Hunting PLC AGM and Q1 2019 Trading Update (3963W)

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RNS Number : 3963W

Hunting PLC

17 April 2019

 
 For Immediate Release   17 April 2019 
 

Hunting PLC

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

AGM and Q1 2019 Trading Update

Hunting PLC (LSE:HTG), the international energy services group, will today be holding its Annual General Meeting commencing at 10.30a.m., and ahead of the meeting, issues a Q1 2019 trading update.

Trading Update

Overall, the Group has started the year well reporting an underlying EBITDA in the period of approximately $35.0 million, which is in line with internal targets. The first quarter of 2019 saw a continuation of the level of revenues and profits reported in Q4 2018 with our US onshore completions focused businesses remaining busy, however, offshore focused operations continue to face slow and challenging markets, particularly in the Gulf of Mexico and North Sea. With cost saving measures established in earlier years within our international operating segments, together with some modest market improvements, segmental results are improving and are reporting reduced losses in comparison to prior periods, particularly in our European operations.

Hunting Titan has reported revenues in the quarter ahead of Q4 2018; however, margins have reduced during Q1 2019 as increased competition has been reported due to the industry working through excess inventories built up in late 2018. Initiatives implemented to address these market conditions include inventory reduction of lower technology conventional perforating guns and some price reductions of other products. These initiatives are not expected to be a feature for the remainder of the year as market share has been maintained and new technology and products continue to be introduced including the new H-2 short length perforating system which has been well received by customers. Further, the capacity expansion programmes underway within the business remain on schedule for completion by the end of the current quarter and will provide more efficient manufacturing on a lower cost base.

In the US, results are ahead of expectations, as the Group's business units benefit from improving demand particularly within onshore completions and capital equipment markets.

In Canada, extremely cold weather conditions in late January and early February affected activity levels within the region, which adversely affected volumes and margins. However, an improving trend has been reported in March.

Within Europe, activity in the North Sea remains low in comparison to historical levels, but improved sales within the Group's OCTG and well intervention product lines has helped contain losses. In the Middle East, regional activity levels are improving, benefiting our Saudi Arabian operations, leading to a modest improvement to revenue and the business reporting a break-even position at the end of the quarter.

In Asia Pacific, revenue is ahead of management's expectations, with the segment reporting profitability throughout the period as orders for customers in the Middle East were completed.

At 31 March 2019, the Group's net cash position was c.$45.0 million. The reduction since the year-end position of $61.3 million reflects working capital cash absorption of $40.0 million, mainly settlement of trade receivables and trade payables, capital investment of $9.0 million and settlement of employee cash bonus awards relating to 2018. This net cash position is also before payment of the 2018 final dividend, due to be paid on 10 May 2019, subject to shareholder approval, which will absorb c.$8.2 million. The net cash figures quoted above do not include the IFRS 16 lease liability obligations of approximately $48.0 million at the quarter-end.

The outlook for the remainder of the year remains positive for the Group, given the market backdrop of an improved oil price, which reports an increase in excess of 40% since the start of the year. Market commentators also predict improving market sentiment as US shale plays overcome takeaway capacity issues. Therefore, the Group remains well positioned to capture opportunities from this market environment.

Change in Operating Segments

As noted in the Company's 2018 Annual Report and Accounts, the Group was restructured in late 2018 and has combined its Europe, Middle East and Africa operating segments from 1 January 2019. The new segment, will report its performance as a single entity within Hunting's 2019 interim results.

For further information please contact:

 
 Hunting PLC                         Tel: [phone] 
  Jim Johnson, Chief Executive 
  Peter Rose, Finance Director 
  Tarryn Riley, Investor Relations 
 Buchanan                            Tel: [phone] 
  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 six segments: Hunting Titan, US, Canada, Europe & Middle East, Asia Pacific and Exploration and Production.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

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April 17, 2019 02:00 ET (06:00 GMT)