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(Alliance News) - Hunting PLC on Thursday said it will still pay out an interim dividend despite the oil industry being left "devastated" following the oil price slump in the first half of 2020.
The provider of services to oil and gas companies saw a pretax loss from operations in the half year ended June 30 of USD185.4 million, swung from a profit of USD40.1 million a year prior.
Revenue was down to USD377.7 million from USD508.9 million the year before.
The London-based company said that its first quarter performance was in line with expectations, but the decline in the global oil price "devastated" the industry - first within the US inshore market followed by the US offshore and international markets.
In response, Hunting cut costs. Two manufacturing facilities at Oklahoma City and Ramsey Road, both in Houston, started winding down for closure, and Hunting also closed a manufacturing facility in Canada. It also closed four distribution centres in the US and Canada and plans to amalgamate facilities in Singapore.
Altogether, Hunting cut its workforce by 624 to 2,332 as of June 30.
Hunting declared a second interim dividend of 2.0 US dollar cents due to a strong balance sheet and healthy cash position. This was however down from 5.0 cents a year prior.
Hunting has a total cash of USD48.8 million, down from USD127.0 million at the end of 2019, and USD160 million in undrawn credit facilities at June 30.
Chief Executive Jim Johnson said: "Further, with a strong balance sheet and cash position, along with an undrawn borrowing facility, the group will be able to respond rapidly to any improvements in activity and any market opportunities, as and when they arise going forward."
Outlook for the rest of the year is still uncertain, Johnson said, as Covid-19 protocol changes daily.
He said: "However, enquiry levels have improved with the increasing average oil price and areas of the US onshore market indicate that the mid-point of the year could have been the bottom of the cycle, with cautious steps being taken by our clients to incrementally restart operations. Management anticipates an improving fourth quarter of 2020, subject to the impact of the pandemic remaining materially unchanged from the current position."
Hunting shares were up 7.3% at 186.60 pence each on Thursday morning in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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