REG - Hunting PLC - Q3 2022 Trading Update

HuntingAnnouncement

27/10/2022 07:01

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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.

 

Highlights

 

·       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                        Tel: +44 (0) 20 7321 0123

 Jim Johnson, Chief Executive

 Bruce Ferguson, Finance Director

 lon.ir@hunting-intl.com

 Buchanan                           Tel: +44 (0) 20 7466 5000

 Ben Romney

 Jon Krinks

 

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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