Trading Update

RNS Number : 0481X

Hunting PLC

17 December 2019

 

For Immediate Release

17 December 2019

Hunting PLC

("Hunting" or "the Company" or "the Group")

Trading Update

Hunting PLC (LSE:HTG), the international energy services group, today provides a year-end Trading Update ahead of announcing its 2019 Full Year Results on Thursday 27 February 2020.

As anticipated, activity levels within the North American oil and gas industry continue to slow, with the pace of decline increasing particularly within the US onshore market. Capital budget exhaustion within Hunting's client base together with seasonal declines are impacting our Q4 2019 results and certain clients have closed facilities serving the US onshore sector due to the slowing market. These market dynamics continue to adversely impact the results of Hunting's US onshore focused businesses including the Hunting Titan, Specialty and Drilling Tools business units. Elsewhere across the Group, offshore and international market activity is showing modest improvement, which has supported the performance of Hunting's businesses outside of the North American region.

At this time, the Board anticipate a full year EBITDA result remaining in the range of current market expectations, however, this remains dependent on results for the month of December 2019. The Group continues to trade profitably and generate cash and given the strong capital discipline implemented throughout the year, the Board also anticipates a year-end cash position, before lease liabilities, in the region of $110 million. Lease liabilities are expected to be around $45 million at the year-end to give a net cash position of $65 million.

As anticipated, Hunting Titan's revenue and operating profits during October and November were below the average monthly run-rate of Q3 2019 due to the slowing US onshore market. New products and technologies continue to be developed and commercialised, however, the market remains highly competitive and continues to decline in line with activity levels and rig counts.

US segment revenues remain stable as offshore and international market demand slowly returns to growth. As highlighted previously, our Advanced Manufacturing Group, and in particular the Hunting Electronics business, is reporting good results including a higher contribution of sales from non oil and gas markets. Further, the Group's Subsea business continues to report improving results as international offshore projects continue to accelerate, with opportunities within the recently acquired RTI also emerging.

Within the Canada segment, while activity is lower, the performance of the business is benefiting from the lower cost base, following management actions in Q2 2019. In EMEA and Asia Pacific, while both segments are trading ahead of management expectations due to the improving international drilling market, some signs of market softening have been observed, as international trade tensions continue to dampen market sentiment.

Capital spend for the full year is expected to be circa.$40.0m, with inventory likely to be at a similar level as at 31 December 2018.

Commentary on the Group's trading outlook for 2020 will be provided within the 2019 Full Year Results when published in February 2020. However, at this time early announcements from Hunting's publicly quoted clients indicate that capital spend in the year ahead will be lower than 2019, as the oil and gas industry endeavours to improve returns and increase cash generation for investors.

For further information please contact:

Hunting PLC Jim Johnson, Chief Executive Peter Rose, Finance Director Tarryn Riley, Investor Relations	Tel: [phone]
Buchanan Ben Romney Chris Judd	Tel: [phone]

Notes to Editors:

About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.

The Group reports in US dollars across five segments: Hunting Titan, US, Canada, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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