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Hunting swings to profit as Titan performance surges
Energy services group Hunting announced its results for the year ended 31 December on Thursday, with revenue from continuing operations rising to $722.9m from $455.8m in 2016.
The FTSE 250 company said underlying EBITDA swung to $55.4m, from a $48.9m loss in the prior year, while its underlying profit from operations reached $13.7m, compared to the $92.2m loss reported a year earlier.
Its reported loss from operations narrowed to $25.4m, from $140.7m.
Underlying diluted earnings per share reached 7.6 cents, from the 45.3 cent losses per share posted in 2016, while Hunting's reported diluted loss per share narrowed to 16.4 cents, from 76.8 cents.
The company had net cash of $30.4m as at 31 December, compared to $1.9m net debt at the start of the year.
On the operational front, the company's board said it saw "strong" performance by Hunting Titan during the year, with units of production exceeding 2014 levels.
It claimed strong sales of its H-1 Perforating System, with good utilisation of production capacity in the US, Canada, China and Mexico to meet demand.
The company recommissioned its Oklahoma City manufacturing facility in the first quarter.
A new distribution centre was opened at Pleasanton, Texas during the year, to address new activity in the Eagle Ford shale basin, with the board also highlighting the filing of 13 new patents during the year, with one registered.
The closure of the Cape Town, South Africa manufacturing facility started during the year, and the board recorded a $10.0m charge to reflect an impairment to property, plant and equipment and other closure costs.
A sales presence was to be retained in-country to support new business opportunities.
The Hunting board said its restructuring and cost containment initiatives continued throughout the year, with the closure of five operating facilities in the Netherlands, Singapore, South Africa, the UK and the US.
It also closed five distribution centres.
Suspension period bank covenants were lifted during the year, with the removal of financial restrictions completed in January.
The original covenants based on EBITDA, net interest and net debt had now been reinstated.
Capital investment controls remained in place, the board confirmed, with capital investment during the year down to $11.4m from $17.2m in 2016.
A number of senior leadership changes were completed during the year as well, with the promotion of Jim Johnson to chief executive in September and the appointment of Jay Glick as chairman, also in September.
"The group's results for 2017 have been supported by an exceptional performance by Hunting Titan, leading to Hunting reporting a return to underlying profit for the year as a whole," said chief executive Jim Johnson.
"Onshore drilling and completion activity in the US shale basins has led the strong recovery for those businesses within Hunting focused on this market.
"Elsewhere across the group, cost cutting initiatives and general market stability have helped narrow losses."
Johnson said the board was "pleased" to have completed the process of exiting its suspension period bank covenants.
"While the company is not proposing a dividend in respect of the 2017 financial year, shareholder distributions will be considered, subject to the group's current performance being sustained."