Baker Hughes revenues jump on LNG demand and IET orders

US oilfield technology major Baker Hughes posted a higher than expected profit for its fourth quarter, with revenue from its industrial and energy technology (IET) segment jumping 24% to $2.88 billion.

The quarterly and annual results announced by Baker Hughes were buoyed by increasing demand for its services and equipment from LNG producers.

On an adjusted basis, the company posted net income of 51 cents per share for the quarter ended December 31, compared with the average analysts' estimate of 48 cents, according to LSEG data sourced by Reuters.

Adjusted EBITDA

In the fourth quarter, adjusted EBITDA for Baker Hughes stood above the mid-point of the company’s guidance range due to continued operational improvement and full realisation of the $150 million of cost-out, Baker Hughes said.

“As we continue our journey, 2023 proved to be a pivotal year for Baker Hughes. We successfully removed $150 million of costs, realigned our Industrial & Energy Technology (IET) segment, and recently launched actions to further streamline our Oilfield Services & Equipment segment (OFSE),” Lorenzo Simonelli, Baker Hughes Chairman and Chief Executive Officer, said.

“Our strategy to transform the way we operate is working. In 2023, our adjusted EBITDA was up double digits for the third consecutive year and exceeded prior cycle's peak levels by 25%,” he added.

IET orders remained particularly strong for the company, exceeding $3 billion for the fifth consecutive quarter. Additionally, Baker Hughes was awarded more than $1 billion of contractual service agreements (CSA), while it booked the previously announced 9.6 MTPA Ruwais Liquefied Natural Gas (LNG) project in the UAE.

“In OFSE, we continue to demonstrate solid margin improvement, with segment EBITDA margin increasing to 17.9% and Oilfield Services EBITDA margins now exceeding 20% – both record margins. In new energy, orders of $169 million in the fourth quarter brought the full-year total to $750 million,” Simonelli said.

“As you can see from our strong 2023 results, Baker Hughes is on its way to becoming a leaner and more efficient energy technology company. We continue to carefully execute our plan to drive margins meaningfully higher,” he added.

Industrial solutions

The company’s Industrial Solutions product line in IET expanded the reach of its Cordant digital solutions and reached a multi-year contract deal with Shell to centralise asset condition and performance monitoring across 33 sites.

India's Oil and Natural Gas Corporation Limited (ONGC) awarded IET a multi-year contract for asset health software and services, pursuant to which Baker Hughes will implement asset health software across 12 offshore platforms and build a center of excellence in ONGC's Mumbai headquarters, the company said.