US energy services and technology heavyweight Baker Hughes in the fourth quarter 2023 achieved adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.091 billion, the first time in the company’s history it has busted the $1 billion mark.

Net income attributable to the company for the fourth quarter of 2023 was $439 million, up $257 million year-on-year, while quarterly cash flows from operating activities were $932 million and free cash flow was $633 million.

Another highlight was the company’s Industrial & Energy Technology (IET) segment’s winning orders totalling $3.03 billion in the three months ended 31 December 2023, the fifth the fifth consecutive quarter above $3 billion.

Also, the Oilfield Services & Equipment segment (OFSE) business segment in the 2023 fourth quarter secured two significant, multi-year integrated solutions contracts in Latin America for drilling, completions and plug and abandonment services — one for offshore exploration and one for onshore development.

Baker Hughes commented these awards reflect confidence in its solutions, contributing to the company’s strategy of strengthening its core by increasing market penetration.

Meanwhile, SBM Offshore awarded Baker Hughes a contract to provide turbogenerators, turbo-compressors, electric motor-driven compressors, as well as commissioning spare parts, for a floating production, storage and offloading vessel.

“During the fourth quarter, adjusted EBITDA came in above the mid-point of our guidance range due to continued operational improvement and full realisation of the $150 million of cost-out,” said Baker Hughes chief executive Lorenzo Simonelli.

“IET orders remained strong, exceeding $3 billion for the fifth consecutive quarter. Additionally, we were awarded more than $1 billion of contractual service agreements, while we booked the previously announced 9.6 million tonnes per annum Ruwais liquefied natural gas project in the United Arab Emirates,” he added.

However, Baker Hughes’ Oilfield Services & Equipment (OFSE) segment orders of $3.874 billion for the fourth quarter decreased by $304 million sequentially; and Subsea & Surface Pressure Systems (SSPS) orders were $654 million, down 35% sequentially, and down 11% year-over-year.

The contractor’s North America revenue for the fourth quarter of 2023 was $1.018 billion, down 4% sequentially, while international revenues totalled $2.938 billion, an increase of 2% sequentially, driven by volume growth in all regions.

“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,” added Simonelli.

For the full year, Baker Hughes’ IET sector won orders totalling $14.18 billion, 12% higher than 2022’s previous record high.

The 2023 net income attributable to the company was $1.943 billion, up $2.544 billion from the previous year; while adjusted EBITDA stood at $3.76 billion, a 26% increase year-over-year.

Baker Hughes on Tuesday said that full-year 2023 cash flows from operating activities were $3.06 billion and free cash flow stood at $2.05 billion, “a 54% conversion rate from adjusted EBITDA”.

For 2023, the company reported GAAP diluted earnings per share (EPS) of $1.91 and adjusted diluted EPS of $1.60, a 76% increase over 2022.

“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,” added Simonelli.

Pivotal year

“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).

“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%. I would like to thank our employees for their hard work and commitment to achieve our goals, delivering for our customers and pushing the company forward,” he concluded.