Hunting PLC (LON: HTG) have said that they expect annual profits to remain within their current market expectations, but are dependent on results in December.
Hunting manufacture premium, high end downhole metal tools and components required to extract hydrocarbons across the well construction, completion and intervention stages of the well’s lifecycle.
Shares in Hunting were bruised on Tuesday morning after the announcement, and trade at 383p (-6.19%). 17/12/19 11:47BST.
Hunting saw their shares in red a the end of October, as the firm speculated on lower profits following a US drilling slowdown.
The FTSE 250 listed energy company said that its third-quarter underlying profits had dropped below the $35 million and $42.4 million it had boasted in the first and second quarters respectively.
Again the firm today has seen its shares in red, as the firm hedged its bet on a solid December performance to allow it to meet guidance.
Hunting said, as anticipated, activity levels within the North American oil and gas industry continues to slow, with the pace of decline increasing in the US onshore market.
Further, the oil and gas contractor said “exhaustion” within its client base together with seasonal declines are hurting its fourth quarter results and “certain clients have closed facilities serving the US onshore sector due to the slowing market”.
Hunting added that operating profit and revenue in both October and November were below the average rate for the third quarter of the financial year due to the “slowing and highly competitive” US onshore market.
Hunting however did reassure shareholders saying that it continued to trade well and remained cash generative.
It expects to have around $110 million of cash at the end of the year, with $45 million of lease liabilities – resulting in a $65 million net cash position.
Hunting allude to the offshore and international oil market facing a slowdown, however there was a return to growth as Hunting Electronics business reported firm results.
Looking ahead to 2020, the company said: “At this time early announcements from Hunting’s publicly quoted clients indicate that capital spend in the year ahead will be lower than 2019, as the oil and gas industry endeavours to improve returns and increase cash generation for investors.”
In similar fashion to Hunting, fellow American operator Active Energy have seen their operations have stops and starts over the last week.
The firm said that it had begun it commercial production in Lumberton, North Carolina after the North Carolina Department of Environment & Natural Resources is continuing to review its application to operate.
At a time where oil prices continue to be volatile, and market trading is being hampered by both political and economic variables shareholders will hope that Hunting can pull out a strong set of results in December.
