Hunting (LON:HTG) reported first-half revenue of $497 million and EBITDA of $62.1 million, representing a 12% EBITDA margin, as growth in its Titan perforating and subsea businesses helped offset disruption to a major Kuwait Oil Company tender process.
Bruce Ferguson, Group Finance Director, said the company’s first-half results excluded Kuwait Oil Company, or KOC, revenue included in the prior-year comparison. Hunting reported profit after tax of $24.8 million and earnings per share of $0.152, compared with $0.196 previously. Non-oil-and-gas revenue rose year over year to $38 million.
Titan and Subsea Drive Performance
Management highlighted a turnaround at its Hunting Titan perforating business, citing sales, cost, supply-chain and technology improvements. Ferguson said Hunting Titan revenue increased 45% year over year, supported by U.S. activity and higher international sales, including business in Argentina and the Middle East.
Hunting said Titan’s international business increased about 50% year over year. Management also said it had maintained margins despite higher input costs, including a 500% year-over-year rise in tungsten prices. Titan recorded $83 million in second-quarter sales, and Ferguson said sales and margins were expected to continue improving in the second half.
Subsea revenue increased 95% year over year, with $50 million attributed to the acquisition of Flexible Engineered Solutions. Management said the subsea portfolio has become Hunting’s highest-margin business and contributed to the group’s improved margin profile. The company pointed to activity in Guyana, offshore markets and demand for subsea trees as key drivers.
Management said it had secured a $16 million order from a new Gulf of America customer for titanium stress joints, displacing a competing solution. Hunting is also pursuing opportunities for the product in West Africa.
Hunting’s North American OCTG business was described as steady, while its Advanced Manufacturing operations benefited from changing customer mix, increased electronics activity and Titan-related manufacturing volumes. At the Dearborn operation, management said non-oil-and-gas customers accounted for as much as 90% of recent business, with aerospace, defense and power-generation demand contributing.
Kuwait Tender Cancellation Reduces Outlook
The company said KOC canceled the full set of tenders for which Hunting had been positioned to receive awards worth more than $300 million. Management said the conflict affecting the Middle East and challenges associated with transporting materials through the Strait of Hormuz led KOC to request revised pricing and delivery schedules before ultimately canceling the process.
Hunting had received a $20 million purchase order for one line item before the cancellation. Management expects the original tenders to be reissued within about 60 days, but said the resulting activity would now be a 2027 event.
KOC has also issued a separate tender for another field, valued at approximately $120 million to $180 million, which Hunting expects to bid on within 60 days. Deliveries under that tender are scheduled to begin in June of the following year, according to management.
Ferguson said the KOC delay prompted Hunting to reduce its EBITDA guidance by roughly $10 million. The company now expects full-year EBITDA of $138 million to $141 million, with EBITDA margins of 12% to 13%. Management reiterated its target of reaching a 15% EBITDA margin over time.
Hunting said the disruption has also affected tender activity in Bahrain, Iraq and Qatar, where transport constraints have complicated the delivery of pipe. Still, management said projects in the region have not disappeared and that it remains optimistic about its technology, customer relationships and “virtual mill” supply approach for future Kuwait opportunities.
Order Book, Cash Flow and Capital Spending
Hunting ended the first half with an order book of $386 million, with $260 million expected to be booked during 2026. The company also cited a tender pipeline of just under $1 billion.
The company’s working capital increased by approximately $60 million during the first half, primarily due to receivables that rose to $293 million. Ferguson said the increase reflected strong June trading and work on larger subsea contracts, and he expects the working-capital build to unwind in the second half.
Cash flow was also affected by a one-off import tax payment. Hunting reported net borrowings of $19 million, which Ferguson characterized as low relative to EBITDA. The company expects capital expenditures of $40 million to $50 million for the year and continues to forecast 50% free-cash conversion.
Management said it has nearly completed consolidation of European facilities within EMEA and expects additional efficiency gains as it combines international operations. The company also cited a 24% reduction in headcount compared with 2019 and the use of artificial intelligence in some back-office processes.
International and Non-Oil-and-Gas Opportunities
Management said it sees opportunities in international unconventional development, particularly in Argentina and Saudi Arabia, while identifying Algeria, Mexico, Australia and the United Arab Emirates as potential growth markets. Hunting said its Saudi Arabian unconventional work has remained healthy despite Gulf-region disruption.
The company also cited growing power demand associated with data centers and artificial intelligence as supportive of natural-gas development and demand for its products. Hunting said its relationship with Caterpillar’s Solar division supports its power-generation exposure, and that it has invested capital at Dearborn to address changing manufacturing requirements.
In addition, Hunting said it continues to pursue geothermal opportunities, recently receiving an OCTG order involving premium connections for a geothermal project. Management said it also supplies perforating equipment into geothermal applications.
Hunting’s Organic Oil Recovery technology remains in trial and early commercial stages, with management citing positive results from Harbour and opportunities with Exxon and customers in Brazil and the Middle East. The company also sees decommissioning work, including Enpro products used with Shell in the U.K., as a growing business area.
About Hunting (LON:HTG)
Hunting is a global precision engineering group, which provides quality-assured products and services for the energy, aviation, commercial space, defence, medical, and power generation sectors.
Our strong focus on quality assured products, supported by rigorous health and safety procedures, ensures we assist in the delivery of energy safely and it is also the basis of our standing in this critical, global industry.
Our intellectual property portfolio enables the Hunting Group to maintain a leading technology edge, so that energy projects are delivered quicker and at lower cost with minimal impact on the environment.
Our people are our most important asset.
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