Trading Update

RNS Number : 5576Z

Hunting PLC

18 December 2017

 

For Immediate Release

18 December 2017

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 2017 Full Year Results on Thursday 1 March 2018.

As anticipated in the Trading Update dated 24 October 2017, revenue for the full year is expected to be around the $700 million mark, with results strongly weighted to the second half of the year. EBITDA is likely to be nearer the upper end of market expectations, given the strong performance of Hunting Titan during the second half of the year. Management continue to anticipate a modest pre-tax profit for the Full Year - this before charges for intangible asset amortisation and any exceptional items. There are currently no exceptional items recorded in the year to date financials. Cash generation remains strong and a positive net cash position continues to be forecast for the year-end. Capital investment remains tightly controlled with spend in the full year expected to be around $12 million.

Trading within Hunting Titan, the Group's Perforating Systems business, strengthened throughout the year with momentum continuing up to the year-end holiday period benefitting from a strong take-up of the business's proprietary H-1 Perforating System. The H-1 system continues to gain market share due to its reliability, with an increasing number of operators mandating its use in the onshore US shale basins.

The Group's US operations, excluding Hunting Titan, are expected to report an overall operating loss for the year, however, good progress has been made with both cost cutting initiatives and improving sales into the US onshore market as activity increased throughout the year. The Electronics, Trenchless, Premium Connections and Specialty businesses, which sell into the US shale regions, are all likely to report operating profits for the year as a whole. Hunting's offshore focussed businesses, including the US Manufacturing and Subsea businesses, continue to face challenging market conditions and their performance offsets the region's profitable businesses.

Hunting's other regional operations, including Canada, Europe, Middle East and Asia Pacific, which primarily focus on offshore and higher cost drilling markets, remain loss making at the operating level. Our operations in Africa also remain loss making and continue to face particularly challenging market conditions.

Given the improved trading results and continued strengthening of the Balance Sheet, the Group has started the process of cancelling the "suspension period" bank covenants over its core borrowing facilities and re-installing the facility's original net debt to EBITDA and interest cover covenants. As a result, the Company's interest cost and facility commitment fee will reduce and any restrictions over capital spend will be removed. Further, restrictions over dividend payments will also be lifted, which will allow for distributions to resume at an appropriate time. There is currently no intention to propose a dividend for the year ended 31 December 2017. The process of reverting to the original covenants is expected to complete by the time the Company announces its Full Year Results in March 2018. Further details will be provided within the 2017 Annual Report.

Commenting on today's Trading Update, Jim Johnson, Hunting's Chief Executive, said:

"Hunting Titan's performance in the year continued to exceed management expectations, and has underpinned the Group's results in 2017. The Group's other businesses now operate at close to break-even at the EBITDA level given the cost cutting initiatives and working capital management implemented in the year. As we close 2017, Hunting has retained its operational capabilities and remains well positioned to capitalise on any improvement in global market conditions."

For further information please contact:

Hunting PLC Jim Johnson, Chief Executive Peter Rose, Finance Director Tarryn Riley, Investor Relations	Tel: [phone]
Buchanan Richard Darby 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, Kenya, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, South Africa, United Arab Emirates and the United States of America.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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