Baker Hughes optimistic despite Q1 drop in revenue
US-based upstream services group Baker Hughes said April 21 it was optimistic about the market recovery after taking a hit on revenue both quarter on quarter and year on year in the first quarter.
Baker Hughes reported total revenue for Q1 at $4.8bn, down 13% from Q4 and 18% lower yr/yr. Free cash flow, however, improved month-on-month, to $498mn from $250mn.
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On the quarter, the company reported a net loss of $452mn, down from Q4 2020 net earnings of $653mn but an improvement over the Q1 2020 net loss of $10.3bn, when it took a Covid-related goodwill non-cash impairment of $15bn. Operating income fell to $164mn from $182mn month-on-month, while adjusted Ebitda declined to $562mn from $770mn in Q4 2020.
Despite the drop in revenue, CEO Lorenzo Simonelli said he was nevertheless cautiously optimistic about the recovery from the COVID-19 pandemic and subsequent return to economic growth.
“We expect spending and activity levels to gain momentum through the year as the macro environment improves, likely setting up the industry for stronger growth in 2022,” he said.
In its much-watched weekly rig count report, Baker Hughes has reported small but consistent gains in the US market, though Canadian activity remains suppressed by spring restrictions.
Elsewhere, Baker Hughes has been active in the energy transition. In March, the company signed an exclusive agreement with SRI International to use salt solutions to facilitate carbon capture and storage (CCS). Salt solutions from potassium and ammonia can reduce, among other things, total emissions and water usage.
That same month, it signed a memorandum of understanding with Norway’s Horisont Energi on developing an offshore CO2 storage facility in the Norwegian waters of the Barents Sea.