TIDMHTG
RNS Number : 2461D
Hunting PLC
27 October 2020
For Immediate Release 27 October 2020
Hunting PLC
("Hunting" or "the Company" or "the Group")
Q3 2020 Trading Update
Hunting PLC (LSE : HTG), the international energy services
group, today issues a Q3 2020 trading update.
Jim Johnson, Chief Executive of Hunting, commented:
"In the most challenging environment ever faced in our industry
decisive actions to resize the Group have been successful leading
to a broadly break-even EBITDA result, a continued strengthening of
our balance sheet, and an ongoing commitment to deliver industry
leading service and technology to our customers.
"Third quarter results reflect the low levels of activity caused
by the impact of COVID-19 on global energy demand. Clients have
continued to curtail drilling and completion activity in the
period. However, we believe that in certain sub-sectors of the
market, including areas of the US onshore market, activity levels
have now stabilised. Our recent acquisitions have increased the
Group's position within the more active subsea sector and are
already yielding benefits. Monthly revenue has increased within the
Hunting Titan and Asia Pacific segments during the quarter,
however, this has been offset by declines in revenue within the US
and EMEA segments. Improving sales into international markets by
Hunting Titan have continued to expand Hunting's geographic
footprint which partially offsets the performance of our North
American business. Given the prevailing levels of activity,
management believe that the revenue run rate for Q4 may be slightly
lower than Q3 due to the usual seasonal slowdown.
"Our efforts to resize the Group in response to prevailing
market conditions have resulted in annualised cash savings
totalling c.$74m, with the global workforce reducing by c.30% from
the 2019 year-end.
"Our strong balance sheet and improved net cash position also
allows the Group optionality to explore further bolt-on acquisition
opportunities. The growth of our subsea segment over the past 14
months demonstrates the success and rationale of this strategy.
"Client activity should improve during 2021, but a sustained
recovery in the market will be a function of the decline in COVID
19 driving positive global economic activity. The effects of the
pandemic continue to depress demand and weigh heavily on oil price
sentiment."
Trading Update
In the year to date, Group EBITDA has been c.$28m, with Q3 2020
EBITDA showing a broadly break-even result. The Group continues to
report a strong cash position of c.$69m, before lease liabilities,
as at 30 September 2020, as working capital improvements continue
to generate cash.
On 23 October 2020, $3.3m was absorbed following payment of the
second interim dividend in 2020, which totalled 2.0 cents per
share.
Inventory levels at the end of the quarter were c.$315m,
reflecting a reduction from the 2019 year-end position. Capital
investment continues to be low compared to the prior period, with
year-to-date expenditure totalling c.$13m.
Hunting Titan's trading results have improved during Q3 2020,
with revenue increasing sequentially throughout the quarter and the
segment reporting a positive EBITDA in September. Some stability
within the US onshore market has been reported, including a slowly
increasing US rig count. Hunting Titan has made good inroads into
international markets during the reporting period, with increasing
sales into the Middle East and Asia Pacific, in particular China,
where US-style hydraulic fracturing procedures continue to gain
traction.
Hunting's US businesses have reported positive EBITDA in the
quarter despite the decline in revenue noted above, with the
segment's Premium Connections and Subsea businesses reporting
modest activity levels and profits. Oil and gas equipment sales
have declined within the Advanced Manufacturing Group, however,
non-oil and gas opportunities have seen good stability, with
medical, space, and aviation customers supporting order flow
through the period. The segment's Drilling Tools and Speciality
businesses continue to report subdued results given the low US
onshore rig count.
The Group's EMEA segment reports a continuing decline in
activity within the North Sea, leading to widening losses in the
period. The segment's well intervention business unit also has seen
a decline in revenue as activity levels in Europe and the Middle
East continue to weaken. Accordingly management will continue to
reduce the cost base within the segment as appropriate, to align
businesses with the medium-term regional outlook.
In Asia Pacific, the segment has reported increasing profits
throughout the period as sales into the Middle East and the eastern
hemisphere supported business volumes.
For further information please contact:
Hunting PLC Tel: +44 (0) 20 7321 0123
Jim Johnson, Chief Executive
Bruce Ferguson, 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 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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