Hunting swings to underlying loss amid oil market downturn

Hunting reported a fall in revenue to $626m (£449.48m) in its full-year results on Thursday, from $960m in the prior year, as it suffered from a reduction in oil and gas activity globally in 2020.

The London-listed energy services provider said its EBITDA for the year ended 31 December totalled $26.1m, falling from $139.7m in 2019, while it swung to an underlying loss from operations of $16.4m from a profit of $94.3m a year earlier.

Its underlying diluted loss per share was 10 US cents, compared to earnings of 43.9 cents in the prior year, while its reported diluted losses per share came in at 143.2 cents, down from earnings of 23.5 cents.

Net assets stood at $976.6m at period end, falling from $1.22bn at the end of 2019, while its total cash and bank was $101.7m, slipping from $127m.

The board proposed a final dividend of four cents per share, subject to approval at its annual general meeting, improving from the nil dividend paid for 2019.

“The early weeks of 2021 have seen a steady increase in a number of key market indicators, including a rising West Texas Intermediate oil price and improving rig count,” said chief executive officer Jim Johnson.

“This positive sentiment, if sustained, bodes well for the global energy industry for the coming months as operators seek stability across the sector to enable them to confirm new drilling programmes and capital investment.

“Supporting this sentiment is the availability of Covid-19 vaccines and the rollout of immunisation programmes across the world.”

Johnson said that within the US market, the company’s Hunting Titan segment had seen a “steadily improving” revenue profile in recent months as onshore activity levels increased.

“The business has reopened a distribution centre to meet this demand and has made selective additions to headcount.

“The group's US operating segment, which provides equipment to both onshore and offshore projects, anticipates accelerating activity in the second half of 2021, following the slowing of offshore projects in the second half of 2020.”

In Canada, Johnson said Hunting’s new business model was seeing good customer acceptance as it worked with its new licence partners.

Hunting's European operations, meanwhile, reported optimism for the year ahead as deferred drilling programmes restarted.

“In the UK, a number of clients have already indicated that drilling will take place in 2021, while in the Netherlands international orders received since the start of the year will ensure our OCTG facility will remain busy for the short-term,” Jim Johnson explained.

“In the Middle East and Asia Pacific, new opportunities are emerging following the increase in the oil price and the beginning of vaccination programmes, with growth now projected from the middle of the year.”

Johnson added that the group made “strong inroads” into new sectors in the year, with its presence in the medical devices, aviation and space sectors increasing and its various operating segments all progressing initiatives that used the firm’s core competencies, as well as diversified its revenue streams.

“The board of Hunting believes that the group has been decisive in its actions during 2020 to manage the market downturn.

“The

group enters 2021 a leaner organisation, with its global capabilities intact and poised to capitalise on any new opportunities presented.”

At 0937 GMT, shares in Hunting were down 1.63% at 265.8p.