Hunting PLC

("Hunting" or "the Company" or "the Group")

Q3 2021 Trading Update

Hunting PLC (LSE : HTG), the international energy services group, today issues a Q3 2021 trading update.

Jim Johnson, Chief Executive of Hunting, commented:

"Global energy markets continue to strengthen as demand recovers from the effects of COVID-19. Oil and natural gas prices have reached levels last seen in 2014.  The combination of production discipline from OPEC+ and the capital discipline being exercised by US onshore producers have helped restore the supply demand balance, with the near term outlook tipping towards an under supplied market and demand pushing future commodity prices even higher. As a result, the macro economic outlook continues to improve.  However, during the quarter, we faced weather and sporadic COVID-19 disruptions that weighed on both operating efficiencies and activity levels. Hurricane Ida took several operations in Louisiana offline for three weeks and disrupted our customers' offshore activities in the Gulf of Mexico. COVID-19 continues to disrupt our operations, and continues to create supply chain disruptions that have impacted global supply chain networks.  Despite the impact of these extraordinary events, we are encouraged by the strengthening fundamentals in the energy sector. The recent IEA forecast for demand for oil and natural gas further underscores our belief that we are in the early stages of a strong, multi-year recovery that, although slow and steady in Q3 and likely Q4, will accelerate in 2022. 

"Whilst our focus continues to be on improving operational efficiencies and profitable growth within our core product portfolio, we continue to pursue adjacent investments in technologies that are within our defined core competencies of metallurgy and precision manufacturing.  Our investment in Cumberland Additive, during the quarter is the latest example of that strategy.  With that investment, Hunting is partnering with an exciting business which provides innovative manufacturing solutions to customers. All of our main business groups are planning synergistic initiatives with Cumberland to commence in the coming months. To expand our geographic footprint, Hunting is also developing its plans in India, with a closer business partnership with Jindal SAW being pursued to enable the Group to access the high growth Indian OCTG and accessories manufacturing market.

"In summary, management now anticipate the Group's EBITDA result for the 2021 full year will be broadly breakeven due to a combination of the above factors. However, the initiatives we have undertaken while the market was depressed by the impact of the pandemic have positioned the company well for the recovery that is beginning to manifest itself."

Trading Update

During Q3 2021 the Group has generated a broadly break-even EBITDA result given the ongoing subdued trading conditions. The Group continues to report a strong cash position of c.$84.3m, before lease liabilities, as at 30 September 2021.

Hunting Titan's performance continues to strengthen as US onshore completions activity maintains its growth profile. The segment has traded comfortably ahead of management's expectations throughout 2021 as activity levels within the key shale basins have continued to accelerate as the year has progressed. Our pricing increases announced in September 2021 have also held with clients, as activity continues to stabilise. The Group's Subsea business units continue to see steady demand for its products, with growing interest from clients operating in Brazil.

The Group's North America segment has been impacted by Hurricane Ida, with operations in Louisiana ceasing for between two to three weeks. Management's efforts have been focused on providing essential supplies to our employees in the region, with nearly every member of staff being impacted by the hurricane. The Group's operating sites were for the most part unaffected by the hurricane, however, operations were curtailed due to a displaced workforce and a lack of electricity throughout the area following the storm. Management anticipate that activity levels in the Gulf of Mexico will remain subdued for the majority of Q4. Elsewhere across the Group, trading within the EMEA and Asia Pacific segments remains challenging, given the general market conditions and the reluctance of operators to increase activity as COVID-19 concerns compound an anaemic drilling response, despite higher commodity prices being recorded.

The Group has also progressed discussions on a new Asset Based Lending facility, which will replace our existing $160 million revolving credit facility. Subject to the successful completion of these negotiations, the new credit arrangements will provide Hunting with access to a facility of up to $200 million, which will materially increase the Group's liquidity and borrowing capacity, enabling our businesses to meet the anticipated industry recovery.

In September/October 2021, the Group spent c.$2.9m on purchasing 1.0m Ordinary shares, for transferring to Hunting's Employee Benefit Trust.

Inventory levels at the end of the quarter were c.$266.3m, reflecting continued strong capital discipline.

On 29 October 2021, the Group will pay the previously announced 2021 interim dividend of 4.0 cents per share, which will absorb c.$6.4m cash.

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Notes to Editors:

About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.

The Group reports in US dollars across four segments: Hunting Titan, North America, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.