27th Jun 2019 09:39
(Alliance News) - Hunting PLC, which provides services to the oil and gas sector, said Thursday it is comfortable with the outlook for the industry in 2019 though is wary of oil price volatility.
In the first half of 2019, trading has met expectations, Hunting said, with revenue up on the prior year and earnings before interest, tax, depreciation, and amortisation "marginally" ahead year-on-year.
Hunting post underlying Ebitda of USD72.6 million in the first half of 2018 on revenue of USD442.8 million.
The company said the West Texas Intermediary oil price was 29% higher on average in the first half of 2019 than the previous year, helping stabilise the US market and also boosting operations elsewhere in the year.
The US has beaten expectations in the first half, Hunting said, with Asia Pacific activity picking up. The new Europe, Middle East, & Africa segment is steadily decreasing operating losses.
However, one market that does remain subdued is Canada due to offtake constraints in Alberta province, a government-enforced production slowdown, as well some extreme winter weather in the west of Canada.
Hunting's core business, Hunting Titan, posted revenue broadly in line with the first half of 2018, but operating profit and margins have fallen due to action take to reduce inventories as well as some price changes on products to maintain market share.
However, the second quarter for Hunting Titan was stronger than the first, helped by some new technologies coming on stream.
"Overall the board is comfortable with the current market consensus for the 2019," commented Hunting.
"While there are some encouraging signs in the US segment and increased activity levels in the North Sea and Middle East, we continue to acknowledge the potential impact of a volatile oil price on markets and activity levels coupled with cash spend disciplines exercised by our clients to stay free cash-flow positive and within budget," it continued.
"Management will continue to provide regular trading updates with the next being the group's half year results announcement."
Hunting will release interim results on August 29. Shares were trading flat on Thursday morning in London at 515.50 pence each.
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