Company Announcements

Q3 2022 Trading Update

Source: RNS
RNS Number : 2295E
Hunting PLC
27 October 2022

For Immediate Release

27 October 2022






Hunting PLC


("Hunting" or "the Company" or "the Group")


Q3 2022 Trading Update


Organisational Changes


Hunting PLC (LSE: HTG), the international energy services group, today issues a Q3 2022 trading update.




·       Continued strong momentum across all operating segments.

·       Strengthening Group EBITDA in Q3 2022.

·       $438 million sales order book as at 30 September 2022.

·       $187 million of liquidity including cash and bank of $37 million and $150 million lending facility.

·       Outlook continues to improve with the acceleration of activity across the global oil and gas industry.


Trading Statement


Trading in Q3 2022 has been strong as momentum within the global oil and gas industry continues to accelerate. Group EBITDA in the quarter was ahead of Q2 2022, with a year-to-date EBITDA of c.$36 million being recorded, with all operating segments and product lines seeing improved performance as clients commit to new projects.


At 30 September 2022, the Group's order book was $438 million, which provides confidence that sales momentum will remain robust for the remainder of the year and well into 2023.


Hunting Titan continues to see strong sales in its core market of North America, along with increased international market opportunities, particularly in South America. With the continuing migration of clients to new technology, gross margins in this segment are projected to improve across the remainder of the year and into 2023, with sales of perforating systems and instrumentation product groups being particularly strong in the year-to-date.


Within the North America segment, sales momentum within the Premium Connections and Accessories Manufacturing businesses saw strong increases as clients continue domestic and international project development. The performance of the segment's Subsea, Trenchless and Specialty businesses has remained in line with management's expectations. The Advanced Manufacturing group continues to see improving results, however some supply chain issues remain, particularly in the area of microchip supply. Management believe that this latter issue is unwinding, with the performance of these businesses forecast to improve throughout the remainder of the year and into 2023.


The EMEA operating segment continues to see improving results, supported by the Tubacex contract for Brazil, which is being completed in the Group's Netherlands and Aberdeen facilities. The segment's Norway and Saudi Arabia businesses reported sales improvement throughout the quarter as international activity levels return to growth.


The Asia Pacific operating segment saw an improvement in sales during Q3 2022 after a challenging H1 2022. The segment begun work on the CNOOC contract that was awarded in August, which will contribute to sales and profitability in 2023.


The Group's balance sheet remains strong, with net assets as at 30 September 2022 of c.$849 million. As indicated at the Group's 2022 Half Year Results, investment in working capital to meet secured orders has increased in the quarter, and includes the inventory requirements for the CNOOC contract. Cash and bank was $37 million as at 30 September 2022, with a further reduction anticipated by management as raw material purchases continues in the quarter to support this important order. In addition, the 2022 interim dividend of 4.5 cents per share will be paid on Friday 28 October 2022, which will absorb a further c.$7.2 million. Capital expenditure for the full year is anticipated to be c.$20 million. Management anticipate that working capital will return to more normal levels in 2023.


In summary, the Board remains comfortable with current market expectations as sales momentum and profitability continue to increase, with the outlook for 2023 remaining particularly positive.


Re-organisation of Executive Committee and Formation of New Operating Segment


The Group announces that Rick Bradley, Hunting's Chief Operating Officer, will be retiring from Hunting in November 2022 and will therefore step down from the Executive Committee on 30 November 2022. The Board wish to thank Rick for his service to the Group, which has included leading the Hunting Titan operating segment from its acquisition in 2011 up to 2017, prior to his appointment to his current role.


Given the Group's enhanced position within the global subsea technologies market, following the acquisition of RTI Energy Systems in 2019 and Enpro Subsea in 2020, a new operating segment will be formed on 1 January 2023. The Subsea Technologies operating segment will comprise the National Coupling, RTI and Enpro businesses and will be led by Dane Tipton, Managing Director, who will report to Jim Johnson, Chief Executive. Mr Tipton will join the Hunting Executive Committee on 1 November 2022.


Jim Johnson, Chief Executive of Hunting, commented:


"The Group continues to report a strengthening financial performance, which now extends into 2023. With energy security now the top of every political agenda, the outlook for the oil and gas industry remains strong, with market analysts forecasting continued investment growth in the medium term. In addition, given the macro-economic and geopolitical shifts seen in the quarter, management is also of the belief that the global oil and gas industry will particularly benefit from these pressures which continue to build as affordable, secure energy continues to be in demand by western economies, placing Hunting in an excellent position going forward.


"Management is pleased with the improving performance of each business within the Group, which has been a result of the significant cost cutting and restructuring completed since 2020, coupled with the strong return to growth of our core markets. With the continued success of our Subsea Technologies business group, I am looking forward to highlighting the value of our technology and service offering in this growth segment of the market under Dane's strong leadership and vision.


"Overall Hunting is well placed to grow strongly within the current market environment and with a compelling, diversified product offering across all areas of the global oil and gas market, the Group remains well placed to deliver robust growth in the medium term."


For further information please contact:


Hunting PLC

Jim Johnson, Chief Executive

Bruce Ferguson, Finance Director


Tel: +44 (0) 20 7321 0123


Ben Romney

Jon Krinks

Tel: +44 (0) 20 7466 5000


Notes to Editors:


About Hunting PLC


Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.


The Group reports in US dollars across four segments: Hunting Titan, North America, Europe, Middle East and Africa ("EMEA") and Asia Pacific.


Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

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