# Hunting PLC  continues to deliver record results

- Link: https://www.directorstalkinterviews.com/hunting-plc-continues-to-deliver-record-results/412763216
- Published: 2018-12-17T08:05:59+00:00
- Author: Charlotte Edwards

**Hunting PLC** (LON:HTG), the international energy services group, today provided
a year-end Trading Update ahead of announcing its 2018 Full Year Results on Thursday
28 February 2019.

Group results to the end of November 2018 have remained in line with management’s
expectations, underpinned by broad-based stability within the Group’s operations.
As expected and previously noted in the October 2018 Trading Update some market 
softness has been observed within those businesses focussed on the US onshore as
public holidays and the exhaustion of clients’ budgets have marginally impacted 
daily sales run-rates.

Hunting Titan has continued to deliver record results in 2018 due to US onshore 
completion activity, coupled with increased market acceptance of the Group’s proprietary
technologies, which has led to a strong year-on-year increase in revenue and operating
profit. Q4 operating profits are likely to record a marginal decline compared to
the previous two quarters, for reasons noted above, in addition to increased competition
seen within certain product lines. Further, clients are indicating caution on committed
spend for the early part of 2019 as the lower oil price and pipeline bottlenecks
in the Permian basin indicate a short term slowing in completion activity. As reported
by market commentators, the pipeline bottlenecks in the Permian are forecast to 
improve by mid-2019.

The Group’s US segment has also reported an improved performance during 2018. Hunting
Electronics reported a further growth in sales during the quarter on the back of
downhole tool replacement programmes for key clients, supported by continued production
of firing switches on behalf of Hunting Titan. The Group’s Premium Connections, 
Dearborn, Specialty Supply, Trenchless and Drilling Tools businesses also report
an improving financial performance as the region’s core markets maintain stability,
despite the recent oil price decline.

The Group’s Canada, Europe, Middle East and Asia Pacific segments, report a similar
performance in Q4 compared to Q3, with cost containment initiatives continuing to
narrow losses.

Given the Group’s performance in the year, supported by robust cash generation and
disciplined capital expenditure, Hunting maintains a strong Balance Sheet. The Group’s
net cash position as at 7 December 2018 was $44.6 million, which includes the cash
refund of $10.6 million from the Company’s UK pension surplus. During November 2018,
the Company’s employee share trust purchased 750,000 Hunting PLC ordinary shares,
which absorbed $5.7 million of cash. These shares will be used to partially satisfy
future share award vestings. Hunting Titan continues to progress the production 
capacity expansion programmes at its Pampa and Milford facilities. Both projects
remain on track for completion in late Q1 2019. The Group anticipates that capital
expenditure for the full year 2018 will be c.$30 million.

In December 2018, Hunting concluded discussions with its bank group to improve the
terms of the Group’s committed borrowing facilities. Total committed facilities 
are now $160 million (previously $200 million), with the facility now due to expire
in 2022. Subject to agreement with the bank group, the facility can be increased
to $235 million and the term extended by one year to 2023.

Further commentary on the Group’s trading expectations for 2019 will be provided
within the 2018 Annual Report when published in February 2019. However, given the
current volatile market environment, management anticipate these market conditions
will impact short term budgetary decision making by our customers with possible 
deferrals of work. Management enter 2019 with a cautious outlook, but believe that
Hunting is in a robust position to manage these challenging market conditions.

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