Hilong (1623) H2 2025 earnings summary

Executive summary

• Revenue increased by 4.4% year-over-year to RMB4,875.2 million, driven by growth in oilfield services and offshore engineering, despite a sharp decline in oilfield equipment manufacturing revenue.

• Gross profit rose 6.9% to RMB1,198.9 million, with gross margin improving to 24.6%.

• The year ended with a net loss of RMB320.0 million, reversing a profit of RMB30.1 million in 2024, mainly due to a significant impairment loss on a vessel and increased administrative expenses.

• No dividend was recommended for the year.

Financial highlights

• Oilfield equipment manufacturing revenue dropped 37.6% to RMB1,325.1 million, mainly from lower international drill pipe sales and prices.

• Oilfield services revenue increased 32.3% to RMB2,090.3 million, led by tubing/casing trading and integrated drilling services.

• Offshore engineering services revenue surged 51.5% to RMB1,459.8 million, with strong project execution and new contracts.

• Administrative expenses rose 32.5% to RMB730.4 million, mainly from higher staff costs.

• Impairment loss of RMB322 million recognized on a vessel, classified as held for sale.

• Finance costs (net) decreased 35.4% to RMB165.2 million due to lower borrowings and favorable FX movements.

• Effective tax rate was -91.4% in 2025, reflecting unbalanced profit distribution and increased tax losses.

Outlook and guidance

• Focus on high-tech development, international expansion, and intelligent transformation across all segments.

• Plans to grow high-end customer base in the US, Middle East, Southeast Asia, and South America.

• Continued R&D in high-strength, sulfur-resistant drill pipes and digital transformation initiatives.

• Oilfield services to expand turnkey and environmental protection businesses, with emphasis on technology-driven growth.

• Offshore engineering to pursue new projects, enhance digital delivery, and strengthen market presence in Southeast Asia and West Africa.