Hunting expects slightly lower revenue run rate in fourth quarter

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Hunting PLC (LON:HTG) said the revenue run rate for the fourth quarter may be “slightly” lower than the third quarter due to the usual seasonal slowdown.

In the three months to September 30, the oil services group reached breakeven underlying earnings (EBITDA) despite low levels of activity caused by the impact of COVID-19 on global energy demand.

READ: Hunting boosted by Barclays’ double-upgrade to ‘overweight’ from ‘underweight” on valuation grounds

Clients cut drilling and completion activity in the period, however the firm said that in certain sub-sectors of the market, including areas of the US onshore market, activity levels have now stabilised.

Monthly revenue increased within the Hunting Titan and Asia Pacific segments during the quarter, but it couldn’t offset declines within the US and Europe, Middle East and Asia (EMEA) segments.

Hunting’s US businesses reported positive EBITDA in the quarter despite the decline in revenue, with the segment’s Premium Connections and Subsea businesses reporting modest activity levels and profits.

The EMEA segment reported a continuing decline in activity within the North Sea, leading to widening losses in the period, while the well intervention business unit also saw a decline in revenue as activity levels in Europe and the Middle East continue to weaken.

Management will continue to reduce the cost base within the segment as appropriate, Hunting said.

The Asia Pacific division reported increasing profits throughout the period as sales into the Middle East and the eastern hemisphere supported business volumes.

Cash position at September 30 was US$69mln, though the company had outflows of US$3.3mln to pay the US$2 cents per share interim dividend last week.

Shares dipped 1% to 140.26p early on Tuesday.

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