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(Sharecast News) - Energy services company Hunting cut its full-year profit guidance on Wednesday as it pointed to disruption from the conflict in the Middle East.
Hunting now expects FY earnings before interest, tax, depreciation and amortisation of between $128m and $133m, down from guidance of £138m to $141m given in August. It cited the ongoing conflict in the Middle East and some slowing of activity across other markets.
The company said year-to-date EBITDA was around $89m, reflecting the results from the operating segments/product lines of the group, with an EBITDA margin of approximately12%.
Hunting Titan's performance in the third quarter was marginally behind its projected outturn. Hunting said that since the start of the current trading quarter, the operating segment has experienced a notable slowing in deliveries to the Middle East and some slowdown in North America, which will likely extend to the end of the year.
The North America operating segment also expects a slowdown in OCTG activity across the region in Q4.
Meanwhile, the EMEA operating segment returned to profitability in Q3 as the completion of the restructuring, including the closure of the Aberdeen operating site in September, began to deliver cost savings. However, due to the situation in the Middle East, the segment is likely to report a small EBITDA loss for the year as whole.
Chief executive Jim Johnson said: "Whilst the long-term fundamentals of our end-markets remain robust, which includes ongoing strong trading results within our Subsea-focused businesses, the protracted and deepening nature of the conflict in the Middle East has impacted our overall results in Q3 and into Q4, with a deterioration in the short-term trading outlook seen in recent weeks.
"The directors believe that there is significant upside within the Middle East once hostilities cease. However, OCTG and other product line tender activity across the region remains challenged at present by logistical issues and continued attacks on shipping and regional infrastructure. Rig activity in Saudi Arabia has declined, reducing activity levels in the Jafurah unconventional development, affecting trading within Hunting Titan."
At 0915 GMT, the shares were down 12% at 375p.
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