Hunting swings to interim loss as oil industry slowdown bites
Oil service group Hunting swung to a pre-tax loss as the reduced activity in the oil and gas sector weighed heavily on revenue.
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The London-listed company posted a first half loss of $65.8m compared with a profit of $68.9m in the corresponding period the year before, as revenue plunged 30.1% year-on-year to $463.6m, as the oil industry suffered a slowdown in North America.
The company added that it had registered a decline in the amount of well construction and well completion projects in the region, which was the worst-affected by the downturn, as the rig count fell by over 50% since the start of 2015.
Pre-tax profit before amortisation and exceptional items tumbled 81.1% year-on-year to $17.7m, while earnings before interest, tax, depreciation and amortisation more than halved to $43.5m, leading the group to slash its interim dividend from 8.1 cents per share to 4 cents per share.
Hunting said net debt grew 27.2% to $166.7m, even though the company expects to save $41m per year after cutting its workforce by 25% since the turn of the year.
"Our first half performance has been affected by the downturn across the energy industry with management addressing this market environment with staff reductions and cost saving measures," said chief executive Dennis Proctor.
"The capital investment projects underway to consolidate operations and position our businesses for the future remain on schedule, as efficiency gains and strategic investments in emerging geographic regions enable new opportunities to be pursued as the global industry evolves.”
Hunting shares were down 2.22% to 423.40p at 0951 BST on Thursday.