Hunting PLC H1 2018 Trading Update (8104S)
28 June 2018 - 4:00PM
UK Regulatory
TIDMHTG
RNS Number : 8104S
Hunting PLC
28 June 2018
For Immediate Release 28 June 2018
Hunting PLC
("Hunting" or "the Company" or "the Group")
H1 2018 Trading Update
Hunting PLC (LSE:HTG), the international energy services group,
today issues a pre-close trading update, ahead of its Half Year
Results to be issued on Thursday 30 August 2018.
The Group's performance during the period has continued to
reflect strong activity levels within US onshore completions,
improving sentiment in the US offshore market and localised
regional improvements in the Asia Pacific and Middle East markets.
Activity levels in Europe and Canada remain challenging as lower
drilling activity continues to impact these markets.
Based on these regional trends, Hunting Titan has delivered a
performance ahead of management's expectations and the Group's US
segment has returned to operating profitability, while Hunting's
other segments have delivered an operating loss in the period.
Within Hunting Titan, the segment reports a strong increase in
sales across all product lines, driven in part from higher
completion activities and greater frac intensity. This increase is
supported by the further commercialisation of Hunting Titan's
proprietary perforating technologies including the H-1 System and
EQUAfrac(TM) shaped charge, which offer greater reliability,
reduced rig time and higher margins of safety. The Permian Basin
remains the largest contributor to Titan's sales, however, other
basins have also reported good increases in activity as the stable
oil price environment supports new drilling activity in the onshore
US market. The manufacture of perforating systems in the Group's
facilities in Canada, Mexico and China has also increased in the
period.
In the US, the Group's Premium Connections, Drilling Tools,
Advanced Manufacturing and Speciality business units have reported
improved sales compared to 2017, predominantly supported by US
onshore drilling activity. Hunting Electronics has performed
strongly during the period as clients increase investment in new
capital equipment, in addition to the business supporting Hunting
Titan in the manufacture of perforating switches. Of note has been
the improved performance of the segment's Manufacturing and
Accessories business which is nearing a breakeven position, as
activity in the US offshore and international markets slowly
improves. Hunting Subsea remains subdued, given the low investment
levels particularly within the US offshore/deep water markets.
In Canada, while drilling activity levels remain low due to
local oil pricing and distribution bottlenecks, the business has
benefited from the increased production of perforating guns for
Hunting Titan. In Europe, while drilling activity in the UK North
Sea remains subdued, the business has retained a number of key
supply contracts. Further, the Group's well intervention unit has
returned to profit during Q2 2018, supported by the introduction of
new technologies and products. Due to continuing losses within the
Group's Kenya operation, management has decided to close its
facility in Mombasa - the cost of closure is forecast to be
absorbed within surplus provisions held over from the Cape Town
facility closure announced in 2017.
In the Middle East, well intervention contracts in Northern Iraq
have contributed to increased sales, while Hunting's joint venture
in Saudi Arabia also reports a modest increase in order intake from
key partners in the country.
Hunting's Asia Pacific business has reported increased orders
for OCTG for the domestic market in China and has also increased
production of perforating guns for Hunting Titan. Activity in
Singapore and Indonesia remains quiet as international operators
limit new drilling activity.
The Group's balance sheet remains strong with a net cash balance
in excess of $30m expected at 30 June 2018 - this includes $8m of
proceeds from the sale of the Group's Cape Town facility in May.
Working capital has absorbed cash during the period, as expected,
given the increased activity levels, and inventory is expected to
be approximately $325m at 30 June 2018 compared to $286m at 31
December 2017. Capital investment has remained modest with
approximately $11m incurred up to the end of June 2018.
Given current market conditions, and the outlook for the
remainder of the year, management continue to take a cautious view
on the rate of recovery in the wider market in H2 2018, but
currently remain comfortable with the market consensus for the 2018
full year outturn.
For further information please contact:
Hunting PLC Tel: +44 (0) 20 7321 0123
Jim Johnson, Chief Executive
Peter Rose, Finance Director
Tarryn Riley, Investor Relations
Buchanan Tel: +44 (0) 20 7466 5000
Ben Romney
Chris Judd
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 seven segments: Hunting
Titan, US, Canada, Europe, Asia Pacific, Middle East/Africa/Other
and Exploration and Production.
Hunting PLC's Legal Entity Identifier is
2138008S5FL78ITZRN66.
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END
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