Hunting swings to H1 loss, amends credit facility

Oil services group Hunting said it swung to a loss in the first half as revenue declined amid weaker oil prices.

In the six months to the end of June, the company reported an underlying loss from operations of $50.8m compared to a profit of $20.4m in the first half of last year as revenue fell to $228.4m from $463.6m.

Chief executive Dennis Proctor said: "While industry sentiment reached a low point during the early months of the reporting period, the improved US rig count data seen through Q2 indicates that the global energy markets are adjusting to the lower oil price environment.

“The combination of lower operating costs and production efficiency gains has led to increased enquiry levels as operators focus on those projects which provide the strongest returns. However, given the inherent uncertainty within the industry at this time, the current market estimates for the 2016 full year will remain dependent on an improved trading environment in the latter part of the year.”

The company also said on Monday that it has amended the terms of its credit facility. Under the new terms, the size of the facility has been reduced to $200m from $350m and Hunting said there will be no dividend payments until the end of the amendment period.

Proctor said: "While the group's performance has suffered, we are pleased to have concluded the renegotiation of our bank covenants to enable Hunting to continue with strong, liquid resources to respond to an improving market environment.

“At the period end our net debt position has been reduced to $87.5m following ongoing cost cutting and the receipt of tax refunds, which indicates the strength of our balance sheet and the resilience of our business model."

Hunting said during the period, it cut its headcount by 46% to 2,145 and closed three manufacturing facilities and seven distribution centres as it looks to cut costs.

At 1040 BST, Hunting shares were up 2.9% to 475p.