Hunting PLC (LON:HTG), the international energy services group, today announced its results for the year ended 31 December 2018.
Financial Summary*
· Revenue $911.4m (2017 – $724.9m**)
· Underlying EBITDA $142.3m (2017 – $56.0m**)
· Reported EBITDA $141.3m (2017 – $53.6m**)
· Underlying profit from operations of $104.7m (2017 – $14.3m**)
· Reported profit from operations of $75.4m (2017 – $(24.8)m loss**)
· Underlying diluted earnings per share 49.6 cents (2017 – 8.0 cents**)
· Reported diluted earnings per share 52.3 cents (2017 – (16.0) cents loss per share**)
· ROCE 9% (2017 – 1%)
· Net cash of $61.3m (31 December 2017- $30.4m)
· Final dividend of 5.0 cents per share declared (2017 – nil), proposed to be paid on 10 May 2019 to shareholders on the register on 23 April 2019, subject to approval at the Company’s AGM
*Underlying results are based on reported results before amortisation of intangible assets recognised as part of a business combination and exceptional items. Reported results are based on the statutory results for continuing operations as reported under International Financial Reporting Standards as adopted by the EU.
**2017 financial information has been restated to reflect the adoption of IFRS 15 Revenue from Contracts with Customers.
Operational and Corporate Highlights
Record performance delivered by Hunting Titan, supported by strong US onshore completion activity.
– Increase in volume of H-1 Perforating Systems sold, as customers continue to adopt more efficient and safer perforating technology.
– Capacity expansion initiatives commenced at Milford and Pampa facilities to address demand.
– Rationalisation of distribution centres across North America to increase alignment with customer activity and general market outlook.
US segment records increased volumes as US onshore market accelerated.
– Good customer acceptance of TEC-LOCK™ semi-premium connection, for use in onshore drilling operations.
– Modest increases in demand for MWD/LWD tools as key customers’ replacement programmes recommenced.
– Increased volumes reported at Subsea as domestic and international deep water projects recommenced.
– Production of Hunting Titan products now occurring within Hunting Electronics, Hunting Specialty and US Manufacturing facilities, increasing utilisation and inter-segment sales.
Sales volume improvement recorded within other international operating segments.
– Canada operations report increased OCTG volumes following new customer wins.
– European well intervention business recorded increased demand for pressure control and well testing equipment.
– Asia Pacific operations report modest increase in OCTG sales in domestic China.
– Middle East activity improved in the year as well intervention and OCTG sales into Northern Iraq recommenced.
Capital investment mainly addressing production capacity constraints.
– $30.1m spent in the year, including investment to support future demand for Hunting Titan products, targeted to reduce costs and increase efficiency.
Group rationalisation continued in the year.
– Closure of one manufacturing facility in Kenya and three distribution centres in North America.
Board changes.
– Carol Chesney appointed Director and Chair of the Audit Committee in April 2018.
– Keith Lough appointed Director in April 2018 and Senior Independent Director in August 2018.
– John Nicholas retired from the Board in April 2018 and John Hofmeister retired in August 2018, both completing nine years’ service.
Commenting on the results Jim Johnson, Hunting Chief Executive, said:
“The Group’s improved performance in 2018 and into early 2019, has been driven by US onshore-centric drilling activity and investment, while the results of Hunting’s international businesses remain dependent on further market improvement. Given the ongoing commodity price and geopolitical volatility, the Board remains focused on the agility and flexibility of the business to respond to market conditions. Initiatives to further improve profitability and margins, and reduce losses, including in-sourcing of production, facility rationalisation and inter-segment manufacturing, will also continue in the year ahead.
“The Company has a number of new products and technologies scheduled to launch in 2019, which will continue to broaden our market reach. Further, with the commissioning of new, higher-efficiency manufacturing, the potential for margin improvement in our key product lines is anticipated, however, it is also conditional on activity levels improving. The Board continues to review bolt-on acquisition opportunities, which, if concluded, will increase our presence in the wellbore and enhance our current product portfolio. Any potential acquisitions would need to complement our portfolio of onshore technologies as well as subsea completions within the oil and gas industry.
“With a strong balance sheet, tightly managed cost base and a strong presence in our chosen upstream equipment and service markets, Hunting remains well positioned to capture opportunities in the current market, should the recovery across the industry continue.”
