Hunting shares fell on Wednesday after it cut its full-year profit guidance as the deepening Middle East conflict disrupted its oil-services business.
The precision engineering group, which supplies equipment to the oil and gas industry, said it now expects full-year EBITDA of $128m to $133m, below earlier expectations.
Hunting shares tumbled 11% on the news.
It blamed the “protracted and deepening” Middle East conflict, which has hit tender activity across the region through logistical problems and attacks on shipping and infrastructure, while declining rig activity in Saudi Arabia reduced demand for its well-completion products.
It was also cautious about North American activity in the final quarter, and cited supply chain issues at its electronics unit.
The company said the long-term fundamentals of its markets remained robust, pointing to continued strong trading in its subsea business, and said it expected significant upside in the Middle East once hostilities ceased. But with no sign of a true resolution to the conflict in sight, investors are taking a sell-first, ask-questions-later approach.
It is pressing ahead with cost cuts, including combining two of its regional operating segments and selling non-core businesses, and pointed to a major re-tender from Kuwait Oil Company as an opportunity.
Hunting said its balance sheet remained strong, and that it would pay its interim dividend and continue a share buyback. It is also still searching for a new chief executive. This may help fuel a recovery when Middle East tensions ease.