Hunting plc (LON: HTG) have issued a warning speculating lower profits, after they have experienced slower onshore drilling operations and lower production rates.
In a trading update release on Tuesday morning, the FTSE250 (INDEXFTSE: MCX) 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.
Sales had been reduced due to a slowdown in drilling operations in North America, as this happened the manufacturer of pipeline equipment anticipated US drilling will continue to stagnate, affecting results for the second half of the year.
The trading statement said the following “As anticipated, challenging markets continue to be a feature of our industry, negatively impacting trading conditions and results in September. In particular, a slow down within US onshore completions has continued which has been partially countered by ongoing improvements within our offshore and international operations, resulting in a net overall decline for the Group profit in the quarter compared to Q1 and Q2 2019. As a result, the Board anticipates a full year EBITDA result at the lower end of market expectations, given current trading momentum and the overall product mix of results forecast for the balance of the year”
With added supply disruptions, volatile oil prices in the last few months have led to loweer investment and budgets being exhausted in exploration and production companies, Hunting added.
Weakening sales in its Titan division, which manufactures perforating guns for drilling, was “partially countered” by ongoing improvements in offshore and international operations with a strong quarter for its Electronics business, as demand for downhole measurement tools has remained steady, the group said.
Hunting’s net cash, excluding lease liabilities, at the end of the period was $58.5 million.\
Currently, shares of Hunting are trading at 400p per share seeing a 4.67% fall during Tuesday trading. 29/10/19 10:46BST.
Elsewhere in Oil and Mining sector updates have been provided. Tower Resources have pursued a new joint venture, Baron Oil (LON: BOIL) have seen their share price dip, Cabot Energy (LON: CAB) shares bounced after strong trading figures and Nostrum Oil and Gas (LON: NOG) have faced supply disruptions similar to Hunting Plc.
