Hunting shares plunge after announcing Q3 update, securing new $300M credit facilities

LONDON - Hunting PLC (LSE: HTG), a global engineering company specializing in the energy sector, has announced a positive third-quarter performance with a year-on-year increase in EBITDA of approximately $87 million, marking a 16% rise. Additionally, the company secured $300 million in new borrowing facilities to bolster its growth strategy.

Shares plunged following the announcement, with the stock down 19% by 12:03 PM London Time.

The Q3 results, ending September 30, 2024, revealed a robust sales order book valued at around $652 million, supported by contracts in OCTG and Organic Oil Recovery (OOR). The company's total cash and bank balance at the end of the quarter stood at approximately $4.6 million, reflecting strong receivables collections.

Hunting began shipping its OCTG with SEAL-LOCK™ technology to the Kuwait Oil Company, contributing to the quarter's earnings. Despite a challenging US onshore market and low natural gas prices affecting its Hunting Titan segment, the company has planned cost-cutting initiatives to align the business with current market conditions.

The new borrowing facilities, finalized on October 16, 2024, include a $200 million revolving credit facility and a $100 million term loan, replacing a $150 million Asset Based Lending facility. As of today, Hunting has approximately $393 million in liquidity available for acquisitions and growth opportunities.

The company has adjusted its full-year 2024 EBITDA guidance to between approximately $123-$126 million, an 8% decrease from previous estimates, due to lower expected client activity in certain product groups. However, year-end cash and bank balances are projected to significantly increase, potentially reaching between $60-$70 million, driven by accelerated receivables from KOC contracts.

Jim Johnson, CEO of Hunting, expressed confidence in the company's diversified product portfolio and its strong relationship with KOC. He also highlighted the liquidity available for pursuing growth in the energy sector and beyond.

Despite a reduction in EBITDA guidance, the company's strong order book and tender pipeline, along with its focus on acquisition targets in subsea and well completions, support a positive outlook for 2025.

Hunting's next trading update is scheduled for January 14, 2025. This report is based on a press release statement from Hunting PLC.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Source: Investing.com