LONDON (ShareCast) - (Sharecast News) - Energy services provider Hunting updated the market on its third quarter trading on Tuesday, reporting that challenging markets continued to be a feature of its industry, negatively impacting trading conditions and results in September, as it expected.
The FTSE 250 company said that in particular, a slow down within United States onshore completions had continued, which had been partially offset by ongoing improvements within its offshore and international operations, resulting in a net overall decline for group profit in the period compared to the first and second quarters.

As a result, the board said it was anticipating a full year EBITDA result at the lower end of market expectations, given current trading momentum and the overall product mix of results forecast for the balance of the year.

Revenue and operating profits within Hunting Titan for the third quarter were below those of the first and second quarters, the board reported.

It said sales of the 'H-1' and 'H-2 Perforating Gun Systems' continued to reflect a greater share of Titan's overall gun sales.

"New technology launched in the year, including the E-SUB Perforating System and T-Set One setting tool are seeing good customer adoption," the board said in its statement.

"Management continue to anticipate a slowing in drilling across North America in the fourth quarter, which will further impact the results for the second half of the year."

In the US segment, revenues were "generally stable" during the quarter, which Hunting out down to higher offshore and international market demand.

It said there had been a "strong performance" by the Advanced Manufacturing Group, and in particular the Hunting Electronics business, as demand for downhole measurement tools remained steady.

As it announced on 16 August, the company completed the acquisition of the business and assets of RTI Energy Systems.

"Integration of the business into the group's subsea operations is progressing, with new sales opportunities already being pursued," the board said.

"During the quarter $0.7m of acquisition costs relating to RTI were expensed within the income statement."

Within the Canada segment, losses had narrowed after new orders were secured with customers on a lower cost base, following the restructuring completed at the end of the second quarter.

In the Europe, Middle East and Africa geography, Hunting said that despite higher activity levels in the North Sea, a small operating loss was reported in the quarter.

Asia Pacific also reported a small loss, as international trade tensions dampen market sentiment.

"Overall the Group continues to deliver operating profits, generate cash and exercise ongoing cost discipline.

"Working capital is controlled and continues to report a modest reduction in inventory levels since year-end."

Capital spend remains modest and tax losses from prior years continue to shelter the group from any significant outflows of cash tax."

Net cash, excluding lease liabilities, at the end of the third quarter was $58.5m, and the board noted that the interim dividend of five cents per share, absorbing $8.3m, was paid on 23 October.

As at 0946 GMT, shares in Hunting were down 3.57% at 405p.

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