
Contract liabilities (note 23)	39.6	8.8
Other payables	3.2	1.5
	163.4	141.8

i. Other payables include derivative nave financial liabilities of $0.1m (2022 – $0.1m).

Hunting PLC Annual Report and Accounts 2023 200Strategic Report Corporate Governance Financial Statements Other Information

23. Contract Assets and Liabilities

The following table provides information about receivables, accrued income, contract assets and

contract liabilities arising from contracts with customers.

	2023	2022	2021
	$m	$m	$m
Contract assets (note 18)	17.5	8.6	9.9
Contract liabilities (note 22)	(39.6)	(8.8)	(6.1)
Trade receivables – contracts with customers (note 18)	202.7	180.1	126.5
Provisions for impairment (note 18)	(3.2)	(3.3)	(4.3)
Net trade receivables – contracts with customers	199.5	176.8	122.2
Accrued revenue – contracts with customers (note 18)	2.5	2.0	3.7

(a) Signicificant Changes in Contract Assets and Contract Liabilities

Contract assets increased from $8.6m at 31 December 2022 to $17.5m at 31 December 2023 due

to an increase in bespoke customer work-in-progress in North America.

Contract liabilities represent deposits received from customers on over time contracts and amounts

invoiced in excess of the value of the work completed to date at the Subsea Technologies operating

segment, as well as deposits received from customers for the purchase of pipe in the Asia Pacica Pacific

businesses, prior to Hunting placing an order with the steel mills. Contract liabilities increased by

$30.8m in the year to $39.6m at 31 December 2023 reectr 2023 reflecting the improvement in orders, the increase

in customer deposits and the higher portion of contracts during the year where revenue is recognised

over time versus at point in time.

(b) Revenue Recognised in Relation to Contract Liabilities

During the year, $8.8m of revenue was recognised in relation to amounts that were included in the

contract liabilities balance at the beginning of the year (2022 – $6.1m). There was no revenue

recognised from performance obligations satised osfied or partially satisy satisfied in previous years (2022 – none).

The aggregate amount of the transaction price allocated to partially or fully unsatiseatisfied performance

obligations as at the year-end, generally on conrmnfirmed purchase orders received, is expected to be

recognised as revenue in the following periods:

	2023	2022
	$m	$m
Hunting Titan	15.9	29.8
North America	252.8	207.4
Subsea Technologies	152.2	105.1
EMEA	29.7	28.3
Asia Paciccific	114.6	102.4
	565.2	473.0
Expected to be recognised as revenue:
Within 1 year	444.5	402.3
After 1 year	120.7	70.7
	565.2	473.0

It is expected that 79% of the transaction price allocated to unsatisesatisfied performance obligations as of

31 December 2023 will be recognised as revenue in 2024 (2022 – 85% in 2023) and the remaining

21% in future years (2022 – 15% after 2023).

24. Leases

The Group leases various ofces, wafices, warehouses, equipment and vehicles. Rental contracts for ofcefices

and warehouses are typically made for xed per fixed periods of between three and ten years, but may have

extension options as described below. Rental contracts for equipment and vehicles are typically made

for for fixed periods of between three and seven years. The Group also has short-term leases and leases

of low-value assets. Lease terms are negotiated on an individual basis and contain a wide range of

different terms and conditions. The lease agreements do not impose any covenants. As at 31 December

2023, the Group did not have any commitments for leases that were due to commence in 2024 or

later (31 December 2022 – no commitments due to commence in 2023 or later).

Extension and break options are included in a number of property and equipment leases across the

Group. These terms are used to maximise operational exibl flexibility in terms of managing contracts. For

extension and break options that are exercisable only by the Group and not by the respective lessor,

management considers all facts and circumstances that create an economic incentive for the Group

to exercise an extension option, or not exercise a break option, in determining the lease term. The

lease term is determined according to management’s expectation of exercising any available extension

and break options. Extension or termination options are only adjusted in the lease term if the lease

option is reasonably certain to be exercised.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 201Strategic Report Corporate Governance Financial Statements Other Information

(a) Amounts Recognised in the Consolidated Balance Sheet

The analysis of right-of-use assets is presented in note 12.

	2023	2022
	$m	$m
Lease liabilities
Current	8.0	9.1
Non-current	20.7	21.5
	28.7	30.6

The decrease during the year is largely due to a one-off payment to exit a lease for a surplus facility in

North America.

(b) Amounts Recognised in the Consolidated Income Statement

	2023	2022
	$m	$m
Depreciation of right-of-use assets (note 12)	(6.6)	(6.4)
Net gain on curtailment of leases (note 4)	–	3.1
Expense relating to short-term leases and leases of low-value assets
(included in cost of sales and administrative expenses)	(1.8)	(1.8)
Impairment of right-of-use assets (note 12)	(0.2)	–
Lease charges included in operating prot (rofit (note 6)	(8.6)	(5.1)
Interest on lease liabilities (included in nance expenses finance expenses) (note 8)	(1.3)	(1.2)
Foreign exchange gains on lease liabilities (note 8)	–	0.1
Lease charges included in prot/( profit/(loss) before tax	(9.9)	(6.2)

In 2022, following the relocation of a number of the Group’s Asia Paciia Pacific facilities to a single site, certain

lease liabilities were disposed of, recording a net gain of $2.4m. This gain together with other lease

curtailments in the period resulted in a net gain of $3.1m during the year, which was recognised in net

operating income and other expenses in note 4.

	2023	2022
	$m	$m
Payments for short-term and low-value leases	(1.8)	(1.8)
Payment of lease liabilities, principal and interest	(10.4)	(8.0)
Proceeds on disposal of lease liabilities	–	2.2
	(12.2)	(7.6)

Payments for short-term leases, payments for leases of low-value assets and variable lease payments

that are not included in the measurement of the lease liabilities are presented within cash ows froh flows from

operating activities. Payments for the principal and interest elements of lease liabilities and proceeds

on disposal of lease liabilities are presented within cash ows fash flows from narom financing activities.

In 2022, the Group received net receipts of $2.2m largely relating to the exit of the leases in Asia

Pacic, see abfic, see above .

The analysis of the contractual, undiscounted cash ows relah flows relating to lease liabilities is shown in

note 30(d)(iii).

(d) The Group as Lessor

A number of the Group’s properties included within property, plant and equipment and right-of-use

assets are leased to third parties under operating lease agreements. Income from leasing these assets

during the year was $2.7m (2022 – $2.1m) and is included within operating income (note 4). The Group

also earns revenue from the rental of tools, which are items of property, plant and equipment (note 11).

Rental revenue during the year was $7.9m (2022 – $8.1m) (note 3).

The table below shows the maturity analysis of the undiscounted future lease payments expected to

be received in relation to non-cancellable operating leases:

	Property	Property
	2023	2022
	$m	$m
Year one	2.5	1.9
Year two	0.8	1.0
Year three	0.7	0.9
Year four	0.7	0.7
Year ve five	0.7	0.7
Year six	–	0.7
Total lease income receivable	5.4	5.9

25. Borrowings

	2023	2022
	$m	$m
Non-current:
Shareholder loan from non-controlling interest	3.9	3.9
Current:
Bank borrowings unsecured (note 30(d)(i))	–	2.8
Bank borrowings secured (note 30(d)(i))	44.9	–
Bank overdrafts secured	1.4	2.1
	46.3	4.9
Total borrowings	50.2	8.8

In accordance with the requirements of the Group’s committed ABL bank facility, security has been

granted over certain freehold property, receivables and inventories. The carrying amounts of the

assets pledged as security are disclosed in notes 11, 18 and 20.

All of the borrowings are wings are financial liabilities measured at amortised cost. The shareholder loan, secured

bank borrowings and bank overdrafts are denominated in US Dollars. The unsecured bank borrowings

are denominated in Renminbi. The shareholder loan is interest-free and not repayable on demand.

Notes to the Consolidated Financial Statements continued

24. Leases continued

Hunting PLC Annual Report and Accounts 2023 202Strategic Report Corporate Governance Financial Statements Other Information

26. Changes in Net Cash/(Debt)

Hunting operates a centralised treasury function that manages all cash and borrowing positions throughout the Group and ensures funds are used efciently thr used efficiently through the use of cash concentration account

structures and other such measures. Net cash/(debt) (NGM L) is a non-GAAP measure; however, management and the Group treasury function monitor total cash and bank (NGM K) to ensure there is

sufcficient liquidity to meet business requirements. As the Group manages funding on a total cash and bank basis, internal reporting focuses on changes in total cash and bank and this is presented in the

Strategic Report. The net cash/(debt) reconciliation below provides an analysis of the movement in the year for each component of net cash/(debt) split between cash and non-cash items. Net cash/(debt)

comprises total cash and bank less total lease liabilities and the shareholder loan from a non-controlling interest.

	At		Non-cash		At
	1 January		movements on	Exchange	31 December
	2023	Cash osh flow	lease liabilities	movements	2023
	$m	$m	$m	$m	$m
Cash and cash equivalents (note 21)	29.4	16.2	–	(0.1)	45.5
Bank overdrafts secured (note 25)	(2.1)	0.7	–	–	(1.4)
Cash and cash equivalents – per cash ow stash flow statement	27.3	16.9	–	(0.1)	44.1
Total lease liabilities (note 24)	(30.6)	10.4	(8.4)	(0.1)	(28.7)
Shareholder loan from non-controlling interest (note 25)	(3.9)	–	–	–	(3.9)
Bank borrowings (note 25)	(2.8)	(42.1)	–	–	(44.9)
Liabilities arising from nancing actom financing activities	(37.3)	(31.7)	(8.4)	(0.1)	(77.5)
Total net debt	(10.0)	(14.8)	(8.4)	(0.2)	(33.4)

i. Non-cash movements on lease liabilities comprise new leases of $6.2m, lease modicatfications of $0.9m and interest expense of $1.3m.

During the year, $1.7m of loan facility fees were amortised (2022 – $1.0m) and $nil were paid in respect of the Asset Based Lending (“ABL”) facility (2022 – $3.0m). The fees for the ABL facility were capitalised

in prepayments and amortised over the expected useful life of the facility.

	At		Non-cash		At
	1 January		movements on	Exchange	31 December
	2022	Cash owsh flow	lease liabilities	movements	2022
	$m	$m	$m	$m	$m
Cash and cash equivalents (note 21)	108.4	(74.5)	–	(4.5)	29.4
Bank overdrafts secured (note 25)	(1.0)	(1.1)	–	–	(2.1)
Cash and cash equivalents – per cash ow stash flow statement	107.4	(75.6)	–	(4.5)	27.3
Cash deposits with more than 3 months to maturity	6.8	(6.7)	–	(0.1)	–
Total lease liabilities (note 24)	(31.8)	8.0	(8.4)	1.6	(30.6)
Shareholder loan from non-controlling interest (note 25)	(3.9)	–	–	–	(3.9)
Bank borrowings (note 25)	–	(2.9)	–	0.1	(2.8)
Liabilities arising from nancing actom financing activities	(35.7)	5.1	(8.4)	1.7	(37.3)
Total net cash/(debt)	78.5	(77.2)	(8.4)	(2.9)	(10.0)

i. Non-cash movements on lease liabilities comprise new leases of $4.6m, lease modiodifications of $2.6m and interest expense of $1.2m .

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 203Strategic Report Corporate Governance Financial Statements Other Information

27. Provisions and Contingent Liabilities

(a) Provisions

	Asset
	decommissioning
	and
	remediation	Other	Total
	$m	$m	$m
At 1 January 2023	3.7	5.2	8.9
Exchange adjustments	–	0.1	0.1
Charged to the consolidated income statement	–	0.5	0.5
Charged other	–	1.4	1.4
Provisions utilised	(0.2)	(1.1)	(1.3)
Unutilised amounts reversed	(2.0)	(0.1)	(2.1)
At 31 December 2023	1.5	6.0	7.5

Provisions are due as follows:

	2023	2022
	$m	$m
Current	4.8	4.6
Non-current	2.7	4.3
	7.5	8.9

Asset decommissioning and remediation provisions of $1.5m (2022 – $3.7m) relate to the Group’s

obligations to restore leased properties. The restoration provisions of $1.5m are expected to be utilised

at the end of the respective leases, with $0.9m current and $0.6m non-current. Provisions are made

on a discounted basis; however, the impact of discounting is not material.

Other provisions include provisions for onerous contracts of $0.5m (2022 – $0.7m), restructuring

provisions of $0.3m (2022 – $0.2m), a provision for a pension fund for ofcficers and ratings in the

mercantile marine industry from a legacy subsidiary of $0.9m (2022 – $0.9m), warranties and

tax indemnities of $0.3m (2022 – $1.1m), litigation costs of $2.3m (2022 – $1.8m) and $1.7m

(2022 – $0.5m) for various other items .

Notes to the Consolidated Financial Statements continued

(b) Contingent Liabilities

The Group recognises provisions for liabilities when it is more likely than not a settlement will be

required and the value of the economic outow can bflow can be estimated reliably. Liabilities that are not

provided for in the nancial posit the financial position of the Group are disclosed, unless the probability of an economic

outow is cflow is considered to be remote.

In 2021, a claim against the Group from a competitor relating to a patent infringement was disclosed.

The legal case was settled in Hunting’s favour in January 2023. During the period, the Group has

received conronfirmation that an appeal will not be lll not be filed and now considers the case to be closed.

The Group has entered into a number of guarantee and performance bond arrangements arising in

the normal course of business which have not been provided for as any signicant liability is significant liability is considered

to be remote.

28. Derivatives and Hedging

(a) Currency Derivatives

The Group uses derivatives for economic hedging purposes and there are no speculative positions

entered into by the Group. However, where derivatives do not meet the hedge accounting criteria, they

are classied as “ified as “held for trading” for accounting purposes and are accounted for at fair value through

prot oprofit or loss. The Group has used spot and forward foreign exchange contracts to hedge its exposure

to exchange rate movements during the year. Foreign exchange outright contracts are used to

manage exposures, with funding swaps being used to produce required currencies when needed.

The fair values of outstanding derivative nancve financial instruments are set out below:

	2023		2022
	Total	Total	Total	Total
	assets	liabilities	assets	liabilities
	$m	$m	$m	$m
Forward foreign exchange contracts
– cash ow heash flow hedges	0.3	–	0.4	–
Forward foreign exchange contracts
– fair value hedges	–	–	0.1	–
Foreign exchange swaps – not in a hedge	0.2	(0.1)	0.1	(0.1)
	0.5	(0.1)	0.6	(0.1)

Net fair value gains on contracts that are not designated in a hedge relationship of $0.2m (2022 – $0.6m)

were recognised in the consolidated income statement during the year, all within net nain net finance expenses

(note 8) .

Hunting PLC Annual Report and Accounts 2023 204Strategic Report Corporate Governance Financial Statements Other Information

(b) Fair Value Hedge

Forward foreign exchange contracts have also been designated in a fair value hedge to hedge the

foreign exchange movement in foreign currency trade receivables and payables during the year. The

value of the forward foreign exchange contract matches the value of the trade receivables and payables

and they move in opposite directions as a result of movements in the GBP/USD or EUR/USD exchange

rates, being the hedged risk. Fair value gains of $nil (2022 – $0.1m) were recognised in the consolidated

income statement in net operating income and other expenses (note 4) during the year. At the year-end,

the fair value of derivative assets designated in a fair value hedge was $nil (2022 – $0.1m).

The Group entered into contracts to purchase materials from suppliers in a currency other than the

relevant subsidiary’s functional currency. Certain of these highly probable forecast transactions have

been designated in a cash  in a cash flow hedge relationship and hedged using forward foreign exchange

contracts during the year. The value of the forward foreign exchange contract matches the value of the

forecast inventory purchase and they move in opposite directions as a result of movements in the

CAD/USD, EUR/USD, EUR/GBP, GBP/USD and the CNY/USD exchange rates, being the hedged

risk. This will effectively result in recognising inventory at the y at the fixed foreign currency rate for the hedged

purchases. It is anticipated that the materials will be sold within 12 months after purchase, at which

time the amount previously deferred in equity and included as part of the cost of inventory, will impact

prot oprofit or loss as part of the cost of inventories sold.

The Group also entered into forward foreign exchange contracts to hedge certain receipts from

customers and these highly probable forecast transactions have been designated in a cash ow flow

hedge relationship. The value of the forward foreign exchange contract matches the value of the

forecast cash ow aash flow and they move in opposite directions as a result of movements in the GBP/USD,

GBP/NOK, GBP/EUR, EUR/NOK and USD/EUR exchange rates, being the hedged risk. It is

anticipated that the trade receivables will be collected within 12 months after the invoice is issued,

at which time the amount previously deferred in equity, will be taken to proo profit or loss.

The Group’s cash ow hash flow hedge reserve, which is disclosed as part of other components of equity in

note 34, relates to the spot component of forward foreign exchange contracts. The movements in the

hedging reserve during the year are shown in note 34.

The effects of outstanding forward foreign exchange contracts on the Group’s nancial positions financial position and

performance are as follows:

		2023	2022
Carrying amount of the forward foreign
exchange contracts – other receivables
(note 18)	$m	0.3	0.4
Notional amount of the forward
foreign exchange contracts	$m	23.1	18.5
Maturity date		2 January 2024 to	3 January 2023 to
		24 June 2024	21 August 2023
Hedge ratio		1:1	1:1
Change in value of hedged item used
to determine hedge effectiveness	$m	(0.3)	(0.4)

i. The forward foreign exchange contracts are denominated in the same currency as the highly probable forecast transactions to match the

exposed currency risk, therefore the hedge ratio is 1:1.

Immaterial changes in the forward points, the differential between the forward rate and the market

spot rate, have been recognised in the consolidated income statement during the year and previous

year.

(d) Hedge Effectiveness

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic

prospective effectiveness assessments to ensure that an economic hedge relationship exists between

the hedged item and the hedging instrument.

For hedges of foreign currency purchases, the Group enters into hedge relationships where the critical

terms of the hedging instrument match exactly with the terms of the hedged item. The Group,

therefore, performs a qualitative assessment of effectiveness. If changes in circumstances affect the

terms of the hedged item such that the critical terms no longer match exactly with the critical terms of

the forward foreign exchange contract, then the Group uses the hypothetical derivative method to

assess effectiveness. Ineffectiveness may arise if there is a change in the timing of the forecast

transaction from what was originally estimated or from a change in the US Dollar amount charged and

invoiced. A possible source of ineffectiveness is also a change in credit risk of either party to the

derivative. However, any change in credit risk is not expected to be material .

Notes to the Consolidated Financial Statements continued

28. Derivatives and Hedging continued

Hunting PLC Annual Report and Accounts 2023 205Strategic Report Corporate Governance Financial Statements Other Information

29. Financial Instruments

This note provides information about the Group’s nan’s financial instruments, including an overview of all

nancial instfinancial instruments held by the Group; specic informa specific information about each type of nancial of financial instrument;

and information about determining the fair value of the instruments, including judgements and

estimation uncertainty involved.

The Group’s exposure to various risks associated with the nith the financial instruments is disclosed in note 30.

The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each

class of nass of financial asset. Contract assets are not nane not financial assets; however, they are explicitly included in

the scope of IFRS 7 for the purpose of the credit risk disclosures in note 30.

(a) Financial Instruments at Amortised Cost

The carrying values of the Group’s ns financial instruments at amortised cost are as follows:

	2023	2022
	$m	$m
Financial assets at amortised cost:
Trade and other receivables (note 18):
Trade receivables	204.7	183.1
Accrued revenue	2.5	2.2
Other receivables – non-current	–	0.1
Other receivables – current	1.6	3.1
Less: provisions for impairment	(3.5)	(3.7)
Cash and cash equivalents (note 21)	45.5	29.4
	250.8	214.2

Financial liabilities at amortised cost:
Trade and other payables ii (note 22):
Trade payables	(62.5)	(66.8)
Accruals – current iii	(24.2)	(29.4)
Other payables – current	(2.8)	(1.0)
Lease liabilities – current and non-current (note 24)	(28.7)	(30.6)
Borrowings (note 25):
Shareholder loan from non-controlling interest	(3.9)	(3.9)
Bank borrowings unsecured	–	(2.8)
Bank borrowings secured	(44.9)	–
Bank overdrafts secured	(1.4)	(2.1)
	(168.4)	(136.6)

i. Excludes non-nn-financial assets of $1.0m (2022 – $0.6m) and those nase financial assets measured at fair value of $0.5m (2022 – $0.6m).

ii. Excludes non-current payables of $1.1m (2022 – $0.8m) as these are non-na-financial liabilities.

iii. Excludes accruals of $26.5m (2022 – $27.5m) recognised under IAS 19 and IFRS 2 that are outside the scope of IFRS 7.

iv. Excludes non-s non-financial liabilities of $0.3m (2022 – $0.4m) and nand financial liabilities measured at fair value of $0.1m (2022 – $0.1m ).

Amounts recognised in prot or losrofit or loss in relation to nantion to financial instruments carried at amortised cost were:

	2023	2022
	$m	$m
Net foreign exchange gains/(losses) included in operating income
and other operating expenses (note 4)	0.8	(0.3)
Net foreign exchange gains/(losses) included in net nd in net finance expense
(note 8)	(0.5)	0.2
Interest received on bank balances and deposits (note 8)	0.2	0.4
Bank fees and commissions (note 8)	(2.9)	(2.1)
Other naer finance income (note 8)	0.1	0.1

(b) Financial Instruments Measured at Fair Value

(i) Valuation Techniques used to Determine Fair Values

There have been no changes to the valuation techniques used during the year.

The listed equity investments and mutual funds (note 17) are equity instruments measured at fair value

through prot ogh profit or loss (“FVTPL”), with the fair value based on their current bid prices in an active market,

which is considered to be the most representative of fair value, at the balance sheet date. The fair

value gain for the year was $0.1m on these instruments (2022 – $nil) recognised in other naer finance

income (note 8).

The fair value of the convertible ntible financing provided to Wells Data Labs was determined by considering

the probability weighted average discounted cash ows of tash flows of the different scenarios using a discount rate

of 13% (2022 – 12%). The most signicaificant unobservable inputs to the fair value calculation are the

probabilities of a conversion to equity and change of control assumptions. The fair value at 31

December 2023 was $2.2m (2022 – $2.9m) (note 17), with a fair value loss of $0.7m (2022 – $0.2m

gain) recognised in net nanet finance expense during the year (note 8). At 31 December 2023, management

considers there to be no reasonable changes in unobservable inputs that would result in a signicant a significant

change in fair value.

The following instruments do not qualify for measurement at either amortised cost or at fair value

through other comprehensive income (“FVTOCI”). Therefore they are nancial inste financial instruments that have

mandatorily been measured at FVTPL:

• The fair value of forward foreign exchange contracts is determined by comparing the cash owash flows

generated by the contract with the coterminous cash ows pash flows potentially available in the forward

foreign exchange market on the balance sheet date. Details of the fair value gains and losses

recognised during the year on derivative contracts are given in note 28.

• The fair value of foreign currency swaps is determined by calculating the present value of the estimated

future cash ows in eah flows in each currency for both legs of the swap based on observable yield curves.

One leg’s present value is converted into the other currency using the current spot exchange rate .

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 206Strategic Report Corporate Governance Financial Statements Other Information

(b) Financial Instruments Measured at Fair Value continued

(ii) Fair Value Hierarchy

The following tables present the Group’s net nancial assets and financial assets and liabilities that are measured and

recognised at fair value at the year-end and show the level in the fair value hierarchy in which the fair

value measurements are categorised. There were no transfers between levels during the year.

	Fair value at
	31 December
	2023	Level 1	Level 2	Level 3
	$m	$m	$m	$m
Equity instruments at FVTPL
Listed equity investments and mutual funds	2.2	2.2	–	–
Debt instruments at FVTPL
Wells Data Labs convertible nancin financing	2.2	–	–	2.2
Current derivatives in a hedge
Derivative nancial assetse financial assets	0.3	–	0.3	–
Current derivatives held for trading
Derivative nancial assetse financial assets	0.2	–	0.2	–
Derivative nancial liabilitiese financial liabilities	(0.1)	–	(0.1)	–
	4.8	2.2	0.4	2.2
	Fair value at
	31 December
	2022	Level 1	Level 2	Level 3
	$m	$m	$m	$m
Equity instruments at FVTPL
Listed equity investments and mutual funds	1.9	1.9	–	–
Debt instruments at FVTPL
Well Data Labs convertible nancingible financing	2.9	–	–	2.9
Current derivatives in a hedge
Derivative nancial assetse financial assets	0.5	–	0.5	–
Current derivatives held for trading
Derivative nancial assetse financial assets	0.1	–	0.1	–
Derivative nancial liabilitiese financial liabilities	(0.1)	–	(0.1)	–
	5.3	1.9	0.5	2.9

The fair value hierarchy has the following levels:

Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability.

Level 3 – unobservable inputs used in the valuation .

• The fair values of non-US Dollar denominated nancial instrumented financial instruments are translated into US dollars

using the year-end exchange rate.

• The inputs used to determine the fair value of derivative ivative financial instruments are inputs other than

quoted prices that are observable and so the fair value measurement is categorised in Level 2 of the

fair value hierarchy.

• The fair value of listed equities and mutual funds are based on quoted market prices and therefore

the fair value measurements are categorised in Level 1 of the fair value hierarchy.

• Due to unobservable inputs used in the valuation, the fair value of the Wells Data Labs nabs financial

asset is a Level 3 measurement as per the fair value hierarchy .

(iii) Amounts Recognised in Prot or Loofit or Loss

During the year, the following gains and losses were recognised in relation to nanon to financial instruments

measured at FVTPL:

	2023	2022
	$m	$m
Fair value gains on the listed equity investments and mutual funds (note 8)	0.1	–
Fair value (loss)/gain on Wells Data Labs convertible nane financing (note 8)	(0.7)	0.2
Fair value gains on money market funds (note 8)	–	0.1
Fair value gains on nancial inst on financial instruments mandatorily measured
at FVTPL:
Net fair value gains on derivative rivative financial instruments (note 4)	0.3	–
Net fair value gains on derivative nancve financial instruments (note 8)	0.1	0.6

The fair value gains on the listed investments and mutual funds and the Wells Data Labs convertible

nafinancing are unrealised gains recognised in prot or ld in profit or loss attributable to balances held at the end of

the reporting period.

(iv) Fair Values of Other Financial Instruments Carried at Amortised Cost

Due to their short-term nature, the carrying values of trade receivables, accrued revenue, contract

assets, other receivables considered to be o be financial assets, cash and cash equivalents, trade payables,

accruals and other payables considered to be nancialo be financial liabilities, bank overdrafts and bank borrowings

approximates their fair value.

Notes to the Consolidated Financial Statements continued

29. Financial Instruments continued

Hunting PLC Annual Report and Accounts 2023 207Strategic Report Corporate Governance Financial Statements Other Information

30. Financial Risk Management

The Group’s activities expose it to certain naain financial risks, namely market risk (including foreign exchange risk and interest rate risk), as well as credit risk and liquidity risk. The Group’s risk management strategy

seeks to mitigate potential adverse effects on its cts on its financial performance. As part of its strategy, both primary and derivative navative financial instruments are used to hedge certain risk exposures.

There are clearly dened objectives clearly defined objectives and principles for managing nancial risks managing financial risks established by the Board of Directors, with policies, parameters and procedures covering the specic areas o specific areas of funding, banking

relationships, foreign exchange and interest rate exposures and cash management, together with the investment of surplus cash. The Group’s treasury function is responsible for implementing the policies and

for providing a centralised service to the Group for funding, foreign exchange and interest rate management and counterparty risk management. It is also responsible for identifying, evaluating and hedging

nancial risksfinancial risks in close cooperation with the Group’s operating companies.

(a) Market Risk: Foreign Exchange Risk

The Group’s international base is exposed to foreign exchange risk from its investing, nanng, financing and operating activities, particularly in respect of Sterling, Chinese Renminbi, Saudi Arabia Riyal and Canadian

Dollars. Foreign exchange risks arise from future commercial transactions and cash ows, flows, and from recognised monetary assets and liabilities that are not denominated in the functional currency of the

Group’s local operations.

Foreign exchange rates that the Group has the largest exposures to are:

	Sterling		Chinese Renminbi		Saudi Arabia Riyal		Canadian Dollars
	2023	2022	2023	2022	2023	2022	2023	2022
Average exchange rate to US Dollars	0.80	0.81	7.07	6.73	3.75	3.75	1.35	1.30
Year-end exchange rate to US Dollars	0.79	0.83	7.08	6.92	3.75	3.75	1.33	1.35

The aggregate net foreign exchange gains recognised in proed in profit or loss during the year were $0.3m (2022 – $nil).

(i) Transactional Risk

The exposure to exchange rate movements in signiements in significant future commercial transactions and cash o and cash flows is hedged by using forward foreign exchange contracts. Certain forward foreign exchange contracts

have been designated as hedging instruments of highly probable forecast transactions. Treasury engages with business units to help identify transactional exposures. External hedging activity is then

performed by Treasury on behalf of the business units to ensure that transactional risk is managed appropriately and in accordance with Treasury policy. Exposures are also identied and identified and hedged, if necessary,

on an ad-hoc basis, such as when a purchase order in a foreign currency is placed. Currency exposures arise where the cash ows are not ih flows are not in the functional currency of the entity. Exposures arising from

committed long-term projects beyond a 12-month period are also identieentified.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 208Strategic Report Corporate Governance Financial Statements Other Information

(a) Market Risk: Foreign Exchange Risk continued

(i) Transactional Risk continued

The table below shows the carrying values of the Group’s s financial instruments at 31 December, including derivative ivative financial instruments, on which exchange differences would potentially be recognised in the

consolidated income statement in the following year.

				Currency of denomination
		US	UAE	Singapore	Saudi Arabia	Chinese	Other
	Sterling	Dollars	Dirham	Dollars	Riyal	Renminbi	currencies	Total
At 31 December 2023	$m	$m	$m	$m	$m	$m	$m	$m
Functional currency of Group’s entities:
Sterling	–	(1.0)	–	–	–	–	–	(1.0)
US Dollars	(2.0)	–	(1.7)	(0.6)	2.2	(1.6)	(0.2)	(3.9)
Canadian Dollars	–	(0.5)	–	–	–	–	–	(0.5)
Euro	(0.2)	1.1	–	–	–	–	–	0.9
Chinese Renminbi	–	(0.5)	–	–	–	–	–	(0.5)
	(2.2)	(0.9)	(1.7)	(0.6)	2.2	(1.6)	(0.2)	(5.0)

				Currency of denomination
		US	UAE	Singapore	Saudi Arabia	Chinese	Other
	Sterling	Dollars	Dirham	Dollars	Riyal	Renminbi	currencies	Total
At 31 December 2022	$m	$m	$m	$m	$m	$m	$m	$m
Functional currency of Group’s entities:
Sterling	–	(2.2)	–	–	–	–	(0.1)	(2.3)
US Dollars	(2.8)	–	(1.2)	(1.3)	1.4	2.4	(0.1)	(1.6)
Canadian Dollars	–	(1.5)	–	–	–	–	–	(1.5)
Euro	(0.1)	0.6	–	–	–	–	–	0.5
Chinese Renminbi	–	(0.1)	–	–	–	–	–	(0.1)
	(2.9)	(3.2)	(1.2)	(1.3)	1.4	2.4	(0.2)	(5.0)

Financial instruments comprise cash balances, trade and other receivables, accrued revenue, trade and other payables, accrued expenses, nses, finance lease liabilities and intra-Group balances. Derivatives

designated in a cash n a cash flow hedge are excluded as fair value gains and losses arising on these are recognised in other comprehensive income.

(ii) Translational Risk

Foreign exchange risk also arises from nancial assets financial assets and liabilities not denominated in the functional currency of an entity’s operations. Forward foreign exchange contracts are used to manage the exposure

to changes in foreign exchange rates. Where appropriate, hedge accounting is applied to the forward foreign exchange contracts and the hedged item to remove any accounting mismatch.

Foreign exchange risk also arises from the Group’s investments in foreign operations. This has previously been hedged using foreign exchange swaps that have been designated in a net investment hedge to

hedge the foreign currency translation risk. The foreign exchange exposure arising from the translation of its net investments in foreign operations into the Group’s presentation currency of US Dollars has also

previously been managed by designating any borrowings that are not US Dollar denominated as a hedge of the net investment in foreign operations. The foreign exchange exposure primarily arises from

Sterling and Canadian Dollar denominated net investments. The accumulated foreign exchange net post-tax gains included in the currency translation reserve in respect of net investment hedges at the

beginning and end of the year is $25.0m.

(b) Market Risk: Interest Rate Risk

Variable interest rates on cash at bank, short-term deposits, overdrafts and borrowings expose the Group to cash ow interesh flow interest rate risk, and k, and fixed interest rates on loans and short-term deposits expose the

Group to fair value interest rate risk. The Group’s treasury function manages the Group’s exposure to interest rate risk and uses interest rate swaps and caps, when considered appropriate.

Notes to the Consolidated Financial Statements continued

30. Financial Risk Management continued

Hunting PLC Annual Report and Accounts 2023 209Strategic Report Corporate Governance Financial Statements Other Information

The Group’s credit risk arises from its cash at bank and in hand, investments, derivative native financial

instruments, accrued revenue, outstanding trade receivables, other receivables and contract assets.

At the year-end, the Group had credit risk exposure to a wide range of counterparties. Credit risk

exposure is continually monitored and no individual exposure is considered to be signicant ificant in the

context of the ordinary course of the Group’s activities whether through exposure to individual

customers, specic industomers, specific industry sectors and/or regions.

(i) Credit Risk: Total Cash and Bank

Hunting PLC’s Board approves the treasury policies that determine which counterparties can be used.

Due diligence is carried out prior to the authorisation of a bank or n of a bank or financial institution as an approved

counterparty. For banks and nannd financial institutions, exposure limits are set for each approved

counterparty, as well as the types of transactions that may be entered into. Approved institutions that

the Group’s treasury function can invest surplus cash with must all have a minimum A2, P2 or F2

short-term rating from Standard & Poor’s, Moody’s or Fitch rating agencies, respectively.

At the year-end, cash at bank and in hand totalled $45.5m (2022 – $29.4m), with $31.2m (2022 –

$19.7m) deposited with banks with Fitch short-term ratings of F1 to F1+. Of the remaining $14.3m

(2022 – $9.7m), $11.6m (2022 – $6.2m) was held with two nah two financial institutions within mainland China

which, given the Group’s operations in this jurisdiction, were deemed necessary. Despite not having

formal credit ratings from any of the ratings agencies mentioned above, an internal assessment

determined that the banks’ credit prolet profiles were appropriate for the amounts held on deposit. There are

no formal restrictions on this cash as such; however, prior approval would be required from various

state authorities in China before any cash could be paid offshore. This cash balance could be used by

the Group to service intercompany loans, which total $1.7m at the year-end. In order for the Group to

access the balance of $9.9m, a dividend would need to be declared.

During the year, the treasury function invested surplus cash in-line with its cash management and

investment policies in short-term deposits. The use of these deposits enables the treasury function to

diversify its counterparty concentration risk by depositing funds with various nancial instarious financial institutions and

improve the yields on a portion of its surplus cash.

The credit ratings of the nane financial institutions where the Group’s total cash and bank balances have

been invested are listed below:

			2023	2022
		Credit rating	$m	$m
Cash at bank and in hand	Fitch	F1 to F1+	31.2	19.7
Cash at bank and in hand	n/a		14.3	9.7
Derivative nancial assetse financial assets	Fitch	AA-(dcr)	0.5	0.2
Derivative nancial assetse financial assets	Fitch	A+(dcr)	–	0.4

The credit risk of foreign exchange contracts is calculated before the contract is acquired and

compared to the credit risk limit set for each counterparty. Credit risk is calculated as a xed s a fixed

percentage of the nominal value of the instrument.

Notes to the Consolidated Financial Statements continued

30. Financial Risk Management continued

(ii) Credit Risk: Receivables

The Group makes sales to a large number of different customers; however a signicant pficant proportion of

sales are made to service companies in the oil and gas sector. The majority of the Group’s customers

are based in North America. On a quarterly basis, the Group’s entities submit information to the head

ofce on ifice on individual receivables balances greater than $0.2m, on individual receivable balances that are

both greater than $32,500 and 60 days overdue, and on quarterly average receivables balances. At

the year-end, trade receivables of $179.4m (2022 – $158.9m) comprised individual balances greater

than $0.2m, with no individual customer balance representing more than 9% (2022 – 7%) of the

year-end receivables balance of $204.7m (2022 – $183.1m).

The risk of customer default for outstanding trade receivables, accrued revenue and contract assets is

continuously monitored. Credit account limits are set locally by management and are primarily based

on the credit quality of the customer taking into account past experience through trading relationships

and the customer’s nancial posits financial position. The probability that a customer would default has remained

broadly at in 2023. Tdly flat in 2023. The Group used Credit Benchmark software to monitor the creditworthiness and

changing credit prolet profiles of its customers. Credit Benchmark uses a similar ratings framework to the

main credit ratings agencies for classifying the credit quality of a business. However, Credit Benchmark

ratings are based on contributed risk views from leading global nancial inst global financial institutions, including 15

Global Systemically Important Banks domiciled in the US, Continental Europe, Switzerland, the UK,

Japan, Canada, Australia and South Africa. The contributions are anonymised, aggregated and

published twice monthly in the form of Credit Consensus Ratings and Aggregate Analytics.

Although in most cases the Credit Benchmark consensus rating of a business is based on a number

of contributing views, there are instances where there is only a single source on which the rating is

based. During 2023, 38% of sales, which is more than $347m (2022 – 37%/$263m) of the Group’s

revenue, were made to customers with a Credit Benchmark investment-grade rating of bbb or higher,

as shown in the table below. This includes customers with a single-source rating, whereby the rating is

based on only a single source rather than a consensus rating which has been derived from a number

of contributing views.

	% of Revenue
Credit Benchmark – Credit Consensus Ratings	2023	2022
aa	8	2
a	22	16
bbb	8	19
bb	7	3
b	–	3
No rating	55	57

To reduce credit risk exposure from outstanding receivables, the Group has taken out credit insurance

with an external insurer, subject to certain conditions. Details of the impairment of trade and other

receivables can be found in note 18.

Hunting PLC Annual Report and Accounts 2023 210Strategic Report Corporate Governance Financial Statements Other Information

(iii) Credit Risk: Other Financial Assets

The Group operates a deneefined bened benefit pension scheme in the US, which is unfunded. Contributions

are paid into a separate investment vehicle and invested in a wide portfolio of US mutual funds.

Investments at the year-end amounted to $2.2m (2022 – $1.9m) and are expected to be fully

recovered.

The Group has provided Wells Data Labs with $2.5m in convertible ntible financing, the fair value of which

was $2.2m at 31 December 2023 (2022 – $2.9m). The investment is considered to have a low credit

risk, although the credit risk of the debt instrument has increased during the year. This increased risk

has been reected iflected in the fair value calculation of the debt instrument.

(d) Liquidity Risk

(i) Bank Facilities

The Group’s treasury function ensures that there are sufcientficient committed facilities available to the

Group, with an appropriate maturity prole profile, to provide operational exibility and t flexibility and to support investment

in key Group projects.

The Group has sufcificient credit facilities to meet both its long- and short-term requirements. The

Group’s treasury function ensures exibility in funding flexibility in funding by maintaining availability under committed

credit facilities. The Group’s credit facilities are provided by a variety of funding sources and total

$193.8m (2022 – $186.9m) at the year-end.

The Group’s undrawn facilities at the year-end were as follows:

	2023	2022
	$m	$m
Secured committed facilities	103.1	155.0
Unsecured uncommitted facilities	34.4	31.9
	137.5	186.9

Secured Committed Facilities: Asset Based Lending Facility

The ABL facility of $150.0m, arranged with a four-year term, matures on 7 February 2026. An accordion

feature of up to $50.0m was also agreed during facility negotiations. This feature allows the Group to

increase the total facility quantum to $200.0m, subject to further credit approval by the ABL lenders.

The Group’s borrowing capacity is linked to secured asset values. The three main asset classes that

form the “Borrowing Base” against which bank capital is advanced are North American-based trade

receivables, inventories and freehold property. The Group is required to submit various reports to the

facility agent each month so that any uctuany fluctuation in the carrying values of these assets are communicated

to the lenders, and so that the borrowing base may be recalibrated based on the most recent asset

values. Accordingly, availability under the ABL facility will y will fluctuate to the extent that the underlying

asset values change over time, either up or down. The carrying amounts of the assets pledged as

security is discussed in notes 11, 18 and 20.

The ABL nancial coThe ABL financial covenants are only measured under certain conditions, principally once utilisation

of the facility goes through a predened thfined threshold i.e. 87.5% of the “Line Cap” (“Line Cap” is dened afined as

the lesser of the total facility amount and the Borrowing Base), at which point the Fixed Charge Cover

Ratio (“FCCR”) is measured and must be complied with. The FCCR is a nanR is a financial covenant that looks

back over the trailing 12-month period to assess whether EBITDA (as denITDA (as defined by the ABL facility

agreement) covers the Group’s Fixed Charges (as deneefined by the facility agreement) at a ratio of at

least 1:1. Management has detailed the wider considerations regarding going concern and future

covenant compliance in the Going Concern Statement on page 107.

During 2023, the Group began drawing down on the ABL to fund its working capital requirements.

However, utilisation of the facility has not exceeded the threshold of 87.5% of the Line Cap and,

therefore, formal testing of the FCCR ng of the FCCR financial covenant has not been required.

In January 2023, one of the banks in the ABL lending group provided a $2.4m letter of credit in favour

of one of the Group’s major customers, which has an expiration date of February 2026. This amount

has been permanently carved out of the total facility amount that Hunting is able to utilise under the ABL.

Unsecured Uncommitted Facilities

To support the CNOOC order in China, three local facilities were arranged. One facility is with the

Bank of Jiangsu for CNY50.0m and another is with ICBC for CNY60.0m, both maturing in the second

half of 2024. A third facility for CNY165.0m was provided by HSBC China in Suzhou. There is no

formal termination date on this facility, which means it is available until further bilateral agreement.

These facilities, totalling CNY275.0m ($38.9m; 31 December 2022 – $34.7m), have all been arranged

on an uncommitted, unsecured basis and are only available to the Group’s Chinese subsidiary.

Interest on all three facilities is based on the China Loan Prime Rate, which at 31 December 2023

stood at 3.45% (31 December 2022 – 3.65%). At 31 December 2023, $9.4m of the facilities were

utilised (31 December 2022 – $2.8m).

(ii) Management of Cash

The Group needs to ensure that it has sufcient liquid funds it has sufficient liquid funds available to support its working capital

and capital expenditure requirements and that adequate liquidity levels are maintained. All subsidiaries

submit weekly cash forecasts to the treasury function to enable it to monitor the Group’s requirements.

A consolidated 12-week forecast, produced weekly, is maintained by the Group’s treasury function,

which monitors long- and short-term liquidity requirements of the Group and also identieentifies any

unexpected variances week-on-week.

Treasury’s cash management objective is to centrally manage and, where possible, to concentrate

the Group’s cash and bank balances back to the treasury function to ensure that funds are managed

in the best interests of the Group. Short-term cash balances, together with undrawn facilities, enable

the treasury function to manage its day-to-day liquidity risk. Any short-term surplus is invested in

accordance with Board-approved treasury policy. This strategy is subject to legislative and regulatory

constraints in certain jurisdictions such as exchange control restrictions and minimum capital

requirements. Where cash concentration cannot be applied, Group treasury approves all local

banking arrangements, including the opening and closing of bank accounts and the investment of

surplus cash via bank deposits.

Notes to the Consolidated Financial Statements continued

30. Financial Risk Management continued

Hunting PLC Annual Report and Accounts 2023 211Strategic Report Corporate Governance Financial Statements Other Information

(d) Liquidity Risk continued

(ii) Management of Cash continued

Cash Management Arrangements

In respect of the UK business units and head ofce companies, and head office companies, the treasury function has arranged

a cash concentration structure with HSBC Bank UK and Barclays Bank UK PLC whereby, at the close

of each business day, any surplus balances held in certain subsidiaries’ bank accounts are swept to

treasury-owned accounts (“pool header” accounts), with a corresponding adjustment to the

intercompany loan receivable, or payable, between that subsidiary and treasury. Similarly, any

end-of-day de-of-day deficit in the same group of subsidiary accounts is funded by a cash sweep from the

treasury-owned pool header accounts, and the corresponding intercompany loan is adjusted

accordingly. This arrangement enables more efcient utilisate efficient utilisation of UK-based entities’ surplus cash

and at the same time allows the treasury function to meet any short-term funding needs of the UK

business units in a more coordinated fashion and from one single pool of liquidity.

In addition, a similar cash concentration structure has been organised with Wells Fargo Bank, N.A.

in the US, whereby surplus and decid deficit cash balances are swept to and from a single pool header

account, held by one central US subsidiary, with a corresponding movement in the respective

companies’ intercompany loan balance. Treasury has systems in place that allow for same-day

centralisation of net surplus cash balances in the US to the UK, or indeed to fund any net cash decsh deficit

in the US cash concentration structure. As above, this arrangement allows treasury to efcificiently

repatriate surplus operational cash from the US to the UK on a daily basis, if deemed cost effective to

do so, and the most appropriate application of that cash can then be decided upon by treasury. This

arrangement also allows treasury to meet any short-term funding needs of the Group’s US-based

business units from cash resources held in, or borrowing facilities that have been arranged by,

treasury in the UK.

For other regions, such as Canada and Singapore, while formal sweeping arrangements are not in

place, treasury monitors balances on a daily basis and periodically transfers surplus cash to the centre

using similar intercompany loan arrangements as described above. The Group’s interests in China are

subject to the most highly regulated environment of all the Group’s active jurisdictions, in regards to

cash management operations. The free movement of cash both to and from China is a highly

restricted activity and, as a consequence, treasury is unable to arrange intercompany loans in the

same way as it does for the rest of the Group. Treasury has organised banking arrangements with

HSBC in China on behalf of the Group’s Chinese business units and, therefore, has visibility of any

cash balances held with HSBC and transaction data for these accounts via HSBC’s proprietary online

banking system. For balances held at other Chinese banks, treasury has visibility either via its SWIFT

connection or from information supplied by Hunting’s local entity .

Deposits and Investments of Surplus Cash

Short-term deposits are held for the purpose of meeting short-term cash commitments, minimising

counterparty concentration risk and improving cash investment returns. Short-term deposits of

surplus cash are made for varying periods of between one day and three months, depending on the

immediate cash requirements of the Group. These deposits earn interest at the respective short-term

deposit rates.

During the year, the treasury function has invested surplus cash in deposits in-line with its cash

management and investment policies that would enable a fair return, whilst maintaining the ability

to access the cash easily. The use of these deposits enables the treasury function to diversify its

counterparty concentration risk by depositing funds with various nancial institarious financial institutions and improve the

yields on a portion of its surplus cash. However, as the working capital requirements of the Group

changed throughout the year, the use of these cash products greatly reduced and by the end of 2023

there were no balances held in deposits.

Cash at bank earns interest at nterest at floating rates based on daily bank deposit rates.

(iii) Future Cash Flows of Financial Liabilities

The following tables analyse the expected timings of cash outows for eaflows for each of the Group’s non-

derivative nancial liabilitiese financial liabilities. The tables analyse the cash outows the cash outflows into relevant maturity groupings

based on the remaining period at the balance sheet date to the contractual maturity dates of the

nancial liabilitiesfinancial liabilities. The amounts disclosed in the tables are the contractual, undiscounted cash owed cash flows

and include interest cash st cash flows and other contractual payments, where applicable, so will not always

reconcile with the amounts disclosed in the consolidated balance sheet. The carrying values are the

amounts in the consolidated balance sheet and are the discounted amounts. Balances due within one

year have been included in the maturity analysis at their carrying amounts, as the impact of

discounting is not signicants not significant .

Notes to the Consolidated Financial Statements continued

30. Financial Risk Management continued

Hunting PLC Annual Report and Accounts 2023 212Strategic Report Corporate Governance Financial Statements Other Information

(d) Liquidity Risk continued

(iii) Future Cash Flows of Financial Liabilities continued

			2023
	On demand	Between
	or within	one and	After		Carrying
	one year	vfive years	vfive years	Total	value
	$m	$m	$m	$m	$m
Non-derivative
nancial liabilitiesfinancial liabilities:
Trade payables	62.5	–	–	62.5	62.5
Accruals	24.2	–	–	24.2	24.2
Other payables	2.8	–	–	2.8	2.8
Lease liabilities	8.2	16.2	10.3	34.7	28.7
Bank borrowings secured	48.6	4.1	–	52.7	44.9
Bank overdrafts secured	1.4	–	–	1.4	1.4
Shareholder loan from non-controlling interest	–	–	3.9	3.9	3.9
Total	147.7	20.3	14.2	182.2	168.4

			2022
	On demand	Between
	or within	one and	After		Carrying
	one year	ve yearfive years	ve yearfive years	Total	value
	$m	$m	$m	$m	$m
Non-derivative
nancial liabilitiesfinancial liabilities:
Trade payables	66.8	–	–	66.8	66.8
Accruals	29.4	–	–	29.4	29.4
Other payables	1.0	–	–	1.0	1.0
Lease liabilities	8.9	16.4	9.5	34.8	30.6
Bank borrowings unsecured	2.8	–	–	2.8	2.8
Bank borrowings secured	0.7	1.6	–	2.3	–
Bank overdrafts secured	2.1	–	–	2.1	2.1
Shareholder loan from non-controlling interest	–	–	3.9	3.9	3.9
Total	111.7	18.0	13.4	143.1	136.6

The Group had no net settled nancial liabilit settled financial liabilities at the year-end (2022 – none).

The table below analyses the Group’s derivative nancve financial instruments, which will be settled on a gross

basis, into maturity groupings based on the period remaining from the balance sheet date to the

contractual maturity date.

The amounts disclosed in the table are the contractual, undiscounted cash owash flows.

		2023			2022
	On demand	Between		On demand	Between
	or within	one and		or within	one and
	one year	vfive years	Total	one year	ve yearfive years	Total
	$m	$m	$m	$m	$m	$m
Currency
derivatives:
InowInflows	58.2	–	58.2	47.5	–	47.5
Outowstflows	(57.9)	–	(57.9)	(47.1)	–	(47.1)

(e) Capital Risk Management

The Group’s objectives, policies and processes for managing capital are outlined in the Strategic

Report within the Group Funding section on pages 58 and 59. Within this section, the Group

provides a denitiofinition of capital, provides details of the external nnal financial covenants imposed, key

measures for managing capital and the objectives for managing capital. Quantitative disclosures

are made together with the parameters for meeting external nanal financial covenants.

31. Financial Instruments: Sensitivity Analysis

The following sensitivity analysis is intended to illustrate the sensitivity to changes in market variables

on the Group’s nancial instrumentss financial instruments and show the impact on prot or loss andfit or loss and shareholders’ equity.

Financial instruments affected by market risk include cash at bank and in hand, trade and other

receivables, trade and other payables, lease liabilities, borrowings and derivative nancial instruments financial instruments.

The sensitivity analysis relates to the position as at 31 December 2023. The analysis excludes the

impact of movements in market variables on the carrying value of pension and other post-retirement

obligations, provisions and non-nancial asset-financial assets and liabilities of foreign operations.

The following assumptions have been made in calculating the sensitivity analysis:

• Foreign exchange rate and interest rate sensitivities have an asymmetric impact on the Group’s

results, that is an increase in rates does not result in the same amount of movement as a decrease

in rates;

• For oatinr floating rate assets and liabilities, the amount of asset or liability outstanding at the balance

sheet date is assumed to be outstanding for the whole year;

• Fixed-rate ne financial instruments that are carried at amortised cost are not subject to interest rate risk

for the purpose of this analysis; and

• The carrying values of lues of financial assets and liabilities carried at amortised cost do not change as

interest rates change.

Positive gurtive figures represent an increase in prot or eqrofit or equity.

Notes to the Consolidated Financial Statements continued

30. Financial Risk Management continued

Hunting PLC Annual Report and Accounts 2023 213Strategic Report Corporate Governance Financial Statements Other Information

(a) Interest Rate Sensitivity

(i) US Interest Rates

The sensitivity rate of 2.0% (2022 – 1.0%) for US interest rates represents management’s assessment

of a reasonably possible change, based on historical volatility and a review of analysts’ research and

banks’ expectations of future interest rates.

The impact on the consolidated income statement, with all other variables held constant, in applying

the sensitivity above results in a $0.6m (2022 – $0.1m) increase or decrease in post-tax prot fox profit for an

increase or decrease in US interest rates. There is no impact on other comprehensive income (“OCI”)

for a change in US interest rates.

(ii) Other Interest Rates

For all other interest rates, there is an immaterial impact on post-tax prot ox profit or loss for any reasonably

possible changes in other interest rates, based on historical volatility and a review of analysts’ research

and banks’ expectations of future interest rates. There is no impact on OCI for a change in other

interest rates.

(b) Foreign Exchange Rate Sensitivity

Management has considered the impact of changes to the various foreign exchange rates on the

exposed nancialexposed financial assets and liabilities disclosed in note 30(a)(i). The sensitivity rates selected range

between 3-5% and represent management’s assessment of a reasonably possible change, based

on historical volatility and a review of analysts’ research and banks’ expectations of future foreign

exchange rates. There is an immaterial impact on post-tax prot ox profit or loss and on OCI for any reasonably

possible changes in the foreign exchange rates.

32. Post-employment Benets Benefits

(a) Dened) Defined Contribution Arrangements

A number of dened cfined contribution arrangements, which are open to current employees, are operated

across the Group. Employer contributions to these arrangements are charged directly to prot andly to profit and

loss and in 2023 these totalled $8.2m (2022 – $7.2m).

(b) Unfunded Dened Unfunded Defined Benet Schemes Benefit Schemes

(i) US De) US Defined Benet Snefit Scheme

The Group operates a cash balance arrangement in the US for certain executives. Members build up

benets in thnefits in this arrangement by way of notional contributions and notional investment returns. Actual

contributions are paid into an entirely separate investment vehicle held by the Group, which is used to

pay benets dnefits due from the arrangement when a member retires. Under IAS 19, the cash balance

arrangement is accounted for as an unfunded dened bfined benet senefit scheme.

The amounts recognised in the consolidated income statement during the year were $0.2m

(2022 – $0.1m) reem) reflecting the employer’s current service cost (charged to administrative expenses)

and a net $nil (2022 – $nil) relating to fair value gains and losses on the listed equities and mutual

funds and interest charged on the benet obligations benefit obligations.

Movements in the present value of the obligation for the unfunded denefined benet USfit US

deferred compensation plan

	2023	2022
	$m	$m
Present value of the obligation at the start of the year	1.9	1.9
Current service cost (equal to the notional contributions)	0.2	0.1
Remeasurement – excess of notional investment returns
over interest cost	–	(0.1)
Interest on beneterest on benefit obligations	0.1	–
Present value of the obligation at the end of the year	2.2	1.9

The obligation of $2.2m (2022 – $1.9m) is presented in the consolidated balance sheet in non-current

payables (note 22).

(ii) Middle East Dened Benet Schemes(ii) Middle East Defined Benefit Schemes

The Group operates two unfunded dened benet pension unfunded defined benefit pension schemes in Dubai and Saudi Arabia,

whereby local law requires payment to be made to an employee when they leave their employment

with the business unit based on their salary and number of years of service. The combined obligation

at the year-end was $0.8m (2022 – $0.7m), with $0.1m (2022 – $0.2m) recognised in the consolidated

income statement during the year. The obligation is presented in non-current other payables (note 22).

33. Share Capital and Share Premium

The Company’s share capital comprises a single class of Ordinary shares, which are classied as equitye classified as equity.

	Ordinary	Ordinary
	shares of	shares of	Share
	25p each	25p each	premium
	Number	$m	$m
At 31 December 2021, 2022 and 2023	164,940,082	66.5	153.0

There are no restrictions attached to any of the Ordinary shares in issue and all Ordinary shares

carry equal voting rights. The rights attached to the Company’s Ordinary shares are summarised

on page 161. All of the Ordinary shares in issue are fully paid.

At 31 December 2023, 6,591,918 (2022 – 5,370,963) Ordinary shares were held by an Employee

Benet Tnefit Trust. Details of the carrying amount are set out in note 35.

Notes to the Consolidated Financial Statements continued

31. Financial Instruments: Sensitivity Analysis continued

Hunting PLC Annual Report and Accounts 2023 214Strategic Report Corporate Governance Financial Statements Other Information

34. Other Components of Equity

			2023
		Share-based	Currency	Capital
	Merger reserve	payments reserve	translation reserve	redemption reserve	Hedge reserve	Total
	$m	$m	$m	$m	$m	$m
At 1 January 2023	11.8	15.9	(13.0)	0.8	0.3	15.8
Exchange adjustments	–	–	3.8	–	–	3.8
Share options and awards:
– value of employee services	–	12.3	–	–	–	12.3
– discharge	–	(8.3)	–	–	–	(8.3)
Fair value gains and losses:
– losses originating on cash ow hash flow hedges arising during the year	–	–	–	–	(0.3)	(0.3)
– losses transferred to balance sheet on disposal of cash ow hedsh flow hedges	–	–	–	–	0.3	0.3
– gains reclassied to proified to profit or loss on disposal of cash ow heash flow hedges	–	–	–	–	(0.3)	(0.3)
– taxation	–	–	–	–	0.1	0.1
Transfer between reserves (note 35)	(11.8)	–	(2.7)	–	–	(14.5)
At 31 December 2023	–	19.9	(11.9)	0.8	0.1	8.9

			2022
		Share-based	Currency	Capital
	Merger reserve	payments reserve	translation reserve	redemption reserve	Hedge reserve	Total
	$m	$m	$m	$m	$m	$m
At 1 January 2022	25.4	15.6	(3.8)	0.8	–	38.0
Exchange adjustments	–	–	(9.2)	–	–	(9.2)
Share options and awards:
– value of employee services	–	9.4	–	–	–	9.4
– discharge	–	(9.1)	–	–	–	(9.1)
Fair value gains and losses:
– gains originating on cash ow hesh flow hedges arising during the year	–	–	–	–	0.4	0.4
– gains transferred to balance sheet on disposal of cash l of cash flow hedges	–	–	–	–	(0.1)	(0.1)
– losses reclassiesified to proo profit or loss on disposal of cash ow hash flow hedges	–	–	–	–	0.1	0.1
– taxation	–	–	–	–	(0.1)	(0.1)
Transfer between reserves (note 35)	(13.6)	–	–	–	–	(13.6)
At 31 December 2022	11.8	15.9	(13.0)	0.8	0.3	15.8

The merger reserve comprises the proceeds received, net of transaction costs, in excess of the nominal value of the Ordinary shares issued by way of the share placing completed on 31 October 2016. In

accordance with section 612 of the Companies Act 2006, the premium was credited to the merger reserve, instead of to the share premium account, because the share placing was pursuant to the Company

securing over 90% of another entity. The proceeds were used to pay down the Group’s borrowings at that time. The reserve is currently non-distributable and is transferred to distributable retained earnings

when the proceeds meet the denie definition of qualifying consideration. During the year, the remaining balance of $11.8m (2022 – $13.6m) was transferred from the merger reserve to retained earnings. This portion

of the reserve was considered to be realised, as the equivalent amount of the proceeds from the share placing in 2016 have now met the dent the definition of qualifying consideration.

The share-based payments reserve represents the Group’s obligation to settle share-based awards issued to its employees. When employees exercise their awards, the portion of the share-based payments

reserve which represents the share-based payment charge for those awards is transferred to retained earnings and the Group discharges its obligation.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 215Strategic Report Corporate Governance Financial Statements Other Information

The currency translation reserve contains the accumulated foreign exchange differences that arise

from the translation of the nancial st the financial statements of the Group’s foreign operations into US Dollars when

the Group’s entities are consolidated, together with exchange differences arising on foreign currency

loans used to nao finance foreign currency net investments. The currency translation reserve also includes

the accumulated foreign exchange net gains in respect of net investment hedges, which will be

released to the income statement on the disposal or dissolution of the relevant subsidiary. During the

year, there was a transfer of $2.7m between the currency translation reserve and retained earnings.

The capital redemption reserve is a statutory, non-distributable reserve into which amounts are

transferred following the purchase of the Company’s own shares out of distributable prots.fits.

The hedge reserve represents the accumulated fair value gains and losses in relation to the spot

component of forward foreign exchange contracts designated in a cash ow hedge cash flow hedge that were taken

out to hedge the purchase of an asset, such as property, plant and equipment or inventory, in a

foreign currency. The fair value gain or loss accumulated in the hedge reserve is transferred to the

cost of the asset when it is acquired.

35. Retained Earnings

	2023	2022
	$m	$m
At 1 January	609.3	612.4
Protfit/(loss) for the year	117.1	(4.6)
Remeasurement of dennt of defined benet peefit pension schemes net of tax (note 32)	–	0.1
Dividends paid to Hunting PLC shareholders	(15.0)	(13.6)
Treasury shares:
– purchase of treasury shares	(9.0)	(7.9)
– proceeds on disposal of treasury shares	0.3	0.2
Share options and awards:
– discharge	7.9	8.9
– taxation	0.3	0.2
Transfer between reserves (note 34)	14.5	13.6
At 31 December	725.4	609.3

The share options and awards taxation credit taken directly to equity of $0.3m (2022 – $0.2m)

comprised a deferred tax credit.

Notes to the Consolidated Financial Statements continued

34. Other Components of Equity continued

Retained earnings include the following amounts in respect of the carrying amount of treasury shares:

	2023	2022
	$m	$m
Cost:
At 1 January	(19.2)	(15.0)
Purchase of treasury shares	(9.0)	(7.9)
Cost of treasury shares disposed	6.0	3.7
At 31 December	(22.2)	(19.2)

At 31 December 2023, 6,591,918 Ordinary shares were held by the Employee Benee Benefit Trust

(2022 – 5,370,963). The Company purchased 2,935,096 (2022 – 2,130,142) additional treasury shares

during the year for $9.0m (2022 – $7.9m). The loss on disposal of treasury shares during the year,

which is recognised in retained earnings, was $5.7m (2022 – $3.5m).

36. Dividends Paid to Hunting PLC Shareholders

	2023		2022
	Cents		Cents
	per share	$m	per share	$m
Ordinary dividends:
2022 na2022 final dividend	4.5	7.1	–	–
2023 interim dividend	5.0	7.9	–	–
2021 nal dividend1 final dividend	–	–	4.0	6.4
2022 interim dividend	–	–	4.5	7.2
	9.5	15.0	8.5	13.6

A naA final dividend for 2023 of 5.0 cents per share has been proposed by the Board, amounting to an

estimated distribution of $7 .9m. The proposed nal ded final dividend is subject to approval by the shareholders

at the Annual General Meeting to be held on 17 April 2024 and has not been provided for in these

nafinancial statements. If approved, the dividend will be paid in Sterling on 10 May 2024, to shareholders

on the register on 12 April 2024, and the Sterling value of the dividend payable per share will be xed,e fixed,

and announced approximately two weeks prior to the payment date, based on the average spot

exchange rate over the three business days preceding the announcement date. Guidance on the

Company’s position on declaring and paying future dividends is provided within the Strategic Report

on page 10.

Hunting PLC Annual Report and Accounts 2023 216Strategic Report Corporate Governance Financial Statements Other Information

37. Share-based Payments

(a) 2009 Performance Share Plan (“PSP”)

(i) Time-based Awards and Options

The Company granted nil-cost, time-based share awards and options under the PSP between 2009

and 2013. Annual awards were made to employees, subject to continued employment during the

vesting period. There were no performance conditions attached. The nd. The final grant under the PSP

occurred in 2013 and vested in 2016 and option holders had seven years in which to exercise their

vested awards. Share awards can only be exercised by the employees to whom they were granted.

The PSP was replaced by the 2014 Hunting Performance Share Plan following shareholder approval

at the Annual General Meeting (“AGM”) of the Company on 16 April 2014. Details of the time-based

share option movements during the year are as follows:

	2023	2022
	Number of	Number of
	shares	shares
Outstanding at the beginning of the year	1,001	2,726
Vested and exercised during the year	(1,001)	(866)
Lapsed during the year	–	(859)
Outstanding and exercisable at the end of the year	–	1,001

The weighted average share price at the date of exercise during 2023 was 332.0 pence

(2022 – 282.0 pence).

Details of the time-based PSP awards and options outstanding at 31 December 2023 are as follows:

	2023	2022
	Number of	Number of	Normal
	shares	shares	vesting date	Expiry date
Date of grant:
20 March 2013	–	1,001	20 March 2016	20 March 2023
Outstanding and exercisable
at the end of the year	–	1,001

The fair value charge to the consolidated income statement attributable to the time-based PSP is $nil

(2022 – $nil).

(b) 2014 Hunting Performance Share Plan (“HPSP”)

The Company grants share awards annually to executive Directors and senior employees under the

rules of the HPSP, following shareholder approval at the Annual General Meeting (“AGM”) of the

Company on 16 April 2014. Awards are granted as either performance or time-based options or

awards at nil cost under the HPSP and can only be exercised by the employees to whom they were

granted. Share options which are subject to tax on exercise are granted to UK employees. Share

option holders have seven years in which to exercise their vested awards. Share awards which are

subject to tax on vesting are granted to employees resident in some other tax jurisdictions.

Notes to the Consolidated Financial Statements continued

(i) Performance-based Awards

The performance-based HPSP awards granted to the executive Directors and senior employees are

divided into ve trancnto five tranches of differing proportions. Each tranche is subject to a three-year vesting

period and Company performance is measured against various performance metrics, as shown in the

table below.

The performance period for awards granted on 6 March 2023 under the HPSP is 1 January 2023 to

31 December 2025. The vesting date of the 2023 award is 6 March 2026.

The award weightings for the years 2021, 2022 and 2023 are in the table below.

	Award	Award	Award
	weighting	weighting	weighting
	2023	2022	2021
Performance measure	%	%	%
Total Shareholder Return (“TSR”)
of a bespoke comparator group	20	25	35
Adjusted diluted earnings per share (“EPS”)	20	20	25
Return on average capital employed (“ROCE”)	25	20	25
Free cash ow (ash flow (“FCF”)	20	20	–
Balanced strategic scorecard – non-nancial KPIsfinancial KPIs
comprising Quality and Safety performance	15	15	15

Details of the performance-based HPSP award movements during the year are set out below:

	2023	2022
	Number of	Number of
	shares	shares
Outstanding at the beginning of the year	7,641,325	5,757,230
Granted during the year to executive Directors	1,231,216	1,506,466
Granted during the year to senior employees	1,263,083	2,170,275
Vested and exercised during the year	(178,211)	(95,035)
Lapsed during the year	(2,127,921)	(1,697,611)
Outstanding at the end of the year	7,829,492	7,641,325

Hunting PLC Annual Report and Accounts 2023 217Strategic Report Corporate Governance Financial Statements Other Information

(b) 2014 Hunting Performance Share Plan (“HPSP”) continued

(i) Performance-based Awards continued

Details of the performance-based HPSP awards outstanding at 31 December 2023 are as follows:

	2023	2022
	Number of	Number of	Normal
	shares	shares	vesting date	Expiry date
Date of grant:
11 March 2016 – options	–	22,065	11 March 2019	11 March 2026
19 April 2018 – options	–	3,485	19 April 2021	19 April 2028
21 March 2019 – options	–	2,272	21 March 2022	21 March 2029
3 March 2020 – options	1,566	303,732	3 March 2023	3 March 2030
3 March 2020 – awards	–	1,722,521	3 March 2023	–
4 March 2021 – options	365,499	346,282	4 March 2024	4 March 2031
4 March 2021 – awards	1,838,743	1,897,447	4 March 2024	–
4 March 2022 – options	505,420	506,709	4 March 2025	4 March 2032
4 March 2022 – awards	2,662,151	2,836,812	4 March 2025	–
6 March 2023 – options	425,229	–	6 March 2026	6 March 2033
6 March 2023 – awards	2,030,884	–	6 March 2026	–
Outstanding at the end
of the year	7,829,492	7,641,325
Exercisable at the end
of the year	1,566	27,822
Weighted average remaining
contractual life of options
outstanding at the end
of the year	8.25 years	8.27 years

In 2023, a total of 178,211 awards were exercised (2022 – 95,035). The weighted average share price

at the date of exercise during 2023 was 230.4 pence (2022 – 327.7 pence).

(ii) Time-based Awards

The Company also grants time-based share awards annually to senior employees under the HPSP,

which are subject to a three-year vesting period. Annual awards of shares may be made to employees

subject to continued employment during the vesting period. There are no performance conditions

attached.

Details of the time-based HPSP award movements during the year are set out below:

	2023	2022
	Number of	Number of
	shares	shares
Outstanding at the beginning of the year	5,382,246	3,794,815
Granted during the year	2,143,469	2,695,411
Vested and exercised during the year	(1,434,673)	(882,875)
Lapsed during the year	(392,624)	(225,105)
Outstanding at the end of the year	5,698,418	5,382,246

In 2023, a total of 1,434,673 awards were exercised (2022 – 882,875). The weighted average share

price at the date of exercise during 2023 was 251.1 pence (2022 – 324.6 pence).

Notes to the Consolidated Financial Statements continued

37. Share-based Payments continued

Hunting PLC Annual Report and Accounts 2023 218Strategic Report Corporate Governance Financial Statements Other Information

(b) 2014 Hunting Performance Share Plan (“HPSP”) continued

(ii) Time-based Awards continued

Details of the time-based HPSP awards outstanding at 31 December 2023 are as follows:

	2023	2022
	Number of	Number of	Normal
	shares	shares	vesting date	Expiry date
Date of grant:
1 May 2014 – options	–	1,568	1 May 2017	1 May 2024
28 April 2015 – options	–	3,932	28 April 2018	28 April 2025
11 March 2016 – options	1,411	39,942	11 March 2019	11 March 2026
3 March 2017 – options	1,859	11,737	3 March 2020	3 March 2027
19 April 2018 – options	4,341	33,718	19 April 2021	19 April 2028
21 March 2019 – options	13,384	57,599	21 March 2022	21 March 2029
3 March 2020 – options	68,328	216,863	3 March 2023	3 March 2030
3 March 2020 – awards	–	975,642	3 March 2023	–
4 March 2021 – options	219,433	289,650	4 March 2024	4 March 2031
4 March 2021 – awards	1,005,865	1,129,512	4 March 2024	–
4 March 2022 – options	363,760	458,869	4 March 2025	4 March 2032
4 March 2022 – awards	1,961,409	2,163,214	4 March 2025	–
6 March 2023 – options	356,321	–	6 March 2026	6 March 2033
6 March 2023 – awards	1,702,307	–	6 March 2026	–
Outstanding at the end
of the year	5,698,418	5,382,246
Exercisable at the end
of the year	89,323	148,496
Weighted average remaining
contractual life of options
outstanding at the end
of the year	8.14 years	7.98 years

Notes to the Consolidated Financial Statements continued

37. Share-based Payments continued

(iii) Fair Value of HPSP Awards

The fair value of awards granted under the HPSP is calculated using two separate models:

(1) The fair value of awards subject to a market-related performance condition, specically Company specifically Company

performance against the TSR of a bespoke peer group, has been calculated using the Stochastic

pricing model (also known as the “Monte Carlo” model).

The assumptions used in this model were as follows:

	2023	2022
Date of grant/valuation date	6 March 2023	4 March 2022
Weighted average share price at grant	277.0p	226.0p
Exercise price	nil	nil
Expected dividend yield	nil	nil
Expected volatility	54.8%	55.2%
Risk-free rate	3.84%	1.04%
Expected life	3 years	3 years
Weighted average fair value at grant	156.6p	167.1p

(2) The fair value of performance-based awards not subject to a market-related performance condition

include the EPS, ROCE, FCF and balanced strategic scorecard performance targets, and the

time-based HPSP awards, with the fair value being calculated using the Black-Scholes pricing model.

The assumptions used in this model were as follows:

	2023	2022
Date of grant/valuation date	6 March 2023	4 March 2022
Weighted average share price at grant	277.0p	226.0p
Exercise price	nil	nil
Expected dividend yield	nil	nil
Expected volatility	54.8%	55.2%
Risk-free rate	3.84%	1.04%
Expected life	3 years	3 years
Weighted average fair value at grant	277.0p	226.0p

Hunting PLC Annual Report and Accounts 2023 219Strategic Report Corporate Governance Financial Statements Other Information

(b) 2014 Hunting Performance Share Plan (“HPSP”) continued

(iii) Fair Value of HPSP Awards continued

The methods to calculate the assumptions for both models are:

• The expected volatility was calculated using historic weekly volatility, equal in length to the remaining

portion of the performance period at the date of grant.

• The expected life of the award has been calculated commensurate with the vesting period.

• The risk-free rate is based on the zero coupon UK government bond yield commensurate with the

vesting period prevailing at the date of grant.

• Participants are entitled to a dividend equivalent over the number of shares that make up their

award. It is accumulated over the vesting period and released subject to the achievement of the

performance conditions. This is factored into the fair value calculation and as a result the dividend

yield assumption is set to zero.

• The initial accounting charge of the performance-based HPSP awards granted under the HPSP

incorporates an estimate of the number of shares that are expected to lapse for those participants

who cease employment during the vesting period. The estimate of the expected forfeiture rate is 5%

per annum. The subsequent accounting charge includes an adjustment to the initial accounting

charge to allow for actual lapses rather than estimated lapses.

The amount charged to the consolidated income statement attributable to the performance-based

HPSP awards is $6.3m (2022 – $3.6m) and the charge to the consolidated income statement in

respect of time-based HPSP awards is $6.0m (2022 – $5.8m). These charges are recognised in

administrative expenses.

The Company also grants cash conditional awards annually to employees in certain overseas tax

jurisdictions. These awards are aligned with the rules of the HPSP and are subject to employees

continued employment during the vesting period. Awards are granted at nil cost and are settled at the

closing mid-market price of a Hunting PLC Ordinary share on the third anniversary of the date of grant.

Notes to the Consolidated Financial Statements continued

37. Share-based Payments continued

(i) Performance-based Awards

The performance-based cash conditional awards to senior employees are divided into four tranches of

differing proportions. Each tranche is subject to a three-year vesting period and Company performance

is measured against various performance measures as shown in the table below. The performance

period for the 2023 awards is 1 January 2023 to 31 December 2025.

The award weightings for the years 2021, 2022 and 2023 are in the table below.

	Award	Award	Award
	weighting	weighting	weighting
	2023	2022	2021
Performance measure	%	%	%
TSR of a bespoke comparator group	20	25	35
Adjusted diluted earnings per share (“EPS”)	20	20	25
Return on average capital employed (“ROCE”)	25	20	25
Free cash ow (ash flow (“FCF”)	20	20	–
Balanced strategic scorecard – non-nancial KPIsfinancial KPIs
comprising Quality and Safety performance	15	15	15

Details of the cash conditional performance-based award movements during the year are set out below:

	2023	2022
	Number of	Number of
	shares	shares
Outstanding at the beginning of the year	546,402	342,140
Granted during the year	158,991	204,262
Vested and exercise during the year	(12,392)	–
Lapsed during the year	(152,851)	–
Outstanding at the end of the year	540,150	546,402

Hunting PLC Annual Report and Accounts 2023 220Strategic Report Corporate Governance Financial Statements Other Information

(i) Performance-based Awards continued

Details of the cash conditional performance-based awards outstanding at 31 December 2023 are

as follows:

	2023	2022
	Number of	Number of	Normal
	shares	shares	vesting date
Date of grant:
3 March 2020	–	165,243	3 March 2023
4 March 2021	176,897	176,897	4 March 2024
4 March 2022	204,262	204,262	4 March 2025
6 March 2023	158,991	–	6 March 2026
Outstanding at the end of the year	540,150	546,402

The fair value of the cash conditional performance-based awards is calculated at the date of grant

using the same assumptions and model as the fair value of the performance-based awards not

subject to a market-related condition (see 37(b)(iii) above). The weighted average fair value of the award

at 31 December 2023 was 295.5 pence (2022 – 333.0 pence).

(ii) Time-based Awards

The Company also grants time-based cash conditional awards annually, which are subject to a

three-year vesting period. Annual cash awards may be made to employees subject to continued

employment during the vesting period. There are no performance conditions attached.

Details of the cash conditional time-based award movements during the year are set out below:

	2023	2022
	Number of	Number of
	shares	shares
Outstanding at the beginning of the year	532,437	247,106
Granted during the year	265,816	325,564
Vested and exercised during the year	(89,036)	(40,233)
Lapsed during the year	(2,395)	–
Outstanding at the end of the year	706,822	532,437

The weighted average share price at the date of exercise during 2023 was 282.0 pence

(2022 – 328.0 pence).

Details of the cash conditional time-based awards outstanding at 31 December 2023 are as follows:

	2023	2022
	Number of	Number of	Normal
	shares	shares	vesting date
Date of grant:
3 March 2020	–	89,036	3 March 2023
4 March 2021	117,837	117,837	4 March 2024
4 March 2022	325,564	325,564	4 March 2025
6 March 2023	263,421	–	6 March 2026
Outstanding at the end of the year	706,822	532,437

The fair value of the cash conditional awards is calculated at the date of grant using the same

assumptions and model as the fair value of performance-based awards not subject to a market-related

performance condition (see 37(b)(iii) above). The weighted average fair value of the award at

31 December 2023 was 295.5 pence (2022 – 333.0 pence).

(d) Amounts Included in the Accounts

The charge to the consolidated income statement attributable to the cash conditional share awards

is $1.2m (2022 – $0.5m) and the total charge attributable to the equity-settled awards is $12.3m

(2022 – $9.4m). The total charge to the consolidated income statement for the year for share-based

payments is $13.5m (2022 – $9.9m), see note 7. The total liability in relation to the cash-settled awards

included in accruals at the year-end is $1.8m (2022 – $0.9m), of which $nil (2022 – $nil) related to

awards that had vested.

Notes to the Consolidated Financial Statements continued

37. Share-based Payments continued

Hunting PLC Annual Report and Accounts 2023 221Strategic Report Corporate Governance Financial Statements Other Information

38. Related-party Transactions

The following related-party transactions took place between wholly-owned subsidiaries of the Group

and associates and joint ventures during the year:

	2023	2022
	$m	$m
Additional investment in Cumberland (note 16)	(1.6)	(1.6)
Investment in Indian joint venture arrangement with Jindal SAW (note 16)	–	(1.9)
Revenue from sales to joint ventures	0.6	0.3
Dividends received from Tianjin Huaxin (note 16)	0.6	–
Year-end balances:
Shareholder loan from non-controlling interest (note 25)	(3.9)	(3.9)

The outstanding balances at the year-end are unsecured and have no xed date for reo fixed date for repayment.

During the year, revenue of $9.2m (2022 – $12.3m) was generated from sales to BestLink Tube Pte.

Ltd., the minority interest holder in Hunting Energy Services (China) Pte. Ltd. Additionally, revenue of

$3.0m (2022 – $4.6m) was recognised from sales to Jindal SAW, the Indian joint venture partner.

All ownership interests in associates are in the equity shares of those companies. The ownership

interests in associates, joint ventures and subsidiaries are set out in notes C19 and C20 to the

Company nancialCompany financial statements.

The key management of the Group comprises the Hunting PLC Board and members of the Executive

Committee. Details of their compensation are disclosed in note 7. The Hunting PLC Directors and the

members of the Executive Committee had no material transactions other than as a result of their

service agreements.

Hunting PLC is the parent company of the Hunting PLC Group. The Company is listed on the London

Stock Exchange, with none of the shareholders owning more than 20% of the issued share capital of

the Company (see page 162). Accordingly, the Directors do not consider there to be an ultimate

controlling party.

39. Events After the Balance Sheet Date

There are no events after the balance sheet date to disclose.

40. Principal Accounting Policies

The Group’s principal accounting policies are described below:

(a) Consolidation

• The Group nancial st Group financial statements include the results of the Company and its subsidiaries, together

with its share of associates and joint ventures.

• Subsidiaries are consolidated from the date on which control is transferred to the Group and are

de-consolidated from the date control ceases.

• The Group uses the acquisition method of accounting for business combinations. Consequently,

the consideration is determined as the fair value of the net assets transferred to the vendor and

includes an estimate of any contingent consideration. The net assets acquired are also measured

at their respective fair values for initial recognition purposes on the acquisition date.

• Acquisition-related costs arising on business combinations are expensed to the consolidated

income statement as incurred.

(b) Revenue

(i) Revenue from Contracts with Customers

• Revenue is recognised as performance obligations are satised when contrisfied when control of promised goods

or services is transferred to the customer and is measured at the amount that reects thflects the

consideration to which the Group expects to be entitled in exchange for those goods or services.

• For each performance obligation within a contract, the Group determines whether it recognises

revenue:

1. Wholly at a single point in time when the Group has completed its performance obligation; or

2. Piecemeal over time during the period that control incrementally transfers to the customer while

the good is being manufactured or the service is being performed.

• Hunting’s activities that require revenue recognition over time comprise:

1. The supply of goods that are specicallfically designed for, and restricted to, the use of a particular

customer, and for which Hunting has an enforceable right to payment for the work completed to

date, for example, the design and manufacture of bespoke products such as titanium stress joints;

2. The provision of services in which Hunting creates or enhances an asset that the customer

controls as the asset is created or enhanced, such as the lathing of a thread onto the ends of

customer-owned plain-end pipe and assembling or welding components that are owned by the

customer; and

3. The provision of services in which the customer obtains the benet whnefit while the service is being

performed, such as the storage and management services of customer-owned products.

Notes to the Consolidated Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 222Strategic Report Corporate Governance Financial Statements Other Information

(b) Revenue continued

(i) Revenue from Contracts with Customers continued

• In respect of revenue that is recognised over time, Hunting uses an input method for measuring the

progress towards completion of its performance obligations and consequently for measuring the

amount of revenue that is recognised. Speciecifically, revenue is recognised in proportion to the total

expected consideration that mirrors the costs incurred to date relative to the total expected costs to

complete the performance obligation. This method is considered to be the most appropriate as the

inclusion of all costs, being materials, labour and direct overheads, best reects, best reflects the activities

required in performing the promise to the customer.

• Hunting’s activities that require revenue recognition at a point in time comprise:

1. The sale of goods that are not specically designed for specifically designed for use by one particular customer. These

products include tubulars acquired by Hunting as plain-end pipe on which lathing work has been

applied and which are resold as threaded pipe; and

2. The manufacture of goods that are specically designed ft are specifically designed for one particular customer but for which

Hunting does not have an enforceable right to payment for the work completed to date.

• The events that trigger the recognition of revenue at a point in time are most commonly: (i) delivery

of the product in accordance with the contractual terms; or (ii) when the product is made available

to the customer for collection; or (iii) when the customer noties thetifies the Group that they have accepted

the product following a period of inspection. Hunting utilises the customer acceptance approach

when the contract with the customer contains a requirement for formal acceptance to be provided,

that typically is required to be received before the customer is obliged to pay for the products.

• When revenue from a customer is recognised, the amount is reported on the balance sheet as a

contract asset if the performance obligation is incomplete as this asset reects thaeflects that it is conditional

upon Hunting completing the work. The revenue is reported on the balance sheet as accrued

income if the performance obligation has been completed but a sales invoice has not yet been

issued. The revenue is recognised on the balance sheet as a trade receivable if a sales invoice has

been issued as this asset reect reflects that it is unconditional other than the passage of time. The Group

recognises a contract liability on the balance sheet when amounts received and receivable from the

customer exceed the value of the work done to date, reecone to date, reflecting that the Group is obligated to

transfer goods or services in order to settle the prepayment from the customer.

(ii) Rental Revenue

• Rental revenue from operating leases, being leases in which Hunting does not transfer substantially

all of the risks and rewards of the leased asset to the customer, is recognised as the income is earned.

• Revenue from narom finance leases, being leases in which Hunting, as a manufacturer/dealer-lessor,

transfers substantially all of the risks and rewards of the leased asset to the customer, is measured

as the fair value of the underlying asset or if lower the present value of the lease payments. The

carrying value of the leased asset minus the unguaranteed residual value is charged to cost of sales

and interest earned during the term of the lease is recognised as nsed as finance income.

• Interest income and expense is recognised in the consolidated income statement using the effective

interest method.

(d) Foreign Currencies

(i) Individual Subsidiaries’, Associates’ and Joint Ventures’ Financial Statements

• The nancial stat financial statements for each of the Group’s subsidiaries, associates and joint ventures are

denominated in their functional currency.

• The functional currency is the currency of the primary economic environment in which the entity

operates.

• Transactions denominated in currencies other than the functional currency are translated into the

functional currency at the exchange rate ruling at the date of the transaction.

• Monetary assets and liabilities, except borrowings designated as a hedging instrument in a net

investment hedge, denominated in non-functional currencies are retranslated at the exchange rate

ruling at the balance sheet date and exchange differences are taken to the consolidated income

statement.

• Borrowings designated as a hedging instrument in a net investment hedge are retranslated at the

exchange rate ruling at the balance sheet date and exchange differences are taken directly to equity.

(ii) Group Consolidated Financial Statements

• The presentation currency of the Group is US Dollars.

• The net assets of non-US Dollar denominated subsidiaries, associates and joint ventures are

translated into US Dollars at the exchange rates ruling at the balance sheet date.

• The income statements of subsidiaries, associates and joint ventures are translated into US Dollars

at the average exchange rates for the year.

• Exchange differences are recognised directly in equity in the currency translation reserve (“CTR”),

together with exchange differences arising on foreign currency loans used to nance foro finance foreign

currency net investments.

• Upon adoption of IFRS on 1 January 2004, accumulated exchange differences arising on

consolidation prior to 31 December 2003 were reset to zero and the CTR recommenced under

IFRS on 1 January 2004.

• The balance on the CTR represents the exchange differences arising on the retranslation of non-US

Dollar amounts into US Dollars since 1 January 2004.

• On the disposal of a business, the cumulative exchange differences previously recognised in the

CTR relating to that business are transferred to the consolidated income statement as part of the

gain or loss on disposal.

Notes to the Consolidated Financial Statements continued

40. Principal Accounting Policies continued

Hunting PLC Annual Report and Accounts 2023 223Strategic Report Corporate Governance Financial Statements Other Information

(e) Taxation

• The taxation recognised in the consolidated income statement comprises current tax and deferred

tax arising on the current year’s result before tax and adjustments to tax arising on prior years’ results.

• Current tax is the expected tax payable or receivable arising in the current year on the current year’s

result before tax, using tax rates enacted or substantively enacted at the balance sheet date, plus

adjustments to tax in respect of prior years’ results.

• Deferred tax is the tax that is expected to arise when the assets and liabilities recognised in the

Group’s consolidated balance sheet are realised, using tax rates enacted or substantively enacted at

the balance sheet date that are expected to apply when the asset is realised or the liability is settled.

• Full provision is made for deferred taxation, using the liability method, on all taxable temporary

differences. Deferred tax assets and liabilities are recognised separately in the consolidated balance

sheet and are reported as non-current assets and liabilities.

• Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred

tax assets are recognised to the extent that it is probable that taxable proble profits will be available against

which deductible temporary differences can be utilised. Such assets and liabilities are not

recognised if the temporary difference arises from the initial recognition (other than in a business

combination) of other assets and liabilities in a transaction that affects neither the taxable prot nor taxable profit nor

the accounting prot ang profit and at the time of transaction dos not give rise to equal amounts of taxable

and deductible temporary differences. In addition, a deferred tax liability is not recognised if the

temporary difference arises from the initial recognition of goodwill.

• Deferred tax liabilities are recognised for taxable temporary differences arising on investments in

subsidiaries and associates, except where the Group is able to control the reversal of the temporary

difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with such investments

are only recognised to the extent that it is probable that there will be sufcieficient taxable prots agarofits against

which to utilise the benets of the tenefits of the temporary differences and they are expected to reverse in the

foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date

and reduced to the extent that it is no longer probable that sufcieficient taxable prots wilrofits will be available

to allow all or part of the asset to be recovered.

• When items of income and expense are recognised in other comprehensive income, the current

and deferred tax relating to those items is also recognised in other comprehensive income.

(f) Property, Plant and Equipment

• Property, plant and equipment is stated at cost less accumulated depreciation and any impairment

losses. Cost includes expenditure that is directly attributable to the acquisition and installation of

the asset.

• Land and assets under construction are not depreciated.

• With the exception of oil and gas exploration and development, assets are depreciated using the

straight-line method at the following rates:

Freehold buildings – 2% to 10%

Leasehold buildings – life of lease

Plant, machinery and motor vehicles – 6% to 331⁄

3

Rental tools – 3% to 25%

• The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end

of each reporting period.

(g) Leases

• Lessees:

With regard to lessee contracts, the Group recognises a lease obligation as a liability and a

right-of-use asset at the inception of the contract, except with regard to the two exemptions noted

below. In measuring the lease obligation, the Group takes account of all xent of all fixed payments and the

known amount of variable payments. Management also assesses the likelihood of the Group

exercising extension options, early termination options and purchase options when contractually

offered, and incorporates the relevant assumed cash ows iash flows in the initial measurement. These future

gross cash ows are theh flows are then discounted using the incremental borrowing rate (“IBR”) that is relevant to

each lease. The interest rate implicit in the lease is not used as the Group is unable to access the

specic cific financials of the lessor that would be required in order to determine that rate. The IBR is

determined by reference to: (i) the weighted average period of the lease term; (ii) the risk-free rate of

the currency of the lease, adjusted for country-specic go-specific government bond yields for contracts

denominated in the Euro; (iii) the market risk premium associated with the currency of denomination

of the contract; and (iv) a nd (iv) a financing spread associated with the nath the financial status and country of

location of the lessee entity; (v) an asset-specic adjific adjustment associated with the perceived security

that each type of asset provides to the lessor. The right-of-use asset is usually initially measured as

equal to the initial measurement of the lease liability plus any contracted remediation work that

would be required at the end of the lease term as there are usually no initial direct costs or lease

payments made prior to the inception of the contract.

Notes to the Consolidated Financial Statements continued

40. Principal Accounting Policies continued

Hunting PLC Annual Report and Accounts 2023 224Strategic Report Corporate Governance Financial Statements Other Information

(g) Leases continued

• Lessees: continued

Whenever circumstances change post-inception, for example when the judged likelihood of

whether an option will or will not be exercised, or indices relevant to the measurement of variable

payments change, or the lease term is extended with regard to a contract that does not offer an

extension option, the lease obligation is remeasured and the right-of-use asset is correspondingly

amended. Remeasurement of the lease obligation is typically based on a revised IBR as the

change in circumstances has most commonly resulted from a change in the lease term.

The cost of the lease is subsequently recognised in the consolidated income statement as interest

charged on the liability and as depreciation charged on the right-of-use asset. Depreciation is

charged on a straight-line basis over the lease term; to date the Group has not and is not expected

to exercise a purchase option which would otherwise shorten the depreciation period.

Hunting has adopted the two exemptions that permit lessees to charge the cost of certain leases

directly to the consolidated income statement on a straight-line basis over the lease term. The two

exemptions apply to:

– leases that have a duration of one year or less; and

– leases of assets that would have cost $5,000 or less, when new, to acquire if the asset had been

purchased rather than leased.

• Lessors:

Hunting leases equipment to customers in the capacity of a manufacturer/dealer lessor.

Consequently, the leased asset is derecognised and a nancd a finance lease receivable is recognised on

the balance sheet in respect of the future amounts payable by the customer.

(h) Goodwill

• Goodwill arises when the fair value of the consideration paid for a business exceeds the fair value

of the Group’s share of the net assets acquired.

• Goodwill is recognised as an asset and is carried at cost less accumulated impairment losses.

• Goodwill is allocated to cash generating units (“CGUs”) for the purpose of impairment testing. The

allocation is made to the CGUs or groups of CGUs that are expected to benet fnefit from the business

combination in which the goodwill arose.

• On the disposal of a business, goodwill relating to that business that remains in the consolidated

balance sheet at the date of disposal is included in the determination of the prot or le profit or loss on disposal.

(i) Other Intangible Assets

• Other intangible assets, whether obtained through acquisition or internal development, are

capitalised when it is probable that the future economic benets that benefits that are attributable to the asset

will be generated, provided the cost of the asset can be measured reliably.

• Capitalisation occurs from the point when technical and commercial feasibility of the asset has been

established. Prior to this costs are expensed.

• For internally generated assets, only costs directly attributable to the development of the asset are

capitalised. This typically includes employee remuneration and the cost of materials and services,

such as testing, consumed in generating the intangible asset.

• Other intangible assets are stated at cost less accumulated amortisation and any impairment losses.

• These assets have a nite lifave a finite life and are amortised in accordance with the pattern of expected future

economic benetseconomic benefits, or when this cannot be reliably estimated, by using the straight-line method.

• Intangible assets are amortised over the following periods:

Customer relationships – eight to ten years

Unpatented technology – eight to ten years

Patents – eight to ten years

Trademarks and domain names – one to ve yearne to five years

Software – three to eight years

(j) Investments in Associates and Joint Ventures

• An associate is an entity over which the Group has signicant ificant inuennfluence but not control or joint

control. A joint venture is a joint arrangement whereby the parties that have joint control have rights

to the net assets of the arrangement.

• The Group’s interests in these investments are accounted for using the equity method of accounting.

• Upon initial recognition as at the date of acquisition, the interests are recognised in the balance

sheet at cost plus directly incurred acquisition-related expenses. The excess of cost above the

share of net assets is ascribed to goodwill and other intangible assets, as appropriate. The

intangible assets are subsequently amortised and presented in the consolidated income statement

as part of the post-tax share of the acquiree’s results.

• Subsequently, the carrying amount of the investment is adjusted to include the Group’s share of the

net assets after the date of acquisition and is assessed for impairment as a single asset at each

balance sheet date. The Group recognises its share of the acquiree’s net prot or let profit or loss after taxation

as a separate line in the consolidated income statement. The Group’s share of the acquiree’s net

assets plus direct acquisition expenses, goodwill and other acquisition-related intangible assets is

presented in the consolidated balance sheet as investments in associates and joint ventures.

Notes to the Consolidated Financial Statements continued

40. Principal Accounting Policies continued

Hunting PLC Annual Report and Accounts 2023 225Strategic Report Corporate Governance Financial Statements Other Information

(k) Impairments

• The Group assesses at least annually whether there is any indication that an asset is impaired,

and undertakes an assessment for an impairment if such an indication exists.

• In addition, the Group undertakes an annual impairment assessment of goodwill, whether or not

an indication of impairment actually exists.

• Where assets do not generate their own independent cash ows, they ash flows, they are tested at a CGU level

and, if impairment is identied, the ctified, the carrying amount of the CGU is reduced to its recoverable

amount. For assets that generate independent cash owash flows, the specic ascific asset is impaired to its

recoverable amount if an impairment is identied. identified.

• Where an impairment exists, an asset or CGU is written down to its recoverable amount being the

higher of: (a) its fair value less costs to sell; and (b) its value-in-use. Details of how value-in-use is

determined are given in note 15.

• Impairments are recognised immediately in the consolidated income statement.

• An impairment of goodwill is never reversed. When applicable, an impairment of any other asset or

CGU is reversed, but only to the extent that the consequent carrying value does not exceed what

would have been the carrying value had the impairment not originally been made.

(l) Inventories

• Inventories are stated at the lower of cost and net realisable value.

• Cost is determined using the rst-in-rst-oue first-in-first-out method and net realisable value is the estimated selling

price less costs of disposal in the ordinary course of business. The cost of inventories includes

direct costs plus production overheads.

(m) Cash and Cash Equivalents

• Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with a

maturity of less than three months from the date of deposit.

• Short-term deposits have been classiesified as cash and cash equivalents as they are short-term,

highly liquid, are readily convertible to a known amount of cash and are subject to an insignicgnificant

risk of change in value. These instruments are held for the purpose of settling current or potential

cash commitments in the short term by the treasury function.

• For cash r cash flow statement purposes, cash and cash equivalents include bank overdrafts. In the

consolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.

(n) Financial Assets

• At initial recognition, the Group measures a nans a financial asset at its fair value plus, in the case of a

nafinancial asset not at fair value through prot ogh profit or loss (“FVTPL”), transaction costs. Transaction costs

of naof financial assets at FVTPL are expensed immediately to the consolidated income statement.

• Subsequent measurement of debt instruments depends on each Group entity’s business model for

managing the asset in order to generate cash ows aash flows and the cash ow chash flow characteristics of the nas of the financial

asset. The Group’s debt instruments are classiesified either into amortised cost or FVTPL.

• Debt instruments that are held for the collection of contractual cash ows, wash flows, where those cash owsh flows

represent solely payments of principal and interest, are subsequently measured at amortised cost.

Interest income from these m these financial assets is included in nand in finance income using the effective interest

method. If collection is expected in one year or less they are classied as currente classified as current assets, otherwise

they are presented as non-current assets. Debt instruments held for collection of contractual cash

ows inflows include contract assets, trade receivables, accrued revenue and other receivables.

• Any other debt instruments, including the convertible nane financing, which are subsequently not

measured at amortised cost have been measured at FVTPL.

• The Group’s nancial assets ts financial assets that are equity instruments, or debt instruments that are convertible

into equity, are subsequently measured at FVTPL. Changes in the fair value of these instruments are

recognised in other operating income, operating expenses, naes, finance income or come or finance expense, as

appropriate. Financial assets that are equity instruments comprise listed equity investments and

mutual funds. The convertible debt instrument is currently a loan on which interest is earned prior to

its potential conversion into equity, the conversion of which is dependent upon events outside of the

Group’s control.

• The Group applies lifetime expected credit losses (“ECLs”) to trade receivables, accrued revenue,

contract assets and lease receivables, both short term and long term, upon their initial recognition.

• The Group derecognises a ises a financial asset only when the contractual rights to the cash ows fsh flows from

the asset expire, or when it transfers the nane financial asset and substantially all the risks and rewards of

ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the

risks and rewards of ownership and continues to control the transferred asset, the Group recognises

its retained interest in the asset and an associated liability for amounts it may have to pay. If the

Group retains substantially all the risks and rewards of ownership of a transferred nared financial asset,

the Group continues to recognise the nase the financial asset and also recognises a collateralised borrowing

for the proceeds received.

(o) Financial Liabilities

• Financial liabilities are initially recognised at fair value at the trade date, which is normally the

consideration received less, in the case of nanse of financiallcial liabilities that are not measured at FVTPL,

transaction costs. The Group subsequently remeasures all of its non-derivative nancial liabilite financial liabilities,

including trade payables, at amortised cost.

• Payables are classied as current classified as current liabilities if payment is due within one year, otherwise they are

presented as non-current liabilities.

Notes to the Consolidated Financial Statements continued

40. Principal Accounting Policies continued

Hunting PLC Annual Report and Accounts 2023 226Strategic Report Corporate Governance Financial Statements Other Information

(p) Debt Issue Costs

• Transaction costs in relation to the arrangement of the ABL facility are capitalised and subsequently

amortised on a straight-line basis over the expected useful life of the facility. The charge is recognised

within nahin finance expense in the income statement. Capitalised costs are presented in the balance

sheet as a reduction to any drawn down debt with any excess over the drawn amount presented

as a prepayment for services.

(q) Derivatives and Hedging

• Derivatives are initially recognised at fair value on the date the derivative contract is entered into

and are subsequently remeasured to their fair value at the end of each reporting period.

• The full fair value of a derivative is classiesified as a non-current asset or liability when the remaining

maturity of the derivative is more than 12m2 months from the balance sheet date.

• The accounting for subsequent changes in fair value depends on whether the derivative is

designated as a hedging instrument, and if so, the nature of the item being hedged.

• Where the derivatives are not designated in a hedge and accounted for using hedge accounting,

they are classiesified as “held for trading” and are accounted for at fair value through prot or lorofit or loss,

with changes in the fair value recognised immediately within the consolidated income statement.

• The Group designates certain derivatives as:

i. hedges of the fair value of recognised assets and liabilities; or

ii. hedges of a particular risk associated with the cash ows of higsh flows of highly probable forecast transactions; or

iii. a hedge of the net investment in a foreign operation.

• The Group has not disclosed the accounting polices relating to fair value hedges and cash owash flow

hedges as the amounts are immaterial to the nancial st the financial statements.

(r) Provisions

• Provisions are recognised when the Group has a present obligation as a result of a past event and

it is probable that an outow of rutflow of resources will be required to settle the obligation.

• The measurement of a provision is based on the most likely amount and timing of the expenditures.

Payments that are expected to arise after more than one year are discounted to their present value

using a risk-free interest rate that is relevant to the region in which the past event occurred. The

risk-free interest rate is based on the redemption yields of government securities.

(s) Post-employment Benets-employment Benefits

• Payments to dened cofined contribution retirement schemes are charged to the consolidated income

statement when they fall due.

(t) Share-based Payments

• The Group issues equity-settled and cash-settled share-based payments (HPSP awards) to

certain employees as consideration for services received from the employees. The fair value of

the employees’ services is recognised as an expense in the consolidated income statement on

a straight-line basis over the vesting period based on the Group’s estimate of awards that will

ultimately vest. The obligation to settle these awards is recognised within other components of

equity; the obligation to settle the cash-settled awards is recognised as a liability.

(u) Share Capital

• Incremental costs directly attributable to the issue of new shares are charged to equity as a deduction

from the proceeds, net of tax.

(v) Merger Reserve

• The merger reserve comprises the proceeds received, net of transaction costs, in excess of the

nominal value of the Ordinary shares issued by way of the share placing completed on 31 October

2016. In accordance with section 612 of the Companies Act 2006, the premium was credited to the

merger reserve, instead of to the share premium account, because the share placing was pursuant

to the Company securing over 90% of another entity. The proceeds were used to pay down the

Group’s borrowings at that time. The reserve is non-distributable and is transferred to distributable

retained earnings when the proceeds meet the denition offinition of a qualifying consideration.

(w) Dividends

• Dividends to the Group’s shareholders are recognised as liabilities in the Group’s nancial stas financial statements

in the period in which the dividends are approved by shareholders. Interim dividends are recognised

when paid. All dividends are dealt with in the statement of changes in equity.

(x) Employee Benet Benefit Trust

• The Hunting PLC Employee Benet Tfit Trust (“EBT”) holds treasury shares, which are shares in Hunting

PLC, for the purpose of issuing shares to employees of the Group under share-based remuneration

schemes. The EBT is consolidated in accordance with note 40(a) above.

• The cost of treasury shares is presented as a deduction from retained earnings in the consolidated

balance sheet.

• The cost of shares issued to employees is recognised on a weighted average cost basis.

Notes to the Consolidated Financial Statements continued

40. Principal Accounting Policies continued

Hunting PLC Annual Report and Accounts 2023 227Strategic Report Corporate Governance Financial Statements Other Information

Notes

2023

2022

ASSETS

Non-current assets

Investments in subsidiaries C4 205.3 205.3

Other receivables C5 599.7 582.3

805.0 787.6

Current assets

Other receivables C5 1.4 2.4

Current tax asset 0.5 –

1.9 2.4

LIABILITIES

Current liabilities

Other payables C6 2.7 1.5

Provisions 0.2 0.2

2.9 1.7

Net current (liabilities)/assets (1.0) 0.7

Non-current liabilities

Provisions 0.7 0.7

Net assets 803.3 787.6

Equity attributable to owners of the parent

Share capital C13 66.5 66.5

Share premium C13 153.0 153.0

Other components of equity C14 1.5 9.3

Retained earnings C15 582.3 558.8

Total equity 803.3 787.6

The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting its own income statement and statement of comprehensive income. Prot and total

comprehensive income for the year of $27.5m (2022 – $9.5m) has been accounted for in the nancial statements of the Company.

The notes on pages 231 to 237 are an integral part of these nancial statements. The nancial statements on pages 228 to 237 were approved by the Board of Directors on 29 February 2024 and were signed

on its behalf by:

Jim Johnson Bruce Ferguson

Director Director Registered number: 00974568

Company Balance Sheet

At 31 December 2023

Hunting PLC Annual Report and Accounts 2023 228Strategic Report Corporate Governance Financial Statements Other Information

Notes

Year ended 31 December 2023

capital

premium

Other

components

of equity

Retained

earnings

Total

equity

At 1 January 2023 66.5 153.0 9.3 558.8 787.6

Prot for the year and total comprehensive income – – – 27.5 27.5

Dividends paid to Hunting PLC shareholders C16 – – – (15.0) (15.0)

Treasury shares:

– purchase of treasury shares C15 – – – (9.0) (9.0)

– disposal of treasury shares C15 – – – 0.3 0.3

Share options and awards:

– value of employee services C14 – – 12.3 – 12.3

– discharge C14, C15 – – (8.3) 7.9 (0.4)

Transfer between reserves – – (11.8) 11.8 –

At 31 December 2023 66.5 153.0 1.5 582.3 803.3

Notes

Year ended 31 December 2022

capital

premium

Other

components

of equity

Retained

earnings

Total

equity

At 1 January 2022 66.5 153.0 22.6 548.1 790.2

Prot for the year and total comprehensive income – – – 9.5 9.5

Dividends paid to Hunting PLC shareholders C16 – – – (13.6) (13.6)

Treasury shares:

– purchase of treasury shares C15 – – – (7.9) (7.9)

– disposal of treasury shares C15 – – – 0.2 0.2

Share options and awards:

– value of employee services C14 – – 9.4 – 9.4

– discharge C14, C15 – – (9.1) 8.9 (0.2)

Transfer between reserves – – (13.6) 13.6 –

At 31 December 2022 66.5 153.0 9.3 558.8 787.6

i. An analysis of other components of equity is provided in note C14.

Company Statement of Changes in Equity

For the year ended 31 December 2023

Hunting PLC Annual Report and Accounts 2023 229Strategic Report Corporate Governance Financial Statements Other Information

Notes

2023

2022

Operating activities

Operating loss

(2.7) (2.7)

Impairment of subsidiaries C4 – 126.0

Share-based payment receivables 12.3 9.4

Decrease/(increase) in receivables 1.0 (0.3)

Increase/(decrease) in payables 1.0 (0.1)

Net exchange differences (0.2) (0.3)

Taxation paid (9.1) (1.8)

Net cash inow from operating activities 2.3 130.2

Investing activities

Interest received 40.0 15.9

Loan issued (18.2) (121.3)

Net cash inow/(outow) from investing activities 21.8 (105.4)

Financing activities

Interest and bank fees paid (0.4) (3.5)

Dividends paid to Hunting PLC shareholders C16 (15.0) (13.6)

Purchase of treasury shares (9.0) (7.9)

Proceeds on disposal of treasury shares 0.3 0.2

Net cash outow from nancing activities (24.1) (24.8)

Net cash increase/(decrease) in cash and cash equivalents – –

Cash and cash equivalents at the beginning of the year – –

Cash and cash equivalents at the end of the year – –

i. The operating loss line item is loss before nance income, nance expense and tax. Within operating loss is dividend income of $nil (2022 – $126.2m). Please refer to note C18 for further details.

Hunting Knightsbridge Holdings Limited, a wholly owned subsidiary of Hunting PLC, acting on behalf of Hunting PLC and other group companies was authorised to settle various liabilities against the relevant

intercompany account. The Company has disclosed the underlying cash ows as operating, investing or nancing according to their nature on the basis that, as the principal, Hunting PLC has the right to the

cash inows and/or the obligation to settle liabilities to ensure that the cash costs of the Company have been correctly disclosed.

Company Statement of Cash Flows

For the year ended 31 December 2023

Hunting PLC Annual Report and Accounts 2023 230Strategic Report Corporate Governance Financial Statements Other Information

C1. Basis of Preparation

Hunting PLC is a premium-listed public company limited by shares, with its Ordinary shares listed

on the London Stock Exchange. Hunting PLC was incorporated in the United Kingdom under the

Companies Act and is registered in England and Wales. The address of the Company’s registered

ofce is 30 Panton Street, London, SW1Y 4AJ. The Company acts as a holding company for the

Hunting PLC Group. Details of the Company’s associates and joint ventures are given in note C19

and details of subsidiaries are given in note C20.

The nancial statements of Hunting PLC have been prepared in accordance with United Kingdom

adopted international accounting standards and in conformity with the requirements of the Companies

Act 2006. The nancial statements have been prepared on a going concern basis under the historical

cost convention. The Board’s consideration of going concern is detailed further in the Strategic Report

on page 107. The nancial statements are presented in US Dollars, the currency of the primary

economic environment in which the Company operates.

From the perspective of the Company, the principal risks and uncertainties are integrated with the

principal risks of the Hunting PLC Group and are not managed separately. The principal risks and

uncertainties of the Hunting PLC Group, which include those of the Company, are discussed on pages

98 to 105 in the Risk Management section of the Annual Report and further detail on nancial risks is

provided within note C9.

The Company’s principal accounting policies applied in the preparation of these nancial statements

are the same as those set out in note 40 of the Group’s nancial statements, except for investments

in subsidiaries that are stated at cost, which is the fair value of the consideration paid, less provision

for impairment. These policies have been consistently applied to all the years presented.

Critical Accounting Estimates and Judgements

Critical judgements are those that the Directors have made in the process of applying the Company’s

accounting policies and have the most signicant effect on the amounts recognised in the Company’s

nancial statements. Key assumptions are those assumptions concerning future expectations, together

with other key sources of estimation uncertainty at the end of the reporting period, that may have a

signicant risk of causing a material adjustment to the carrying amounts of assets and liabilities within

the next nancial year.

Estimates are continually evaluated, based on experience and reasonable expectations of future

events. Accounting estimates were made regarding future cash ows for the purposes of impairment

testing relating to the carrying value of investments in subsidiaries. The estimated future gross cash

ows utilise independent market forecasts adjusted to reect the Directors’ view of each subsidiary’s

future trading prospects, can include known growth projects, and are discounted at a rate that is

determined for each business unit in isolation by consideration of their business risk proles. Further

details of the impairment review are disclosed in note C4.

Other than estimates regarding future cash ows for the purposes of impairment testing for the

Company’s investments in subsidiaries (see note C4), management believes that there are no other

critical judgements or estimates applied in the preparation of the Company’s nancial statements.

Notes to the Company Financial Statements

C2. Employees

The Company had no employees during the current or prior year.

C3. Auditor’s Remuneration

2023

2022

Fees payable to the Company’s independent auditor

and its associates are for:

The audit of these nancial statements (0.5) (0.5)

C4. Investments in Subsidiaries

2023

2022

Cost:

At 1 January and 31 December 436.8 436.8

Impairment:

At 1 January (231.5) (105.5)

Impairment charge for the year – (126.0)

At 31 December (231.5) (231.5)

Net book amount 205.3 205.3

The Company’s subsidiaries are detailed in note C20. Investments in subsidiaries are recorded at cost,

which is the fair value of the consideration paid, less impairment.

(a) Impairment Tests

In respect of the carrying value of the Company’s investments in subsidiaries, assessments are

undertaken at least annually to determine whether there have been any events or changes in

circumstances that indicate that the carrying value may be impaired. An impairment review is carried

out when such indicators are present by comparing the carrying value of a subsidiary to its

recoverable amount. The recoverable amount for the investments are determined using a value-in-use

method which uses discounted cash ow projections.

For the investment in Hunting Energy Holdings Limited, the Company has utilised the recoverable

amounts determined by the Group impairment review. The Group impairment testing process and the

key assumptions are outlined on page 193. In the opinion of the Directors, following the impairment

review, the recoverable amount of the investment held in Hunting Energy Holdings Limited is in excess

of the carry value and, as a result, no impairment charge has been recognised in 2023. There was no

impairment charge in 2022.

Hunting PLC Annual Report and Accounts 2023 231Strategic Report Corporate Governance Financial Statements Other Information

(a) Impairment Tests continued

At 31 December 2023, the value of the investment held in Hunting Oil Holdings Limited was $nil. In

2022, following the receipt of a $126.2m dividend, the carrying value of the investment was compared

to the net asset value of the investment and the decit of $126.0m was recognised as an impairment

charge in the income statement.

(b) Sensitivities

Management has reviewed various downside sensitivities versus the base case assumptions used in

the projections. These covered revenue growth rates, terminal revenue growth rates, discount rates

and foreign exchange rates. Management has concluded that there are no reasonably foreseeable

changes in key assumptions that would give rise to an impairment charge.

C5. Other Receivables

2023

2022

Non-current:

Loans receivable from a subsidiary – interest-bearing 599.6 581.2

Prepayments 0.1 1.1

599.7 582.3

Current:

Receivables from subsidiaries 0.1 1.1

Prepayments 1.2 1.3

Other receivables 0.1 –

1.4 2.4

Receivables from subsidiaries’ current accounts are unsecured, interest free and repayable on

demand. The Company does not hold any collateral as security and no assets have been acquired

through the exercise of any collateral previously held.

(a) Impairment of Receivables

Default on a nancial asset is usually considered to have occurred when any contractual payments

under the terms of the debt are more than 90 days overdue. Receivables are written off when there

is no reasonable expectation of recovery. Indicators that receivables are generally not recoverable

include: the failure of the debtor to engage in a repayment plan, failure to make contractual payments

for a period greater than 180 days past due and the debtor being placed in administration. Where

receivables have been written off, the entity will continue to try to recover the outstanding receivable.

(b) Impairment of Loan Receivable

The Company assesses on a forward-looking basis the expected credit losses (“ECLs”) at each

balance sheet date associated with its loan receivable from a subsidiary company carried at

amortised cost. The impairment methodology applied, following the adoption of the general model

under IFRS 9, will depend upon whether there has been a signicant increase in credit risk.

To assess whether there has been a signicant increase in credit risk, the risk of default occurring as

at 31 December 2023 is compared with the risk of default occurring at the date of initial recognition.

Indications of a signicant increase in credit risk include events that have a negative impact on the

estimated future cash ows and if any payments under the terms of the debt are more than 30 days

overdue. Macro-economic information is also considered.

At 31 December 2023, the Company’s loan receivable was not overdue and the Company does

not consider it necessary to provide for any impairment. The loan receivable is expected to be fully

recovered, as there is no recent history of default or any indications that the contractual payments

will not be made (see note C9(c)). The Company’s maximum exposure to credit risk is the fair value

of the loan receivable, as described in note C8.

None of the Company’s receivables from subsidiaries and other receivables (2022 – none) were

overdue at the year-end and the Company does not consider it necessary to provide for any

impairments as there is no recent history of default or any indications that the contractual payments

will not be made. The Company’s maximum exposure to credit risk is the fair value of each class of

receivable, as described in note C8.

C6. Other Payables

2023

2022

Current:

Payables to subsidiaries 1.3 0.2

Accruals 1.1 1.0

Other payables 0.3 0.3

2.7 1.5

Current payables due to subsidiaries are unsecured, interest free and repayable on demand.

C7. Derivatives and Hedging

The Company has used forward foreign exchange contracts to hedge its exposure to exchange rate

movements during the year. At 31 December 2023, the Company had no outstanding forward foreign

exchange contracts (2022 – none). Gains and losses on contracts that are not designated in a hedge

relationship are taken directly to the income statement. Changes in the fair value of currency

derivatives not designated in a hedge relationship amounting to a $0.1m net loss (2022 – $0.1m gain)

were recognised in the income statement during the year.

Notes to the Company Financial Statements continued

C4. Investments in Subsidiaries continued

Hunting PLC Annual Report and Accounts 2023 232Strategic Report Corporate Governance Financial Statements Other Information

C8. Financial Instruments

(a) Financial Instruments at Amortised Cost

The loan receivable from a subsidiary and current receivables from subsidiaries of $599.7m (2022 –

$582.3m) are nancial assets measured at amortised cost. The interest-bearing loans receivable from

a subsidiary are unsecured and interest is charged based on a margin over bank lending rates. During

the year, the Company received interest of $40.2m (2022 – $16.0m) on the interest-bearing loan.

Payables to subsidiaries, accruals and other payables of $2.7m (2022 – $1.5m) are nancial liabilities

carried at amortised cost.

Net foreign exchange gains of $nil (2022 – $nil) were recognised in prot or loss during the year in

relation to nancial instruments carried at amortised cost.

(b) Financial Instruments Measured at Fair Value

The Company has used forward foreign exchange contracts to hedge its exposure to exchange rate

movements during the year. These nancial instruments do not qualify for measurement at either

amortised cost or at fair value through other comprehensive income (“FVTOCI”), therefore they are

nancial instruments that have mandatorily been measured at fair value through prot or loss

(“FVTPL”). The fair value of forward foreign exchange contracts is determined by comparing the cash

ows generated by the contract with the coterminous cash ows potentially available in the forward

exchange market on the balance sheet date. Details of the fair value gains and losses recognised

during the year on derivative contracts are given in note C7.

Due to their short-term nature, the carrying value of current receivables from subsidiaries, payables to

subsidiaries, accruals, other payables and provisions approximates their fair value. The carrying value

of the loan receivable from a subsidiary approximates its fair value as interest is charged based on a

margin over current bank lending rates.

C9. Financial Risk Management

The Company’s activities expose it to certain nancial risks, namely market risk (including foreign

exchange risk and interest rate risk), as well as credit risk and liquidity risk. From the perspective of the

Company, these nancial risks are integrated with the nancial risks of the Hunting PLC Group and are

not managed separately.

(a) Foreign Exchange Risk

The Company is mainly exposed to foreign exchange risk from its nancing and operating activities

in respect of Sterling. Foreign exchange risks arise from future transactions and cash ows and from

recognised monetary assets and liabilities that are not denominated in US Dollars and, where

appropriate, forward foreign exchange contracts are used to manage the exposure to changes in

foreign exchange rates. The Company has Sterling denominated nancial assets and nancial liabilities.

Loans receivable from a subsidiary of $0.2m (2022 – $0.2m) at the year-end are denominated in

Sterling, with exchange differences being recognised in the income statement in the following year.

The carrying amount of the Company’s nancial liabilities included in accruals and other payables

at 31 December 2023, on which exchange differences would be recognised in the income statement

in the following year, was $2.3m (2022 – $2.1m) for Sterling denominated nancial liabilities.

(b) Interest Rate Risk

The Company is exposed to cash ow interest rate risk from its loans receivable from a subsidiary,

which are at variable interest rates.

The Company’s credit risk arises from its outstanding current receivables and loans receivable from

a subsidiary. The Company is exposed to credit risk to the extent of non-receipt of its nancial assets;

however, it has no signicant concentrations of credit risk other than from related parties. Credit risk is

continually monitored and no individual exposure is considered signicant in the ordinary course of the

Company’s activities.

The interest-bearing loans receivable due from a subsidiary have not been impaired as no losses are

expected from non-performance of this counterparty. The credit risk at the time the loans were taken

out was deemed low and there has not been an increase in the credit risk since the time the loans

were initially recognised. Therefore, management does not believe that there is a signicant increase

in credit risk such that the loans move from stage 1 to stage 2 of the IFRS 9 general impairment model.

There is no history of default and previously all payments under the original terms of the loan have

been made. The loans are with the Group’s central treasury company, which has sufcient cash,

short-term deposits and credit facilities to repay the loan. Management does not have any reason

to believe that any future payments will not be made in accordance with the terms of the loans.

Therefore, no provision for 12-month expected credit losses has been made under IFRS 9.

The Company’s outstanding receivables due from subsidiaries are current accounts and no losses

are expected from non-performance of these counterparties.

(d) Liquidity Risk

(i) Management of Cash

The Company has sufcient facilities available to satisfy its requirements. The Company submits

weekly and bi-monthly cash forecasts to Hunting’s treasury function to enable them to monitor the

Company’s and the Group’s requirements.

The Group’s treasury function has put in place a cash concentration structure across the Hunting

Group’s bank accounts in the UK, such that at the end of each day balances in any of their bank

accounts are swept to the Group’s central treasury function, with a corresponding increase or

decrease in the loan receivable balance with fellow group companies. As a result, there was no

cash at bank held at 31 December 2023 or 31 December 2022.

Notes to the Company Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 233Strategic Report Corporate Governance Financial Statements Other Information

(d) Liquidity Risk continued

(ii) Future Cash Flows of Financial Liabilities

The following table analyses the expected timings of cash outows for each of the Company’s

non-derivative nancial liabilities. The table below analyses the Company’s cash outows into relevant

maturity groupings based on the remaining period at the balance sheet date to the contractual

maturity dates of the nancial liabilities. The amounts disclosed in the table are the contractual,

undiscounted cash ows and include interest cash ows, where applicable, so will not always

reconcile with the amounts disclosed in the Company balance sheet. The carrying values are the

amounts in the Company balance sheet and are the discounted amounts.

2023 2022

On demand

or within

one year

Carrying

value

On demand

or within

one year

Carrying

value

Non-derivative nancial liabilities:

Payables to subsidiaries 1.3 1.3 0.2 0.2

Accruals 1.1 1.1 1.0 1.0

Other payables 0.3 0.3 0.3 0.3

2.7 2.7 1.5 1.5

The Company did not have any derivative nancial liabilities at the end of 2023 or 2022.

C10. Capital Risk Management

The Company’s capital consists of equity and net cash. Net cash comprises the loan receivable from

a subsidiary and borrowings. It is managed with the aim of maintaining an appropriate level of

nancing available for the Company’s activities, having due regard to interest rate risks and the

availability of borrowing facilities.

Changes in equity arise from the retention of earnings and from issues of share capital. Net cash is

monitored on a periodic basis. At the year-end, capital comprised:

2023

2022

Total equity 803.3 787.6

Net cash: Loans receivable from subsidiary (note C5) (599.6) (581.2)

Capital employed 203.7 206.4

The increase in total equity during the year is mainly attributable to the total comprehensive income for

the year of $27.5m and the increase of $11.9m for the net share-based payment charge being offset

by the payment of dividends of $15.0m and the net increase in treasury shares of $8.7m.

C11. Financial Instruments: Sensitivity Analysis

The following sensitivity analysis is intended to illustrate the sensitivity to changes in market variables

on the Company’s nancial instruments and show the impact on prot or loss and shareholders’

equity. Financial instruments affected by market risk include non-current receivables from subsidiaries

and borrowings. The sensitivity analysis relates to the position as at 31 December 2023.

The analysis excludes the impact of movements in market variables on the carrying value of provisions

and on non-nancial assets and liabilities.

The following assumptions have been made in calculating the sensitivity analysis:

• Foreign exchange rate and interest rate sensitivities have an asymmetric impact on the Company’s

results, meaning an increase in rates does not result in the same amount of movement as a

decrease in rates;

• For oating rate assets and liabilities, the amount of asset or liability outstanding at the balance

sheet date is assumed to be outstanding for the whole year; and

• The carrying values of nancial assets and liabilities carried at amortised cost do not change as

interest rates change.

(a) Interest Rate Sensitivity

The sensitivity rate of 2.0% (2022 – 1.0%) for US interest rates represents management’s assessment

of a reasonably possible change, based on historical volatility and a review of analysts’ research and

banks’ expectations of future interest rates. The impact on the income statement, with all other

variables held constant, in applying the sensitivity results in a $9.2m (2022 – $4.7m) increase or

decrease in post-tax prots for an increase or decrease in US interest rates. The movements arise on

US dollar denominated intra-Group loans. There is no impact on OCI for a change in interest rates.

(b) Foreign Exchange Rate Sensitivity

The sensitivity rate of 5.0% (2022 – 5.0%) for Sterling foreign exchange rates represents management’s

assessment of a reasonably possible change, based on historical volatility and a review of analysts’

research and banks’ expectations of future interest rates. The impact on the income statement, with

all other variables held constant, in applying the sensitivity results in an immaterial increase or

decrease in post-tax prots for an increase or decrease in Sterling foreign exchange rates. There is

no impact on OCI for a change in foreign exchange rates.

C12. Post-employment Benets

The Company has no employees and therefore does not participate in any of the post-employment

benet schemes shown in note 32 of the Group’s nancial statements, although it does guarantee the

contributions due by the participating employers.

C13. Share Capital and Share Premium

Please see note 33 of the Group’s nancial statements.

Notes to the Company Financial Statements continued

C9. Financial Risk Management continued

Hunting PLC Annual Report and Accounts 2023 234Strategic Report Corporate Governance Financial Statements Other Information

C14. Other Components of Equity

2023

Merger

reserve

Share-based

payments

reserve

Currency

translation

reserve

Capital

redemption

reserve

Total

At 1 January 2023 11.8 15.9 (19.2) 0.8 9.3

Share options and awards:

– value of employee services – 12.3 – – 12.3

– discharge – (8.3) – – (8.3)

Transfer between reserves (11.8) – – – (11.8)

At 31 December 2023 – 19.9 (19.2) 0.8 1.5

2022

Merger

reserve

Share-based

payments

reserve

Currency

translation

reserve

Capital

redemption

reserve

Total

At 1 January 2022 25.4 15.6 (19.2) 0.8 22.6

Share options and awards:

– value of employee services – 9.4 – – 9.4

– discharge – (9.1) – – (9.1)

Transfer between reserves (13.6) – – – (13.6)

At 31 December 2022 11.8 15.9 (19.2) 0.8 9.3

The merger reserve comprises the proceeds received, net of transaction costs, in excess of the

nominal value of the Ordinary shares issued by way of the share placing completed on 31 October

2016. In accordance with section 612 of the Companies Act 2006, the premium was credited to the

merger reserve, instead of to the share premium account, because the share placing was pursuant to

the Company securing over 90% of another entity. The proceeds were used to pay down the Group’s

borrowings at that time. The reserve is currently non-distributable and is transferred to distributable

retained earnings when the proceeds meet the denition of a qualifying consideration. During the year,

the remaining balance of $11.8m (2022 – $13.6m) was transferred from the merger reserve to retained

earnings. This portion of the reserve was considered to be realised, as the equivalent amount of the

proceeds from the share placing in 2016 have now met the denition of qualifying consideration.

The share-based payments reserve represents the Company’s obligation to settle share-based

awards issued to employees of the Hunting PLC Group. When employees exercise their awards, the

portion of the share-based payments reserve which represents the share-based payment charge for

those awards is transferred to retained earnings and the Group discharges its obligation.

The currency translation reserve contains the accumulated foreign exchange differences arising on

foreign currency loans used to nance foreign currency net investments and also foreign exchange

differences arising on the Company’s change in presentational currency from Sterling to US Dollars

on 1 January 2013.

The capital redemption reserve is a statutory, non-distributable reserve into which amounts are

transferred following the purchase of the Company’s own shares out of distributable prots.

C15. Retained Earnings

2023

2022

At 1 January 558.8 548.1

Prot for the year 27.5 9.5

Dividends paid to Hunting PLC shareholders (note C16) (15.0) (13.6)

Treasury shares:

– purchase of treasury shares (9.0) (7.9)

– proceeds on disposal of treasury shares 0.3 0.2

Share options and awards:

– discharge 7.9 8.9

Transfer between reserves 11.8 13.6

At 31 December 582.3 558.8

Retained earnings include the following amounts in respect of the carrying amount of treasury shares:

2023

2022

Cost:

At 1 January (19.2) (15.0)

Purchase of treasury shares (9.0) (7.9)

Cost of treasury shares disposed 6.0 3.7

At 31 December (22.2) (19.2)

At 31 December 2023, 6,591,918 Ordinary shares were held by the Employee Benet Trust

(2022 – 5,370,963). The Company purchased 2,935,096 (2022 – 2,130,142) additional treasury shares

during the year for $9.0m (2022 – $7.9m). The loss on disposal of treasury shares during the year,

which is recognised in retained earnings, was $5.7m (2022 – $3.5m).

C16. Dividends Paid to Hunting PLC Shareholders

Please see note 36 of the Group’s nancial statements.

C17. Share-based Payments

Please see note 37 of the Group’s nancial statements.

Notes to the Company Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 235Strategic Report Corporate Governance Financial Statements Other Information

C18. Related-party Transactions

The following related-party transactions took place between the Company and subsidiaries of the

Group during the year:

2023

2022

Transactions:

Royalties receivable 12.6 10.0

Management fees payable (11.0) (9.7)

Recharges of share options and awards and administrative expenses 15.8 10.0

Loans to subsidiary (18.2) (121.3)

Interest receivable on intercompany loans 40.2 16.0

Dividends received from subsidiaries – 126.2

Year-end balances:

Payables to subsidiaries (1.3) (0.2)

Receivables from subsidiaries 0.1 1.1

Loans owed by subsidiaries 599.6 581.2

All balances between the Company and its subsidiaries are unsecured.

The Company serves as the intermediary for certain Group insurances and is also the head of the VAT

group for UK central companies.

The key management of the Company comprises the Hunting PLC Board and members of the

Executive Committee. A summary of their remuneration is disclosed in note 7 of the Group’s nancial

statements. The Hunting PLC Board and members of the Executive Committee had no material

transactions other than as a result of their service agreements.

Hunting PLC is the parent company of the Hunting PLC Group. The Company is listed on the London

Stock Exchange, with none of the shareholders owning more than 20% of the issued share capital of

the Company (see page 162). Accordingly, the Directors do not consider there to be an ultimate

controlling party.

C19. Associates and Joint Ventures

Associates are all entities over which the Group has signiignificant inuencfluence but not control or joint control.

This is generally the case where the Group holds between 20% and 50% of the voting rights. Joint

ventures are entities where the Group has joint control over the entity.

Changes During the Year

(a) Rival Downhole Tools

The Group’s effective shareholding in Rival Downhole Tools LC decreased during the year to 23.0%,

from 23.5% in 2022, as there was a change in the agreement.

(b) Cumberland Additive

The Group increased its investment in Cumberland Additive Holdings LLC during the year by $1.6m.

The Group’s effective shareholding has increased to 30.4% as a result of the additional investment.

Tianjin Huaxin Premium Connection Pipe Co., Ltd., in which the Company held a 25.5% interest,

was dissolved in April 2023.

Associates and joint ventures	Registered address
Rival Downhole Tools LC (23.0%)	5535	Brystone Drive, Houston, Texas, 77041-
	70	13, USA
Cumberland Additive Holdings LLC (30.4%)	3813	Helios Way, Suite B200, Pugerflugerville, Texas,
	78	660, USA
Hunting Airtrust Tubulars Pte. Ltd (50%)	19 Keppel Road, 08-05 JIT Poh Building,
	089058,	Singapore
Jindal Hunting Energy Services Limited (49%)	A-1, UPSIDC Industrial Area, Nand Gaon Road,
	Kosi Kalan, Mathura, Uttar Pradesh, 281403 India

i/ii

iii

i. All interests are in the Ordinary equity shares of those companies.

ii. Interest in company is held indirectly by Hunting PLC.

iii. Associates and joint ventures are incorporated and operate in the countries indicated.

iv. Hunting Airtrust Tubulars Pte. Ltd is in liquidation.

C20. Subsidiaries

Changes to the Group

(a) Hunting Aviation Limited

Hunting Aviation Limited was dissolved in August 2023. The company was previously liquidated

in 2015; however, it was restored to the Register of Companies by court order in 2018.

(b) Hunting Energy Services South Africa (Pty) Ltd

Hunting Energy Services South Africa (Pty) Ltd was deregistered in February 2023.

Hunting Energy Services FZE was incorporated in July 2023.

Notes to the Company Financial Statements continued

Hunting PLC Annual Report and Accounts 2023 236Strategic Report Corporate Governance Financial Statements Other Information

StrategicReportCorporateGovernanceFinancialStatementsOtherInformationHuntingPLCAnnualReportandAccounts2023237

Notes to the Company Financial Statements continued

C20. Subsidiaries continued

All companies listed below are wholly owned by the Group, except where otherwise indicated.

Subsidiaries

i/ii

Registered address

National Coupling Company, Inc. 1316 Staffordshire Road, Staffordshire, Texas,

Subsidiaries

i/ii

Registered address

77477, USA

Operating activities

Hunting Energy Services, LLC 16825 Northchase Drive, Suite 600, Houston,

Hunting Energy Services (Australia) Pty Ltd Level 40, Governor Macquarie Tower, 1 Farrer

Texas, 77060, USA

Place, Sydney, NSW, 2000, Australia

Premium Finishes, Inc. 16825 Northchase Drive, Suite 600, Houston,

Hunting Energy Services (Canada) Ltd. 5550 Skyline Way NE, Calgary, Alberta, T2E 7Z7,

Texas, 77060, USA

Canada

Hunting Dearborn, Inc. 6 Dearborn Drive, Fryeburg, Maine, 04037, USA

Hunting Energy Services (Wuxi) Co., Ltd (70%) Plot 48, Phase 5, Shuofang Industrial Park, Wuxi

Hunting Energy Services (Drilling Tools), Inc. 16825 Northchase Drive, Suite 600, Houston,

New District, Jiangsu Province, China 214142

Texas, 77060, USA

Hunting Energy Completion Equipment (Wuxi)

Plot 48, Phase 5, Shuofang Industrial Park, Wuxi

Hunting Innova, Inc. 8383 North Sam Houston Parkway West,

Co., Ltd.

New District, Jiangsu Province, China 214142

Houston, Texas, 77064, USA

Hunting Energy Services (UK) Limited 30 Panton Street, London SW1Y 4AJ, England

Hunting Specialty Supply, Inc. 100 E. Wally Wilkerson Parkway, Conroe, Texas,

Enpro Subsea Limited Badentoy Avenue, Badentoy Industrial Estate,

77303, USA

Portlethen, Aberdeen, AB12 4YB, Scotland

Hunting Titan, Inc. 16825 Northchase Drive, Suite 600, Houston,

Enpro Subsea Operations Limited Badentoy Avenue, Badentoy Industrial Estate,

Texas, 77060, USA

Portlethen, Aberdeen, AB12 4YB, Scotland

Tenkay Resources, Inc. 16825 Northchase Drive, Suite 600, Houston,

Enpro Subsea Group Limited Badentoy Avenue, Badentoy Industrial Estate,

Texas, 77060, USA

Portlethen, Aberdeen, AB12 4YB, Scotland

Enpro Subsea Ghana Ltd (83%) House No. F676/1, Angola Road, Kuku Hill, Osu,

Corporate activities

Accra, Ghana

iii

Hunting Energy Holdings Limited

30 Panton Street, London SW1Y 4AJ, England

Enpro Subsea Group Ghana Limited House No. F676/1, Angola Road, Kuku Hill, Osu,

Hunting Energy Services (International) Limited 30 Panton Street, London SW1Y 4AJ, England

Accra, Ghana

Hunting Energy Services Overseas Holdings

30 Panton Street, London SW1Y 4AJ, England

PT Hunting Energy Asia Complex Dragon Industrial Park, Block D, Jalan

Limited

Pattimura, Kabil Batam, 29467, Indonesia

iii/iv

Hunting Oil Holdings Limited

30 Panton Street, London SW1Y 4AJ, England

Hunting Alpha (EPZ) Limited (60%)

Block XLVIII/150, Off Mbaraki Road, P.O. Box

83344-80100, Mombasa, Kenya

Hunting Knightsbridge Holdings Limited 30 Panton Street, London SW1Y 4AJ, England

Hunting Energy de Mexico Avenida Los Olmos #105, Parque Industrial

Huntaven Properties Limited

30 Panton Street, London SW1Y 4AJ, England

El Sabinal, Apodaca, Nuevo Leon, Monterrey,

HG Management Services Ltd 30 Panton Street, London SW1Y 4AJ, England

Mexico

Hunteld THuntfield Trust Limited

30 Panton Street, London SW1Y 4AJ, England

Hunting Energy Services B.V. Olieweg 10, 1951 NH Velsen-Noord, Netherlands

Stag Line Limited

30 Panton Street, London SW1Y 4AJ, England

Hunting Energy Services (Norway) AS Arabergveieb 6, 4050 Sola, Norway

Hunting U.S. Holdings, Inc. 16825 Northchase Drive, Suite 600, Houston,

Hunting Energy Saudi Arabia LLC (65%) Dhahran, Building No: 7612, P.O. Box: 3104, Zip

Texas, 77060, USA

Code: 34521, Saudi Arabia

i. Except where otherwise stated, companies are wholly owned, being incorporated and operating in the countries indicated. All subsidiary

Hunting Energy Services Limited Badentoy Avenue, Badentoy Park, Portlethen,

undertakings have been included in the consolidated nancial stated financial statements.

ii. All interests in subsidiaries are in the Ordinary equity shares of those companies. The proportion of voting rights is represented by the

Aberdeen, AB12 4YB, Scotland

interest in the Ordinary equity shares of those companies.

Hunting Energy Services Pte. Ltd 16E Tuas Avenue 1, #01-61 Singapore 639537

iii. Interest in company is held directly by Hunting PLC.

iv. Hunting Oil Holdings Limited (registered number 01103530), Huntaven Properties Limited (registered number 00841865), Huntetfield Trust

Hunting Energy Services (China) Pte. Ltd. (70%) 16E Tuas Avenue 1, #01-61 Singapore 639537

Limited (registered number 00372215) and Stag Line Limited (registered number 00151320) are dormant companies that are exempt from

being audited, are exempt from the requirements to prepare individual accounts under section 394A of the Companies Act 2006 and are

Hunting Energy Services (Thailand) Limited (49%)

436/27, Moo 2, Thanadee-Klongwong Road,

exempt from linm filing individual accounts under section 448A of the Companies Act 2006.

Tambol Phawong, Amphur Muong Songkhla,

v. Hunting Alpha (EPZ) Limited and Hunting Energy Services (Thailand) Limited are in liquidation.

90100, Thailand

Hunting Energy Services India Private Limited 602, Block A, Naurang House,

21 KG Marg, Canaught Place, New Delhi,

Central Delhi 110001, India

Hunting Energy Services FZE S40432, Jebel Ali Freezone, Dubai, UAE

OTHER

INFORMATION

Non-GAAP Measures 239

Financial Record 245

Shareholder and Statutory Information 246

Glossary 248

Professional Advisers 252

Strategic Report Corporate Governance Financial Statements Other Information 238Hunting PLC Annual Report and Accounts 2023

The performance of the Group is assessed by the Directors using a number of measures, which are

not dened under IFRS, and are therefore considered to be non-GAAP measures (“NGMs”). However,

the measures used by the Group may not be comparable with similarly described measures

presented by other businesses.

The Group presents adjusted protability measures below, which exclude adjusting items (see NGM A).

The adjusted results, when considered together with results reported under IFRS, provide investors,

analysts and other stakeholders with complementary information which aids comparison of the

Group’s nancial performance from one period to the next. These adjusted measures are used by

management for planning, reporting and performance management purposes. The adjusted

protability measures are reconciled to unadjusted IFRS results presented on the face of the income

statement, with details of the adjusting items provided in NGM A. Adjusted results can be higher or

lower than the IFRS results as they often exclude signicant items and should not be regarded as a

complete picture of the Group’s nancial performance, which is presented by the IFRS results in the

income statement.

In addition, the Group’s results and nancial position are analysed using certain other measures that

are not dened under IFRS and are therefore considered to be NGMs. These measures are used by

management to monitor ongoing business performance. This section provides a denition of each

NGM presented in this report, the purpose for which the measure is used and a reconciliation of the

NGM to the reported IFRS numbers.

The auditors are required under the Companies Act 2006 to consider whether these non-GAAP

measures are prepared consistently with the nancial statements.

Income Statement Non-GAAP Measures

A. Adjusting Items

Due to their size and nature, the following items are considered to be adjusting items and have been

presented separately.

2023

2022

Impairment of goodwill (note 5) – (7.0)

Legal fees (note 5) – (5.6)

Total adjustments to operating prot – (12.6)

Tax impact of adjusting items (note 5) 83.1 –

Adjusting items after tax 83.1 (12.6)

Adjusting items after tax attributable to owners of the parent 83.1 (12.6)

Adjusting items after tax attributable to non-controlling interests – –

83.1 (12.6)

B. Adjusted Protability Measures

Certain reported prot and loss measures are adjusted for the items described in NGM A. This is the

basis used by the Directors in assessing performance.

2023

2022

Operating prot – consolidated income statement 61.0 2.0

Add back adjusting items (NGM A) – 12.6

Adjusted operating prot 61.0 14.6

Prot/(loss) before tax – consolidated income statement 50.0 (2.4)

Add back adjusting items (NGM A) – 12.6

Adjusted prot before tax 50.0 10.2

Prot/(loss) for the year attributable to owners of the parent

– consolidated income statement 117.1 (4.6)

(Deduct)/add back adjusting items after tax attributable to owners of the

parent (NGM A) (83.1) 12.6

Adjusted prot for the year attributable to owners of the parent 34.0 8.0

cents cents

Adjusted earnings per share:

Adjusted basic EPS 21.4 5.0

Adjusted diluted EPS 20.3 4.7

C. EBITDA

Purpose: This prot measure is used as a simple proxy for pre-tax cash ows from operating activities.

EBITDA is frequently used by analysts, investors and other interested parties.

Calculation denition: Adjusted results before share of associates’ and joint ventures’ results, interest,

tax, depreciation, impairment of non-current assets and amortisation.

2023

2022

Operating prot – consolidated income statement 61.0 2.0

Add back adjusting items (NGM A) – 12.6

Adjusted operating prot (NGM B) 61.0 14.6

Add back:

Depreciation of property, plant and equipment (note 11) 27.2 26.6

Depreciation of right-of-use assets (note 12) 6.6 6.4

Amortisation of other intangible assets (note 14) 6.6 4.4

Impairment of right-of-use assets (note 12) 0.2 –

Impairment of goodwill (note 13) 1.4 –

42.0 37.4

EBITDA 103.0 52.0

Non-GAAP Measures

Hunting PLC Annual Report and Accounts 2023 239Strategic Report Corporate Governance Financial Statements Other Information

C. EBITDA continued

EBITDA by Operating Segment

2023

Hunting

Titan

North

America

Subsea

Technologies

EMEA

Asia

Pacic

Total

Operating prot – condensed consolidated income statement 12.7 34.1 8.0 (2.3) 8.5 61.0

Add back adjusting items (NGM A) – – – – – –

Adjusted operating prot (NGM B) 12.7 34.1 8.0 (2.3) 8.5 61.0

Add back:

Depreciation of property, plant and equipment and right-of-use assets (note 2) 7.5 17.9 2.4 3.4 2.6 33.8

Amortisation of other intangible assets (note 2) 1.7 2.0 1.9 0.6 0.4 6.6

Impairment of non-current assets (note 2) – 0.2 1.4 – – 1.6

9.2 20.1 5.7 4.0 3.0 42.0

EBITDA 21.9 54.2 13.7 1.7 11.5 103.0

2022

Hunting

Titan

North

America

Subsea

Technologies

EMEA

Asia

Pacic

Total

Operating prot – condensed consolidated income statement 10.3 9.2 (8.1) (6.0) (3.4) 2.0

Add back adjusting items (NGM A) 5.6 – 7.0 – – 12.6

Adjusted operating prot (NGM B) 15.9 9.2 (1.1) (6.0) (3.4) 14.6

Add back:

Depreciation of property, plant and equipment and right-of-use assets (note 2) 7.5 16.5 2.7 3.6 2.7 33.0

Amortisation of other intangible assets (note 2) 1.3 1.0 1.8 0.3 – 4.4

8.8 17.5 4.5 3.9 2.7 37.4

EBITDA 24.7 26.7 3.4 (2.1) (0.7) 52.0

D. Adjusted Tax Charge and Effective Tax Rate

Purpose: The weighted average effective tax rate represents the level of tax, both current and deferred, being borne by operations on an adjusted basis.

Calculation denition: The adjusted taxation charge divided by adjusted prot before tax, expressed as a percentage.

2023

2022

Taxation credit/(charge) – consolidated income statement 69.0 (1.3)

Deduct tax impact of adjusting items (NGM A) (83.1) –

Adjusted taxation charge (14.1) (1.3)

Adjusted prot before tax for the year (NGM B) 50.0 10.2

Adjusted effective tax rate 28% 13%

Adjusting items are taxed on an item-by-item basis as shown in NGM A.

Non-GAAP Measures continued

Income Statement Non-GAAP Measures continued

Hunting PLC Annual Report and Accounts 2023 240Strategic Report Corporate Governance Financial Statements Other Information

Balance Sheet Non-GAAP Measures

E. Working Capital

Purpose: Working capital is a measure of the Group’s liquidity identifying whether the Group has

sufcient assets to cover liabilities as they fall due.

Calculation denition: Trade and other receivables excluding receivables from associates, derivative

nancial assets not in a hedge and deferred bank fees, plus inventories less trade and other payables

excluding payables due to associates, derivative nancial liabilities not in a hedge and retirement plan

obligations.

2023

2022

Trade and other receivables – non-current (note 18) 1.8 2.8

Trade and other receivables – current (note 18) 251.4 232.4

Inventories (note 20) 328.4 272.1

Trade and other payables – current (note 22) (163.4) (141.8)

Trade and other payables – non-current (note 22) (3.7) (3.2)

Add: non-working capital US deferred compensation plan obligation

(note 22) 2.2 1.9

Less: non-working capital current other receivables and other payables (0.8) (1.4)

Working capital 415.9 362.8

Revenue for the last three months of the year 228.2 207.1

Working capital as a percentage of annualised revenue 46% 44%

For the purposes of the above calculation, annualised revenue is calculated as revenue for the last

three months of the year multiplied by four.

F. Inventory Days

Purpose: This is a working capital efciency ratio that measures inventory balances relative to

business activity levels.

Calculation denition: Inventory at the year-end divided by cost of sales for the last three months of the

year multiplied by 92 days, adjusted for the impact of acquisitions and disposals when applicable.

2023

2022

Inventories (note 20) 328.4 272.1

Cost of sales for the last three months of the year 172.7 157.1

Inventory days 175 days 159 days

G. Trade Receivables Days

Purpose: This is a working capital efciency ratio that measures receivable balances relative to

business activity levels.

Calculation denition: Net trade receivables, accrued revenue and contract assets at the year-end

divided by revenue for the last three months of the year multiplied by the number of days in the last

quarter, adjusted for the impact of acquisitions and disposals when applicable.

2023

2022

Trade receivables 204.7 183.1

Accrued revenue 2.5 2.2

Contract assets 17.5 8.6

Less: provisions for impairment (3.5) (3.7)

Net receivables (note 18) 221.2 190.2

Revenue for the last three months of the year 228.2 207.1

Trade receivables days 89 days 84 days

H. Trade Payables Days

Purpose: This is a working capital efciency ratio that measures payables balances relative to business

activity levels.

Calculation denition: Trade payables and accrued goods received not invoiced (“accrued GRN”)

at the year-end divided by purchased materials and cash costs for the last three months of the year

multiplied by the number of days in the last quarter, adjusted for the impact of acquisitions and

disposals when applicable.

2023

2022

Trade payables (note 22) 62.5 66.8

Accrued GRN 6.3 8.4

Total payables 68.8 75.2

Purchased materials and cash costs for the last three months of the year 128.5 137.5

Trade payables days 49 days 50 days

Non-GAAP Measures continued

Hunting PLC Annual Report and Accounts 2023 241Strategic Report Corporate Governance Financial Statements Other Information

I. Other Net Assets

Purpose: Provides an analysis of other net assets in the Summary Group Balance Sheet in the

Strategic Report.

2023

2022

Non-current investments (note 17) 4.4 4.8

Non-working capital US deferred compensation plan obligation (NGM E) (2.2) (1.9)

Non-working capital current other receivables and other payables (NGM E) 0.8 1.4

3.0 4.3

J. Capital Employed

Purpose: Used in the calculation of the return on average capital employed (see NGM S).

Calculation denition: Capital employed is total equity excluding net (cash)/debt as applicable.

The Group’s capital comprised:

2023

2022

Total equity – consolidated balance sheet 957.1 846.2

Net debt (note 26) 33.4 10.0

990.5 856.2

K. Total Cash and Bank

Purpose: Total cash and bank is a key metric for management and for the Group treasury function,

which monitors this balance on a daily basis and reviews weekly forecasts to ensure there is sufcient

liquidity to meet business requirements. As the Group manages funding on a total cash and bank

basis, internal reporting focuses on changes in total cash and bank and this is presented in the

Strategic Report.

Calculation denition: Cash and cash equivalents, comprising cash at bank and in hand and short-term

deposits of less than three months to maturity from the date of deposit; and short-term deposits of

more than three months to maturity from the date of deposit; less bank overdrafts and bank borrowings.

The Group’s total cash and bank comprised:

2023

2022

Cash and cash equivalents (note 21) 45.5 29.4

Bank overdrafts secured – current borrowings (note 25) (1.4) (2.1)

Cash and cash equivalents – consolidated statement of cash ows 44.1 27.3

Bank borrowings – current borrowings (note 25) (44.9) (2.8)

(0.8) 24.5

L. Net Cash/(Debt)

Purpose: Net cash/(debt) is a measure of the Group’s liquidity and reects the Group’s cash and liquid

assets that would remain if all of its debts were to be immediately paid off.

Calculation denition: Net cash/(debt) comprises total cash and bank (NGM K) less total lease liabilities

and the shareholder loan from a non-controlling interest.

The Group’s net cash/(debt) comprised:

2023

2022

Total cash and bank (NGM K) (0.8) 24.5

Total lease liabilities (note 24) (28.7) (30.6)

Shareholder loan from non-controlling interests – non-current borrowings

(note 25) (3.9) (3.9)

(33.4) (10.0)

Cash Flow Non-GAAP Measures

M. Cash Flow Working Capital Movements

Purpose: Reconciles the working capital movements in the Summary Group Cash Flow in the

Strategic Report.

2023

2022

Working capital – opening balance 362.8 278.0

Foreign exchange 1.7 0.5

Adjustments:

Transfer to property, plant and equipment (note 11) (1.5) (1.6)

Capital investment receivables/payables cash ows 0.6 (0.6)

Asset disposals receivables/payables cash ows (1.5) –

Other non-cash ow movements (1.5) 0.1

Other cash ow movement 0.3 (0.2)

Working capital – closing balance (NGM E) (415.9) (362.8)

Cash ow (55.0) (86.6)

Non-GAAP Measures continued

Balance Sheet Non-GAAP Measures continued

Hunting PLC Annual Report and Accounts 2023 242Strategic Report Corporate Governance Financial Statements Other Information

N. Capital Investment

Purpose: Capital investment identies the cash resources being absorbed organically within the

business to maintain or enhance operating activity levels.

Calculation denition: Capital investment is the cash paid on tangible non-current assets to maintain

existing levels of operating activity and to grow the business from current operating levels and

enhance operating activity.

2023

2022

Property, plant and equipment additions (note 11) 23.1 17.0

Capital investment receivables/payables cash ows (NGM M) 0.6 (0.6)

Cash ow 23.7 16.4

Per the consolidated statement of cash ows:

Purchase of property, plant and equipment held for rental

– operating activities 0.6 0.5

Purchase of property, plant and equipment – investing activities 23.1 15.9

Cash ow 23.7 16.4

Capital investment by operating segment:

Hunting Titan 3.1 3.9

North America 14.5 6.3

Subsea Technologies 1.2 0.9

EMEA 2.4 0.7

Asia Pacic 2.2 2.6

Central 0.3 2.0

Cash ow 23.7 16.4

O. Other Operating Cash and Non-cash Movements

Purpose: Reconciles other operating cash and non-cash movements in the Summary Group Cash

Flow in the Strategic Report.

2023

2022

Increase in provisions – consolidated statement of cash ows 0.5 0.2

Other non-cash ow items (1.3) 0.3

(0.8) 0.5

P. Free Cash Flow

Purpose: Free cash ow is a measure of nancial performance and represents the cash that the

Group is able to generate. Free cash ow represents the amount of cash the Group has available

to either retain for investment, or to return to shareholders and is a KPI used by management.

Calculation denition: All cash ows before transactions with shareholders and investments by way

of acquisition.

2023

Restated

2022

EBITDA (NGM C) 103.0 52.0

Add: share-based payment charge (note 37) 13.5 9.9

116.5 61.9

Working capital movements (NGM M) (55.0) (86.6)

Payment of lease liabilities, principal and interest (10.4) (8.0)

Net interest and bank fees paid (7.3) (2.9)

Net taxation paid (9.1) (3.9)

Proceeds from asset disposals 1.9 9.0

Net gains on asset disposals (1.7) (2.8)

Legal fees to defend patent infringement claim – (5.6)

Other operating cash and non-cash movements (NGM O) (0.8) 0.5

Purchase of property, plant and equipment (23.1) (15.9)

Purchase of property, plant and equipment held for rental (0.6) (0.5)

Purchase of intangible assets (10.9) (5.6)

Free cash ow (0.5) (60.4)

Reconciliation to the consolidated statement of cash ows:

Net cash inow/(outow) from operating activities 49.3 (36.8)

Net interest and bank fees paid (7.3) (2.9)

Proceeds from disposal of property, plant and equipment 1.9 6.6

Purchase of property, plant and equipment (23.1) (15.9)

Purchase of intangible assets (10.9) (5.6)

Payment of lease liabilities, principal and interest (10.4) (8.0)

Net proceeds on disposal of lease liabilities – 2.2

Free cash ow (0.5) (60.4)

i. All above items appear in the consolidated statement of cash ows, unless stated.

ii. 2022 has been restated to include purchases of property, plant and equipment and purchases of intangible assets. Additionally, the

reconciliation to the consolidated statement of cash ows has been restated to start from ‘Net cash inow/(outow) from operating

activities’ which is the closest comparable IFRS measure to free cash ow.

Non-GAAP Measures continued

Cash Flow Non-GAAP Measures continued

Hunting PLC Annual Report and Accounts 2023 243Strategic Report Corporate Governance Financial Statements Other Information

Other Non-GAAP Measures

Q. Dividend Per Share Declared

Purpose: Identies the total amount of dividend declared in respect of a period. This is also used in the

calculation of dividend cover (see NGM R).

Calculation denition: The amount in cents returned to Ordinary shareholders.

2023

cents

2022

cents

Interim dividend 5.0 4.5

Final dividend 5.0 4.5

10.0 9.0

R. Dividend Cover

Purpose: An indication of the Company’s ability to maintain the level of its dividend and indicates

the proportion of earnings being retained in the business for future investment versus that returned

to shareholders.

Calculation denition: Earnings/(loss) per share attributable to Ordinary shareholders divided by the

cash dividend per share to be returned to Ordinary shareholders, on an accruals basis.

2023 2022

Adjusted

cents

Reported

cents

Adjusted

cents

Reported

cents

Earnings/(loss) per share

Basic (NGM B/note 10) 21.4 73.8 5.0 (2.8)

Diluted (NGM B/note 10) 20.3 70.0 4.7 (2.8)

Dividend (NGM Q) 10.0 10.0 9.0 9.0

Dividend cover

Basic 2.1x 7.4x 0.6x n/a

Diluted 2.0x 7.0x 0.5x n/a

S. Return on Average Capital Employed

Purpose: Measures the levels of return the Group is generating from its capital employed.

Calculation denition: Adjusted prot before interest and tax, amended to include the share of

associates’ and joint ventures’ results, as a percentage of average gross capital employed. Average

gross capital employed is a monthly average of capital employed based on 13 balance sheets from

the closing December balance in the prior year to the closing December balance in the current year.

2023

2022

Average monthly gross capital employed (13-point average) 936.1 821.3

Adjusted operating prot (NGM B) 61.0 14.6

Adjusted share of associates’ and joint ventures’ results (NGM B) (0.6) (2.7)

60.4 11.9

Return on average capital employed 6% 1%

Non-GAAP Measures continued

Hunting PLC Annual Report and Accounts 2023 244Strategic Report Corporate Governance Financial Statements Other Information

Financial Record

2023

2022

2021

2020

2019

Revenue 929.1 725.8 521.6 626.0 960.0

EBITDA 103.0 52.0 3.1 26.1 139.7

Depreciation and non-adjusting amortisation and impairment (42.0) (37.4) (38.2) (42.5) (45.4)

Operating prot/(loss) 61.0 14.6 (35.1) (16.4) 94.3

Net nance expense (10.4) (1.7) (2.0) (3.0) (1.2)

Share of associates’ and joint ventures’ results (0.6) (2.7) (3.5) – –

Prot/(loss) before tax 50.0 10.2 (40.6) (19.4) 93.1

Taxation (14.1) (1.3) (4.9) 0.9 (17.0)

Prot/(loss) for the year 35.9 8.9 (45.5) (18.5) 76.1

cents cents cents cents cents

Basic earnings/(loss) per share 21.4 5.0 (27.1) (10.0) 45.0

Diluted earnings/(loss) per share 20.3 4.7 (27.1) (10.0) 43.9

Dividend per share

10.0 9.0 8.0 9.0 5.0

$m $m $m $m $m

Balance sheet

Property, plant and equipment 254.5 256.7 274.4 307.1 354.7

Right-of-use assets 26.2 26.0 24.7 29.8 36.7

Goodwill and other intangible assets 195.2 191.2 200.3 207.1 308.7

Working capital 415.9 362.8 278.0 358.3 433.3

Associates and joint ventures 20.5 20.1 19.4 18.1 0.7

Taxation (current and deferred) 82.7 4.0 1.4 6.0 19.8

Provisions (7.5) (8.9) (8.1) (8.9) (8.4)

Other net assets 3.0 4.3 2.7 1.6 0.4

Capital employed 990.5 856.2 792.8 919.1 1,145.9

Total cash and bank (0.8) 24.5 114.2 101.7 127.0

Lease liabilities (28.7) (30.6) (31.8) (40.3) (45.2)

Other borrowings (3.9) (3.9) (3.9) (3.9) (3.9)

Net (debt)/cash (33.4) (10.0) 78.5 57.5 77.9

Net assets 957.1 846.2 871.3 976.6 1,223.8

Non-controlling interests (3.3) (1.6) (1.4) (12.2) (15.9)

Equity attributable to owners of the parent 953.8 844.6 869.9 964.4 1,207.9

cents cents cents cents cents

Net assets per share 580.4 513.2 528.4 592.2 733.3

i. Income statement is presented after the impact of adjusting items.

ii. Dividend per share is stated on a declared basis.

Hunting PLC Annual Report and Accounts 2023 245Strategic Report Corporate Governance Financial Statements Other Information

Shareholder and Statutory Information

Registered ofce

30 Panton Street

London

SW1Y 4AJ

Company Number: 00974568 (Registered in England and Wales)

Telephone: +44 (0)20 7321 0123

Email: lon.ir@hunting-intl.com

LinkedIn: https://www.linkedin.com/company/hunting-energy-services/

Financial calendar

The Company’s 2024 nancial calendar is as follows:

Date Event

29 February 2024 2023 Full Year Results Announcement

29 February 2024 2023 Final Dividend – Announcement date

14 March 2024 Publication of Annual Report and Notice of AGM

11 April 2024 Final Dividend – Ex-dividend date

12 April 2024 Final Dividend – Record date

17 April 2024 Trading Statement

17 April 2024 AGM and Proxy Voting Results of AGM

10 May 2024 Final Dividend – Payment date

8 July 2024 Trading Statement

29 August 2024 2024 Half Year Results Announcement

29 August 2024 2024 Interim Dividend – Announcement date

3 October 2024 Interim Dividend – Ex-dividend date

4 October 2024 Interim Dividend – Record date

24 October 2024 Trading Statement

25 October 2024 Interim Dividend – Payment date

Financial reports

The Company’s 2023 Annual Report and Accounts is available on the Company’s website from the

date of publication. Shareholders may elect to receive a copy by contacting the Registrar. Copies of

previous nancial reports are available at www.huntingplc.com. In common with many public companies

in the UK, the Company no longer publishes a printed version of its half year report. The half year

report is only available online from the Company’s website at www.huntingplc.com.

Registrar

The Company’s Registrar, Equiniti, offers a range of shareholder information and dealing services

at www.shareview.co.uk. The address and contact details of Equiniti are as follows:

Equiniti Limited

Aspect House

Spencer Road, Lancing

West Sussex BN99 6DA

Telephone: +44 (0)371 384 2173

Equiniti is also the Company’s single alternative inspection location where, with prior appointment,

individuals can inspect the register of members.

Analysis of Ordinary shareholders

At 31 December 2023, the Company had 1,263 Ordinary shareholders (2022 – 1,285) who held

164.9m (2022 – 164.9m) Ordinary shares analysed as follows:

2023 2022

% of total

shareholders

% of total

shareholders

% of total

Size of holdings

1 – 4,000 71.3 0.5 72.3 0.5

4,001 – 20,000 10.0 0.7 10.2 0.7

20,001 – 40,000 4.2 0.9 3.4 0.8

40,001 – 200,000 7.4 5.4 7.7 5.7

200,001 – 500,000 2.3 5.4 2.2 5.6

500,001 and over 4.8 87.1 4.2 86.7

Further information on share capital can be found in note 33.

Hunting PLC Annual Report and Accounts 2023 246Strategic Report Corporate Governance Financial Statements Other Information

Annual General Meeting 2024

The AGM of the Company will take place on Wednesday 17 April 2024 at the Royal Automobile Club,

89 Pall Mall, London SW1Y 5HS, commencing at 10.30a.m.

Format and business of meeting

The 2024 AGM is planned to be an open meeting, with shareholders welcome to attend.

The formal business of the AGM will involve putting to the meeting a number of ordinary and special

resolutions. Details of the resolutions will be communicated to shareholders ahead of the meeting in

a formal “Notice of AGM”. The Notice will also contain explanatory notes that will provide details to

shareholders on how to lodge their vote. Those shareholders who have elected to continue to receive

hard copy documentation or have signed up to receive a notication by e-mail will also receive a proxy

form, which will contain details of how to lodge a vote by proxy.

The AGM is to be broadcast via the internet. Details of the web-link will be included in the Notice of

AGM. Prior to the formal business of the AGM, a presentation will be delivered by the Chief Executive.

The Directors have made available to shareholders the ability to submit questions ahead of the AGM.

These questions will be answered during the presentation noted above. Shareholders are therefore

asked to submit all questions, in relation to the business to be considered at the AGM, by Monday

15 April 2024, to the Company’s registered ofce, for the attention of the Company Secretary.

Alternatively, questions can be submitted via email at lon.agm@hunting-intl.com.

Shareholder voting procedures follow the provisions of the Articles of Association of the Company

(the “Articles”) and the UK Corporate Governance Code, including a separate resolution on each

material item of business, the availability of voting via proxy and the offer of a “vote withheld”.

Voting on all resolutions at the AGM will be completed via proxy. Alternatively, shareholders may

submit proxy voting instructions via the internet at www.sharevote.co.uk or via Equiniti’s online

portfolio service, Shareview, if they are registered as a member. Alternatively, shares held in CREST

may be voted through the CREST Proxy Voting Service. To be valid, all votes must be received no

later than 10.30a.m. on Monday 15 April 2024.

A new Directors’ Remuneration Policy (the “Policy”) will be put to shareholders for approval. The Policy

is binding which means that after it takes effect, all payments to Directors by way of remuneration or

for loss of ofce after that date must be made in accordance with the Policy. If approved, the Policy

will take effect from the end of the AGM and will replace the Remuneration Policy approved by

shareholders in 2021. The Policy can be found on pages 137 to 145 of the Company’s 2023 Annual

Report and Accounts.

As part of the routine business to be considered at the AGM, all Directors’ will submit themselves for

reappointment.

Documents on display

Copies of the executive Directors’ service contracts and letters of appointment of non-executive

Directors will be available for inspection at the Company’s registered ofce from the date the Notice

of AGM is issued (being 21 clear days’ notice ahead of the meeting) until the time of the AGM and at

the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS from 15 minutes before the AGM starts

until it ends.

Non-nancial information and sustainability statement

In accordance with section 414CA of the Companies Act 2006, the Company is required to provide a

non-nancial information statement. The Company has chosen to present this information throughout

the Strategic Report as follows:

• business model (pages 28 to 39);

• environmental matters, including impact of the Company’s business on the environment

(pages 38, 69 to 73, and 82 to 95);

• employees (pages 31, and 33 to 35);

• respect for human rights (pages 34 and 78); and

• anti-bribery and corruption matters (pages 33 to 37 and 78).

Included within these disclosures are details of policies, outcomes, risk factors and related key

performance indicators.

In compliance with The Companies (Strategic Report) (Climate-related Financial Disclosure)

Regulations 2022, the Company has disclosed information that covers the eight areas required under

section 414 CB of the Companies Act 2006. These disclosures form part of the Company’s TCFD

disclosures for 2023, which can be found on pages 82 to 95 of this report. Hunting has reported

against all four pillars and 11 reporting areas as required by TCFD.

Shareholder and Statutory Information continued

Hunting PLC Annual Report and Accounts 2023 247Strategic Report Corporate Governance Financial Statements Other Information

Glossary

ABC

Anti-Bribery and Corruption.

ABL

Asset Based Lending.

Adjusted*

Results for the year, as reported under IFRS,

adjusted for certain items as determined by

management, is the basis used by the Directors

in assessing performance and aids a more

effective comparison of the Group’s nancial

performance from one period to the next.

AGM

Annual General Meeting.

Basic EPS / (LPS)*

Basic earnings / (loss) per share – calculated

by dividing the earnings / (loss) attributable

to Ordinary shareholders by the weighted

average number of Ordinary shares in issue

during the year.

bbl

Barrel of crude oil – one barrel of oil equals

159 litres or 42 US gallons.

BEIS

The UK Government’s Department for Business,

Energy & Industrial Strategy.

Billion.

bopd

Barrels of Oil per Day.

Cents.

Circa.

°C

The degree Celsius is a unit commonly used

to measure temperature. The Celsius scale is

created by dening 0°C as the freezing point of

water and 100°C as the boiling point of water.

CAD

Canadian dollar.

CAGR

Compound Annual Growth Rate.

Capital employed*

See NGM J.

Capital investment – “Capex”*

See NGM N.

CCUS

Carbon Capture, Usage and Storage.

CDP

Carbon Disclosure Project.

CEO

Chief Executive Ofcer.

CFO

Chief Financial Ofcer.

CGU

Cash-generating unit.

CMD

Capital Markets Day.

CNOOC

Chinese National Offshore Oil Corporation.

CNY

Chinese Yuan Renminbi.

Carbon dioxide.

Carbon dioxide equivalent.

intensity factor

Scope 1 and 2 carbon dioxide equivalent metric,

reported as kilogrammes per $’000 of revenue.

CRA

Corrosion Resistant Alloys.

CRFD

Climate-Related Financial Disclosures.

CTR

Currency Translation Reserve.

DEFRA

The UK Government’s Department for

Environment, Food & Rural Affairs.

Diluted EPS / (LPS)*

Diluted earnings / (loss) per share – calculated by

dividing earnings / (loss) attributable to Ordinary

shareholders by the weighted average number

of Ordinary shares in issue during the year, as

adjusted to assume conversion of all dilutive

potential Ordinary shares. Dilution arises through

the potential issue of shares to satisfy awards

made under the Group’s long-term incentive

plans. When the effect of dilutive share options

and long-term incentive plans is anti-dilutive,

they are not included in the calculation of diluted

earnings / (loss) per share.

Dividend cover*

See NGM R.

DNS

Domain Name System security, this refers to the

technique of defending DNS infrastructure from

cyber attacks.

Downhole

Downhole refers to something that is located

within the wellbore.

Dividend Per Share Declared*

See NGM Q.

DTA

Deferred Tax Assets.

Hunting PLC Annual Report and Accounts 2023 248Strategic Report Corporate Governance Financial Statements Other Information

Glossary continued

E&P

Exploration and Production.

EBITDA*

See NGM C.

EBT

Employee Benet Trust.

Executive Director.

EMEA

Europe, Middle East and Africa.

EPS

Earnings Per Share.

ERP

Enterprise Resource Planning.

ESEF

European Single Electronic Format.

ESG

Environmental, Social and Governance.

ETP

Efuent Treatment Plant.

ETR

Effective Tax Rate.

EUR

Euro.

Exajoules

A unit used to measure energy. 1 exajoule is

equivalent to approximately 163.46 million barrels

of oil equivalent.

ExCo

The Hunting Executive Committee.

FCA

Financial Conduct Authority.

FCCR

Fixed Charge Cover Ratio.

FCF

Free Cash Flow.

FPSO

Floating Production, Storage and Ofoading.

FRC

Financial Reporting Council.

Free cash ow*

See NGM P.

FTSE 250

The Financial Times Stock Exchange 250 share

index is a weighted index of the 250 largest

companies by free oat market capitalisation

after the top 100.

GAAP

Generally Accepted Accounting Principles.

GBP

British pound sterling.

GHG

Greenhouse Gas.

GITC

General IT Controls.

General Manager.

GRN

Goods Received Note.

Gigawatts.

GWh

Gigawatt hour – 1 billion watt hours.

The rst half of the year, comprising the rst

and second quarter.

The second half of the year, comprising the

third and fourth quarter.

HPSP

Hunting Performance Share Plan.

Human Resources.

HRSP

Hunting Restricted Share Plan.

HSE

Health, Safety and Environment.

IAS

International Accounting Standards.

ICBC

Industrial and Commercial Bank of China.

IEA

International Energy Agency.

IFRS

International Financial Reporting Standards

as adopted by the United Kingdom.

Incident rate

An OSHA recordable incident rate (or incident

rate) is calculated by multiplying the number

of recordable incidents by 200,000 and then

dividing that number by the number of labour

hours worked.

Intensity factor

The total controlled scope 1 and scope 2

emissions divided by the total revenue of

the Group.

Internal manufacturing reject rate

Percentage of parts rejected during

manufacturing processes.

Inventory days*

See NGM F.

ISO

International Organization for Standardization.

Information Technology.

Hunting PLC Annual Report and Accounts 2023 249Strategic Report Corporate Governance Financial Statements Other Information

Joint Venture.

Thousand.

kft

Thousands of Square Feet.

KPI

Key Performance Indicator.

Kilolitre.

Kilometre.

Kyoto Protocol

International agreement between nations

to mandate country-by-country reductions

in greenhouse gas emissions.

Lean

A production practice that eliminates wasteful

processes, thereby reducing production time

and costs, and improving efciency.

LTIP

Long-Term Incentive Plan.

Million.

m

Square Metre.

M&A

Mergers and Acquisitions.

mft

Millions of Feet.

mmBtu

1 million British Thermal Units.

mmtpa

1 million Tonnes per Annum.

Megawatts.

MWD / LWD

Measurement-While-Drilling / Logging-While-

Drilling.

NCI

Non-controlling Interest.

Net Cash/(Debt)*

See NGM L.

NGM

Non-GAAP Measure – see pages 239 to 244.

NMFR

Near-Miss Frequency Rate is calculated by

multiplying the number of near-miss incidents by

200,000 and then dividing that number by the

number of labour hours worked.

NOK

Norwegian Kroner.

Non-GAAP Measure

The performance of the Group is assessed by

the Directors using a number of measures, which

are not dened under IFRS, and are therefore

considered to be non-GAAP measures

(see pages 239 to 244).

NRV

Net Realisable Value.

OCI

Other Comprehensive Income.

OCTG

Oil Country Tubular Goods – pipe and tubular

goods and products used in the oil and gas

industry, such as drill pipe, pipe casing and

production pipes.

OEM

Original Equipment Manufacturer.

OIA

Other Intangible Assets.

OOR

Organic Oil Recovery.

OSHA

The US Occupational Safety and Health

Administration.

Pence.

p.a.

Per Annum.

PBT

Prot Before Tax.

PCB

Printed Circuit Board.

PPE

Property, Plant and Equipment.

PSP

Performance Share Plan.

PSU

Performance Stock Unit.

The rst quarter of the year, comprising January,

February and March.

The second quarter of the year, comprising April,

May and June.

The third quarter of the year, comprising July,

August and September.

The fourth quarter of the year, comprising

October, November and December.

QAHSE

Quality Assurance, Health, Safety and

Environment.

QMS

Quality Management System.

Glossary continued

Hunting PLC Annual Report and Accounts 2023 250Strategic Report Corporate Governance Financial Statements Other Information

R&D

Research and Development.

Recordable incidents

An OSHA recordable incident is recorded if it

results in any of the following: death, days away

from work, restricted work or transfer to another

job, medical treatment beyond rst aid, or loss of

consciousness. Also included are any signicant

injuries or illnesses diagnosed by a physician or

other licensed health care professional, even if it

does not result in death, days away from work,

restricted work or job transfer, medical treatment

beyond rst aid, or loss of consciousness.

ROCE*

See NGM S.

RSU

Restricted Stock Unit.

S&P

Standard & Poor’s.

Sales order book

The value of all unsatised orders from

customers and is expected to be recognised

as revenue in future periods. The sales order

book represents the aggregate amount of the

transaction price allocated to partially or fully

unsatised performance obligations as dened

in IFRS 15.

SASB

Sustainability Accounting Standards Board.

Scope 1

Scope 1 emissions are direct GHG emissions

from sources that are owned or controlled by

the entity. Scope 1 emissions include fossil fuels

burned on site, emissions from vehicles and

other direct sources.

Scope 2

Scope 2 emissions are indirect GHG emissions

resulting from the generation of electricity,

heating and cooling or steam generated off site

but purchased by the entity.

Scope 3

Scope 3 emissions are all other indirect

emissions that are not produced by the company

itself and are not the result of activities from

assets owned or controlled by them, but by

those that it’s indirectly responsible for up and

down its value chain.

SDG

The United Nations Sustainable Development

Goal.

SID

Senior Independent Director.

Three-dimensional.

TCFD

Task Force on Climate-related Financial

Disclosures.

TES

Total Energy Supply.

Trillion.

Total cash and bank*

See NGM K.

Trade payables days*

See NGM H.

Trade receivables days*

See NGM G.

TSR*

Total Shareholder Return – the net share price

change plus the dividends paid during that period.

UAE

United Arab Emirates.

United Kingdom.

United States.

USD

US Dollar.

Wellbore

The wellbore refers to the drilled hole.

Well completion

Well completion refers to the processes of

preparing a well for production. This involves the

assembly of downhole tubulars and equipment

required to enable safe and efcient production

from an oil or gas well.

Well construction

Well construction refers to the initial drilling and

processes of constructing the wellbore in an oil

and gas well. These processes typically include

drilling and logging the hole; running, cementing

and logging the casing; hydraulic fracturing or

stimulating the well and monitoring well

performance and integrity.

Well intervention

Well intervention refers to any operation carried

out on an oil or gas well that maintains or

enhances the production of the well or provides

well diagnostics.

Working capital*

See NGM E.

WTI

West Texas Intermediate – the price per barrel

of Texas light sweet crude oil.

WTW

WillisTowersWatson.

XHTML

Extensible HyperText Markup Language.

ZLD

Zero Liquid Discharge.

*Non-GAAP measure.

Glossary continued

Hunting PLC Annual Report and Accounts 2023 251Strategic Report Corporate Governance Financial Statements Other Information

Professional Advisers

Solicitors

CMS Cameron McKenna Nabarro Olswang LLP

Independent Auditors

Deloitte LLP

Joint Corporate Brokers

Investec Bank plc and

RBC Capital Markets

Financial Advisers

DC Advisory Limited

Insurance Brokers

WillisTowersWatson

Pension Advisers and Actuary

Lane Clark & Peacock LLP

Financial Public Relations

Buchanan Communications Limited

Registrars and Transfer Ofce

Equiniti Limited

Aspect House

Spencer Road, Lancing

West Sussex BN99 6DA

Telephone:

+44 (0)371 384 2173

Hunting PLC Annual Report and Accounts 2023 252Strategic Report Corporate Governance Financial Statements Other Information

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Hunting PLC

30 Panton Street

London SW1Y 4AJ

United Kingdom

Tel: +44 (0)20 7321 0123

Fax: +44 (0)20 7839 2072

www.huntingplc.com

Independent reasonable assurance report to the Members of Hunting PLC on the compliance of the Electronic Format Annual Financial Report with

Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R-DTR 4.1.18R

To the Members of Hunting PLC

Report on compliance with the requirements for iXBRL  of consolidated financial statements included in the Electronic Format Annual

Financial Report

We have undertaken a reasonable assurance engagement on the iXBRL mark up of consolidated financial statements for the year ended 31

December 2023

of Hunting PLC included in the Electronic Format Annual Financial Report prepared by the company.

Opinion

In our opinion, the consolidated financial statements for the year ended 31

December 2023 of the company included in the Electronic Format Annual

Financial Report, are marked up, in all material respects, in compliance with DTR 4.1.15R-DTR 4.1.18R.

The directors responsibility for the Electronic Format Annual Financial Report prepared in compliance with DTR 4.1.15R-DTR 4.1.18R

The directors are responsible for preparing the Electronic Format Annual Financial Report. This responsibility includes:

 the selection and application of appropriate iXBRL tags using judgement where necessary;

 ensuring consistency between digitised information and the consolidated financial statements presented in human-readable format; and

 the design, implementation and maintenance of internal control relevant to the application of DTR 4.1.15R-DTR 4.1.18R.

Our independence and quality control

We have complied with the independence and other ethical requirements of Standard as applied to listed

public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We apply International Standard on Quality Monitoring (ISQM) 1 and, accordingly, maintain a comprehensive system of quality control including documented

policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Our responsibility

Our responsibility is to express an opinion on whether the iXBRL mark up of consolidated financial statements complies in all material respects with DTR

4.1.15R-DTR 4.1.18R based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with International

Standard on Assurance Engagements (UK) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE (UK) 3000)

issued by the FRC.

A reasonable assurance engagement in accordance with ISAE (UK) 3000 involves performing procedures to obtain reasonable assurance about the

compliance of the mark up of the consolidated financial statements with the DTR 4.1.15R-DTR 4.1.18R. The nature, timing and extent of procedures selected

depend on the practitioner's judgement, including the assessment of the risks of material departures from the requirements set out in DTR 4.1.15R-DTR

4.1.18R, whether due to fraud or error. Our reasonable assurance engagement consisted primarily of:

 obtaining an understanding of the iXBRL mark up process, including internal control over the mark up process relevant to the engagement;

 reconciling the marked up data with the audited consolidated financial statements of the company dated 29

February 2024;

 evaluating the appropriateness mark up of the consolidated financial statements using the iXBRL mark-up language;

 evaluating the  of iXBRL elements selected from a generally accepted taxonomy and the creation of extension

elements where no suitable element in the generally accepted taxonomy has been identified; and

 evaluating the use of anchoring in relation to the extension elements.

In this report we do not express an audit opinion, review conclusion or any other assurance conclusion on the consolidated financial statements. Our audit

opinion relating to the consolidated financial statements of the company for the year ended 31

December 2023 

Report dated 29

February 2024.

Use of our report

 (UK) 3000. Our work has been undertaken so that we might state to

the company those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by law, we do not accept

or assume responsibility to anyone other than the cor our work, this report, or for the conclusions we have

formed.

William Smith (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, UK

26 March 2024