Baker Hughes orders up 28% in Q4
US upstream services firm Baker Hughes on January 20 reported a 28% year/year jump in its Q4 orders to $6.7bn, which also marked a 24% quarter/quarter increase.
The growth came on the back of a 62% surge in orders for Baker Hughes' turbomachinery and process solutions, as well as higher demand for its oilfield services and digital solutions. This was partly offset by a dip in orders for oilfield equipment.
Baker Hughes' operating income was up 52% yr/yr at $574mn, even though revenues were flat at $5.5bn. Adjusted EBITDA was up 10% at $844mn, while free cash flow surged to $645mn, from only $250mn a year earlier.
CEO Lorenzo Simonelli said 2021 was a successful year for Baker Hughes on many fronts, pointing to achievements in the LNG and new energy markets in particular. There was a sharp rebound in oil and gas demand last year, and this spurred a recovery in upstream investment. And Simonelli said he expected the market to remain tight into 2022.
"As we look ahead to 2022, we expect the pace of global economic growth to remain strong although slightly moderate compared to 2021," he said. "We believe the broader macro recovery should translate into rising energy demand for 2022 and relatively tight supplies for oil and natural gas, providing an attractive investment environment for our customers and a strong tailwind for many of our product companies."
Simonelli added that Baker Hughes was "well-positioned" for the energy industry's near-term recovery, as well as its long-term transition path.
Baker Hughes pointed to a collaboration agreement it signed with Shell to accelerate the global energy transition as a highlight for 2021. Shell will provide select Baker Hughes sites in the US with power and renewable energy credits, as well as arrange renewable power for Baker Hughes sites in Europe and Singapore.
The two companies will also identify opportunities to accelerate each other’s paths towards net-zero emissions by 2050. Among other initiatives Baker Hughes is set to provide low-carbon solutions for Shell’s LNG fleet through technology upgrades and compressor re-bundles.