HMH Prepares for 2027 Rig Recovery Despite Order Delays

HMH Prepares for 2027 Rig Recovery Despite Order Delays

HMH is buying materials ahead of equipment orders as it anticipates a deepwater recovery, while Middle East weakness weighs on orders and cash flow.

HMH Holding expects activity across its key floating rigs to rise 10% to 25% in 2027 despite equipment-order delays and a projected $50 million to $60 million hit to 2026 orders from weaker Middle East activity.

HMH Holding Inc. (HMH) is committing cash and preserving production capacity for an offshore recovery that has yet to translate fully into equipment orders. The drilling-equipment supplier expects activity across its key floating rigs to increase approximately 10% to 25% in 2027, even as delayed projects and Middle East weakness weigh on current business.

Third-quarter orders totaled $191 million against revenue of $171 million, producing a book-to-bill ratio of 1.1x, meaning orders exceeded sales. Adjusted EBITDA, an earnings measure excluding interest, taxes, depreciation, amortization and certain adjustments, was $38 million. Management detailed the results and outlook on its earnings call, according to the Motley Fool transcript.

Preparing for orders puts pressure on c...