Hunting (LON:HTG)
Yesterday afternoon Hunting (LON:HTG) released a particularly negative trading update further to its downbeat trading statement earlier in April, which painted an uncertain outlook for the company. In this update HTG confirmed that weak performance in Q1 has continued throughout April and May, which does not come as a surprise. Indeed its share price fell 12% yesterday.
HTG now estimates that FY 2016 earnings will decline 30-40% YoY (FY 2015: US$810.5m). In the four months to end of April HTG made an underlying EBITDA loss of US$16.2m. Management continues to implement cost saving measures as it looks to reduce its debt. Its net debt has fallen to US$105m since the last trading update with net assets remaining cUS$1.1bn. HTG has also confirmed that it is in discussions with its lenders as it looks to renegotiate its EBITDA based bank covenants and we await further updates on this.
We maintain our bearish outlook on the entire oil services industry which is likely to continue to suffer in 2016 despite the recent gains in the oil price