Hunting Eyes Better Second Half after Weather Setback
LONDON, Aug 29 (Reuters) – Energy services firm Hunting said increased drilling in onshore United States and the Gulf of Mexico would drive a second-half recovery after poor weather earlier in the year curbed operations in Canada and dented margins.
Hunting, which provides equipment and services for drilling and completing oil wells, posted core first-half profit (EBITDA) down 2.7 percent at 75.6 million pounds.
"Canada was a mess with flooding and freezing conditions, so that put a halt to any rig movement at all," Finance Director Peter Rose told Reuters in a phone call.
Hunting shares were down about 1.5 percent in early trade but analysts described the results as encouraging.
"The good news is that activity has picked up as the year has progressed, such that we expect to see a much stronger second half than first half," analysts at Barclays said in a note.
The stock is ahead 9.5 percent this year, outperforming a sector hit by project delays and profit warnings at the likes of Saipem, Aker and Subsea 7.
Hunting said that increased drilling in onshore United States and the Gulf of Mexico, as well as a pick-up in the North Sea, should ensure it hits revenue and profit consensus for the year.
First-half revenue of 424.4 million pounds ($659.34 million) was up 4 percent compared with the same period last year and ahead of analyst expectations of 399.4 million.
The company said strong performance from Hunting's divisions in Asia offset difficulties in North America.
Hunting is betting on Africa to provide long-term growth and is investing in a manufacturing and maintenance facility in Cape Town, South Africa, to supply the regional market.
"The offshore East Africa hydrocarbon market we believe is the next big market," said Rose.
"If you look at a map of where Hunting has operations there's a big gap in Africa and we want to plug that."
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