3rd Mar 2016 08:05
LONDON (Alliance News) - Hunting PLC Thursday said it has slashed its dividend 74% in 2015 after reporting a substantial loss following steep declines in revenue as activity levels within the oil and gas sector continue to dwindle during the ongoing commodity rout.
The company, which supplies services to the oil and gas industry, demonstrated the slowdown in activity within the sector after swinging to a pretax loss in 2015 following a steep decline in revenue as sales dropped across all of its divisions.
As a result, Hunting slashed its dividend by 74% to only 8.0 cents per share in 2015 from the 31.0 cents paid last year.
Hunting reported a USD289.2 million pretax loss in 2015, swinging from a USD108.5 million profit the year before as revenue plummeted to USD810.5 million from USD1.38 billion in 2014. Hunting's margins are also under pressure, but Hunting said the decline in revenue was in line with global expenditure within the oil and gas industry.
The company managed to squeeze out a meagre profit before exceptional items of USD9.4 million, a substantial drop from the USD212.4 million profit in 2014.
Those exceptional items totalled USD259.7 million in 2015, related to impairments against its assets.
Hunting said it has reduced costs by 30% in 2015, partly driven by the closure of four of its operating sites. Hunting is also preparing to close three distribution centres shortly.
Well construction activities saw revenue drop to USD211.4 million from USD378.3 million in 2014, well completion revenue fell to USD488.6 million from USD862.6 million whilst well intervention activities generated revenue of USD106.3 million, down from USD135.5 million in 2014.
Exploration and production activities also saw revenue drop to only USD4.2 million from USD10.1 million.
All those activities, apart from exploration and production, managed to report underlying profits in the year, delivering a combined underlying profit of USD20.7 million in 2015, but that is a steep drop from the USD217.6 million delivered last year.
By Joshua Warner; [email protected]; @JoshAlliance
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