Hunting PLC (LON:HTG), the international energy services group, today announced its results for the six months to 30 June 2018.
Financial Summary1
· Revenue $442.8m (H1 2017 – $318.1m)2
· Underlying EBITDA $72.6m (H1 2017 – $11.9m)2
· Underlying profit from operations $53.5m (H1 2017 – $9.3m loss)2
· Reported profit from operations of $38.9m (H1 2017 – $23.9m loss)2
· Underlying diluted earnings per share 25.0 cents (H1 2017 – 6.8 cents loss per share)2
· Reported diluted earnings per share 19.1 cents (H1 2017 – 15.8 cents loss per share)2
· Interim dividend declared of 4.0 cents (H1 2017 – nil)
· Net cash of $39.0m (31 December 2017 – $30.4m net cash)
1 – Underlying results are before amortisation of acquired intangible assets and exceptional items. Reported results are based on the statutory results as reported under International Financial Reporting Standards.
2 – 2017 financial data has been restated to reflect the adoption of IFRS 15 Revenue from Contracts with Customers.
Operational Highlights
· Strong increase in volumes manufactured during H1 2018 compared to the prior period reflecting the improvement in drilling and completion activity in US onshore markets and more stability globally.
· Sustained, strong performance by Hunting Titan throughout the reporting period, given the WTI oil price trading range and continued growth in activity within US onshore shale basins:
o Global manufacturing of perforating guns expanded – production in Canada, China Mexico and US;
o Expansion of charge manufacturing facility commenced at the Group’s Milford facility. Scheduled completion in Q2 2019, with a 30% increase in production capacity;
o Expansion and automation of perforating gun manufacturing at the Group’s Pampa facility. Scheduled completion Q1 2019 with a 15% and 30% increase in production capacity for conventional perforating guns and H-1 Perforating Systems respectively; and
o Progress with new technology development – commercial launch of autonomous cutting tool and enhanced H-1 Perforating System planned for H2 2018 and Q1 2019 respectively.
· Commercial launch of three TEC-LOCK™ semi-premium connection variants achieved during the period. Target markets include onshore conventional and shale projects.
Financial Highlights
· Increased revenue and EBITDA reported in the period and a return to underlying and reported profit before tax.
· Gross margin of 31% (H1 2017 – 22%) and EBITDA margin of 16% (H1 2017 – 4%) achieved in the period on the back of a lower cost base and operating leverage benefits.
· Hunting Titan and US operations report operating profits as markets improve. Asia Pacific, Canada, Europe, Middle East and E&P segments remain loss making.
· Recommencement of shareholder distributions – interim dividend of 4.0 cents declared, absorbing approximately $6.6m, payable to shareholders on 24 October 2018, with a record date of 5 October 2018.
Board Changes and Executive Committee
· Carol Chesney and Keith Lough joined the Board as independent non-executive Directors on 23 April 2018. Mrs Chesney was appointed Chair of the Audit Committee, following the retirement of John Nicholas on 18 April 2018.
· John Hofmeister retires from the Board today after nine years of service. Annell Bay has been appointed Chair of the Remuneration Committee and Keith Lough has been appointed Senior Independent Director.
· Formation of Executive Committee comprising the executive Directors plus segment heads to manage the Group.
Commenting on the results Jim Johnson, Hunting Plc Chief Executive, said: “The Group’s results for the first half of the year are underpinned by a strong market environment within US onshore completions, which has led to outstanding results for Hunting Titan and improving profitability for Hunting’s US operations.
“Outside the US, Hunting’s other reporting segments are seeing improving markets. However, there are headwinds given the introduction of trading tariffs for steel and the continuing volatile geopolitical environment.”
“Given the interim financial results reported today and the more stable outlook, the Board is pleased to be re-instating dividend distributions to shareholders.”
