29th Jun 2020 11:05
(Alliance News) - Hunting PLC on Monday predicted a significant year-on-year reduction in its first half earning,s but said it expects an improvement in its performance going forward.
The energy services provider estimates expects underlying earnings before interest, tax, depreciation, and amortisation for its first half of June 30 at between USD22 million to USD23 million, a significant fall from USD77.4 million posted for the first half of 2019.
Hunting said its performance was hurt by the reduction in the West Texas Intermediate oil price in March 2020 caused by the Covid-19 pandemic as well as a oil market share battle within the OPEC plus group.
It added that it implemented actions to cut costs to mitigate the negative effects of the worsened trading environment. These included the closure of three distribution centres in North America and two manufacturing facilities, over 50% cut in budgeted capital expenditure with around USD22 million projected for the full year, and the reduction of its workforce by 25%. It said the cost cuts are expected to result in annualised savings of around USD60 million.
The company said its balance sheet has remained "robust", adding that it expects net cash on Tuesday of around USD44 million to USD46 million.
Looking ahead, Hunting said its offshore market position has been strengthened by its acquisition of Enpro Subsea Ltd in February and the asset acquisition of RTI Energy Systems in August 2019. It added that it expects conditions to improve going forward.
"The continued opening of economies around the world will support oil prices going forward, which should lead to an improving financial position for our clients, and spur increased demand for our products as drilling activity recovers. Depletion rates continue unabated, and with a growing number of drilled-but-uncompleted wells, the onshore US region should see improved activity later in the year," said Chief Executive Jim Johnson.
The stock was un-traded at 208.00 pence each on Monday morning in London.
By Ife Taiwo; [email protected].
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