- H&P announces its fiscal 2024 Supplemental Shareholder
Return Plan, which is currently projected to provide approximately
$168 million to shareholders, comprised of established base
dividends as well as supplemental dividends
- 2024 Supplemental Shareholder Return Plan is comprised of a
projected $100 million established base dividend, a planned $68
million supplemental dividend and approximately $68 million of
unallocated cash, which combined with roughly $350 million of cash
on hand provides ample flexibility
- H&P expects its capital expenditures for fiscal year 2024
to range between $450 and $500 million
- Approximately 60% of planned expenditures are earmarked for our
North America Solutions segment to fund maintenance capex and
convert rigs to walking configuration; approximately 33% of planned
expenditures are allotted towards international growth including
plans to modify and convert rigs to walking configuration for
international export; the remaining planned spend is primarily
allocated to general corporate and information technology
expenditures
- On October 17, 2023, the Board of Directors of the Company
declared a quarterly cash supplemental dividend of $0.17 per share,
payable on December 4, 2023, to stockholders of record at the close
of business on November 20, 2023. The payable date and record date
of this supplemental dividend coincide with the dates applicable to
the Company’s base dividend of $0.25 per share, which was declared
on September 6, 2023.
Helmerich & Payne, Inc. (“H&P” or the “Company”) (NYSE:
HP) today announced its planned capital expenditures and
supplemental shareholder return plan for fiscal year 2024. The
Company also announced the timing of the upcoming conference call
and webcast for its fiscal fourth quarter of 2023.
President and CEO John Lindsay commented, “I am pleased with the
execution of our 2023 supplemental shareholder return plan,
utilizing it to not only maintain a competitive dividend yield, but
also to take advantage of what we viewed as dislocations in stock
prices to opportunistically repurchase shares. A key element in the
plan’s design was flexibility, which we believe is necessary to
return capital more efficiently to shareholders in a cyclical
business such as ours. Our 2024 supplemental shareholder return
plan will retain many of these characteristics, including the
flexibility to further invest in the business, supplement
additional dividend returns, and/or repurchase shares if and when
those opportunities arise.
“The Company’s annual supplemental shareholder return plans
serve to augment our long-standing commitment to returning cash to
shareholders. In fiscal 2024, our current base dividend of
$1.00/share per annum will continue to serve as a foundation of
that cash return commitment. The supplemental dividend for fiscal
2024, which we anticipate will be approximately $68 million in the
aggregate, is intended to further enhance shareholder returns. The
Company’s annual supplemental shareholder return plan is a
fundamental component of our overall capital allocation strategy.
Accordingly, the planned supplemental dividend for fiscal 2024 is
lower than fiscal 2023 as we balance, among other things, the
outlook for this fiscal year’s activity levels, which are more
subdued than last year’s at this time, and our continued efforts to
expand internationally, including the related capital required to
do so. We continue to recognize that our international strategy is
a long-term diversification and growth commitment, and capital
devoted to its expansion will take multiple years to fully develop
and generate returns for the Company.”
2024 Supplemental Shareholder Return Plan:
The Company has established its 2024 supplemental shareholder
return plan, which is currently projected to provide approximately
$68 million in additional cash returns to shareholders in the form
of additional dividends. These supplemental dividends are expected
to be paid in four, approximately equal, installments during fiscal
2024. These additional cash returns represent approximately 50% of
the Company’s projected cash flow generation in fiscal 2024 after
planned capital expenditures and after the Company’s already
established “base” annual dividend of $1.00/share, which is roughly
$100 million on an annualized basis. All such established base and
supplemental dividends are subject to the determination and
approval of the Company’s Board of Directors on a quarterly
basis.
Under the plan, the Company may utilize remaining cash flow
projected to be generated in fiscal year 2024, after planned
capital expenditures, established base and supplemental dividends,
as well as cash on hand, to fund additional supplemental dividends
or to opportunistically repurchase shares of its common stock under
its evergreen four million shares per calendar year annual
repurchase authorization. The Company currently has approximately
1.3 million shares remaining under its calendar 2023
authorizations. Such repurchases will be dependent upon several
factors, including market and industry conditions and other
investment opportunities available to the Company.
The 2024 supplemental shareholder return plan is specific to
fiscal year 2024 and is derived from current forecasts and
projections for fiscal year 2024, which are subject to change based
on industry factors and market conditions. Our intention is to
refresh the plan in subsequent fiscal years with adjustments made
based on relevant factors and market conditions at that time,
including the Company’s projected cash flow generation, and
accretive investment opportunities.
On October 17, 2023, the Board of Directors of the Company
declared a quarterly cash supplemental dividend of $0.17 per share,
payable on December 4, 2023, to stockholders of record at the close
of business on November 20, 2023. The payable date and record date
of this supplemental dividend coincide with the dates applicable to
the Company’s base dividend of $0.25 per share, which was declared
on September 6, 2023.
Planned Capital Expenditures for Fiscal Year 2024:
Capital expenditures for fiscal year 2024 are expected to range
between $450 and $500 million, reflecting our commitment to
investments to support international expansion, walking rig
conversions and to complete capital spending deferments that were
made during the years impacted by the pandemic. H&P’s North
America Solutions segment accounts for approximately 60% of the
expected spend as the Company plans to convert some additional rigs
to walking configurations and as maintenance capex per rig pushes
slightly above the previous $1.1 to $1.3 million per active rig
range. The Company’s International Solutions and Offshore Gulf of
Mexico segments account for roughly 33% of the planned expenditures
in fiscal 2024 as the Company continues to fund its international
growth. Specifically, plans include converting additional
super-spec rigs domiciled in the U.S. to walking configurations, as
well as making other modifications to them, in preparation for
international export and upgrading 3 rigs in Argentina to
super-spec. Included in the anticipated spend for the North
American Solutions and International Solutions segments are amounts
allocated to convert up to 14 super-spec rigs located in the U.S.
to walking configurations. Furthermore, a portion of those rigs are
slated for further modifications and international export. The
remainder of the planned spend for fiscal 2024 is slated for
corporate and information technology purposes as the Company
continues to invest in and modernize its own operational and
business-driven technologies.
Senior Vice President and CFO Mark Smith also commented, “We
believe our 2023 supplemental shareholder return plan was a
success. During fiscal 2023 we returned approximately $450 million
of capital to shareholders, which represents over 10% of our
current market cap. These returns were in the form of approximately
$104 million in base dividends, roughly $98 million in supplemental
dividends, and approximately $249 million in share repurchases,
which represented roughly 6% of the shares outstanding.
“The Company’s annual supplemental shareholder return plan is an
integral part of our overall capital allocation strategy serving as
a complement to our annual capital expenditure program. The 2024
supplemental shareholder return plan retains the flexibility that
we believe is required to appropriately allocate capital to
on-going operations, take advantage of growth opportunities and
provide shareholder returns. To that end, during fiscal 2024 the
Company expects to deploy approximately $640 million in capital -
$450 million to $500 million in capex plus approximately $168
million of expected cash returns to shareholders. Another $68
million of expected fiscal 2024 cash flow generation, which is
currently unallocated, coupled with our cash on hand at September
30, 2023 of approximately $350 million, provides the Company
further opportunistic flexibility. This flexibility can be used for
variety of other investments and/or capital allocations, including
allocation of approximately an additional $50 million towards
purchase orders for long-lead items for rig-related capex expected
to be incurred in fiscal 2025.
“In our North America Solutions segment, we anticipate fiscal
2024 maintenance capex per rig will be slightly above the fiscal
2023 range as lower levels of planned tubular purchases are offset
by plans to complete capital spending deferments from prior years.
Capital expenditures for our International Solutions segment are
expected to remain a meaningful part of overall capex. The
projected spend here again coincides with international markets
increasing focus on unconventional drilling, which has even
accelerated since our last earnings call in late July, leading us
to allocate more capital here to take advantage of the developing
opportunities. Additionally, as part of our overall capital
expenditure program in fiscal 2024, we expect to complete up to 14
walking rig conversions in the U.S. Approximately half of these
conversions will be utilized domestically as long as customer
demand for our walking rig configuration persists at reasonable
rates of return. The remainder of these conversions are intended to
receive further modifications and are earmarked for potential
international export.
“Despite market volatility in fiscal 2023, we were able to
execute on the 2023 supplemental shareholder return plan as
originally anticipated. That said, each new year comes with new
expectations and the 2024 supplemental shareholder return plan
represents our current intention of returning capital to
shareholders during fiscal 2024 based upon our outlook of market
and industry conditions at present, including our current
expectations surrounding rig pricing, activity levels, margins,
cash generation, capital expenditures and other investment
opportunities. In determining whether to proceed with the 2024
supplemental shareholder return plan as originally intended and any
future supplemental shareholder return plans in later fiscal years,
management and our board of directors will continue to review the
Company’s financial position and performance together with relative
market conditions at that time.”
Investor slides for October 2023 are available for download on
the Company’s website, within Investors, under Presentations.
Fiscal Fourth Quarter 2023 Conference Call and
Webcast:
The Company’s financial guidance for the fiscal fourth quarter
of 2023 and full fiscal year 2023 are consistent, except as noted,
with those provided in the Company’s press release dated July 26,
2023. Those items are enumerated below:
Fiscal Fourth Quarter 2023:
- North America Solutions direct margins(1) are still expected to
be between $230-$260 million
- North America Solutions active rig count was 147 rigs as of
September 30, 2023
- International Solutions direct margins(1) are now expected to
be between $4-$6 million, exclusive of any foreign exchange gains
or losses, as we pulled forward some spending related to
recommissioning rigs earmarked for export and due to additional
expat expenses
- Offshore Gulf of Mexico direct margins(1) are still expected to
be between $6-$8 million
Fiscal Year 2023:
- Gross capital expenditures are still expected to be
approximately $400 million
- Depreciation and amortization expenses are still expected to be
approximately $385 million
- Research and development expenses are still expected to be
roughly $30 million
- Selling, general and administrative expenses are still expected
to be approximately $205 million
The financial guidance set forth above does not represent a
comprehensive statement of operational results or financial
position for or as of the fiscal quarter and fiscal year ended
September 30, 2023. The final comprehensive statements of
operational results and financial position for and as of the fiscal
quarter and fiscal year ended September 30, 2023, will be contained
in our Annual Report on Form 10-K. Our final operational results
and audited financial statements may vary from the financial
guidance described above as our quarterly and yearly financial
statement close processes are not yet complete and additional
developments and adjustments may arise between now and the time the
financial information and operational results for these periods are
finalized. In addition, the financial guidance is not necessarily
indicative of the results to be achieved for any future period.
The Company’s fiscal fourth quarter 2023 conference call will
take place on Thursday, November 9, 2023, at 11:00 a.m. (ET) with
John Lindsay, President and CEO, Mark Smith, Senior Vice President
and CFO, and Dave Wilson, Vice President of Investor Relations.
Investors may listen to the conference call either by phone or
audio webcast.
What:
Helmerich & Payne, Inc.’s Fiscal
Fourth Quarter 2023 Earnings Release. Other material developments
may also be discussed.
When:
11:00 a.m. ET (10:00 a.m. CT), Thursday,
November 9, 2023
Via Phone:
Domestic: 800-895-3361 Access Code:
Helmerich
International: 785-424-1062 Access Code:
Helmerich
Via Internet:
Visit http://www.helmerichpayne.com then
click on “Investors” and then click on “News & Events – Event
& Presentations” to find the link to the webcast.
Questions:
Dave Wilson, investor.relations@hpinc.com,
918-588-5190
If you are unable to listen during the live webcast, the call
will be archived for 365 days on Helmerich & Payne, Inc.’s
website, http://www.helmerichpayne.com, under “News & Events –
Event & Presentations”, which can be accessed through the
“Investors” section of the website.
About Helmerich & Payne, Inc.
Founded in 1920, Helmerich & Payne, Inc. is committed to
delivering industry leading drilling productivity and reliability.
H&P operates with the highest level of integrity, safety and
innovation to deliver superior results for our customers and
returns for shareholders. Through its subsidiaries, the Company
designs, fabricates and operates high-performance drilling rigs in
conventional and unconventional plays around the world. H&P
also develops and implements advanced automation, directional
drilling and survey management technologies. For more information,
visit www.helmerichpayne.com.
Forward Looking Statements
This release includes “forward-looking statements” within the
meaning of the Securities Act of 1933 and the Securities Exchange
Act of 1934, and such statements are based on current expectations
and assumptions that are subject to risks and uncertainties. All
statements other than statements of historical facts included in
this release, including, without limitation, statements regarding
the registrant’s business strategy, future financial position,
operations outlook, future cash flow, future use of generated cash
flow, dividend amounts and timing, supplemental shareholder return
plans and amounts of any future dividends, future share
repurchases, investments, active rig count projections, budgets,
projected costs and plans, objectives of management for future
operations, contract terms, financing and funding, capex spending,
outlook for domestic and international markets, and actions by
customers are forward-looking statements. For information regarding
risks and uncertainties associated with the Company’s business,
please refer to the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
and other disclosure in the Company’s SEC filings, including but
not limited to its annual report on Form 10‑K and quarterly reports
on Form 10‑Q. As a result of these factors, Helmerich & Payne,
Inc.’s actual results may differ materially from those indicated or
implied by such forward-looking statements. Investors are cautioned
not to put undue reliance on such statements. We undertake no duty
to publicly update or revise any forward-looking statements,
whether as a result of new information changes in internal
estimates, expectations or otherwise, except as required under
applicable securities laws.
Helmerich & Payne uses its website as a channel of
distribution for material company information. Such information is
routinely posted and accessible on its investor relations website
at www.helmerichpayne.com. Information on our website is not part
of this release.
__________________________________________________________________________________
(1) Direct margin, which is considered a non-GAAP metric, is
defined as operating revenues less direct operating expenses and is
included as a supplemental disclosure. We believe it is useful in
assessing and understanding our current operational performance,
especially in making comparisons over time. Expected direct margin
for the fourth quarter of fiscal 2023 is provided on a non-GAAP
basis only because certain information necessary to calculate the
most comparable GAAP measure is unavailable due to the uncertainty
and inherent difficulty of predicting the occurrence and the
financial statement impact of certain items based on preliminary
results. Therefore, as a result of the uncertainty and variability
of the nature and amount of adjustments, which could be
significant, we are unable to provide a reconciliation of expected
direct margin to the most comparable GAAP measure without
unreasonable effort.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231018585147/en/
Dave Wilson Vice President of Investor Relations
investor.relations@hpinc.com 918-588-5190
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