Hunting (LSE:HTG) announced on Wednesday that it had cut its full-year EBITDA guidance to $128-133m, down from the $138-141m range it set out in August, after the deepening conflict in the Middle East hit trading in the third quarter and into the fourth.
The London-listed precision engineering group, which supplies tools and equipment to the oil and gas industry, said year-to-date EBITDA stood at approximately $89m, with an EBITDA margin of around 12%.
Chief executive Jim Johnson said the group's long-term fundamentals remain robust, including continued strong trading in its Subsea-focused businesses, but that "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."
Hunting Titan's third-quarter performance ran marginally behind its projected outturn, with a notable slowdown in Middle East deliveries and some softening in North America that is likely to persist through year-end, though the division will still deliver robust year-on-year growth.
The North America segment expects a fourth-quarter slowdown in OCTG activity, while the Electronics and Dearborn units within Advanced Manufacturing have seen a slower-than-planned recovery due to third-party supply chain issues reducing deliveries and delaying order completion.
The EMEA segment returned to profitability in the third quarter as restructuring, including the September closure of the Fordoun, Aberdeen site, began delivering cost savings, though it is still expected to post a small full-year EBITDA loss because of the Middle East disruption.
Asia Pacific has posted a lower year-to-date result on the previously flagged delay to the Kuwait Oil Company (KOC) tender and reduced regional tender activity, and is now expected to report a break-even result for the second half following a small first-half profit.
The KOC re-tender was published on 12 October, with a decision anticipated before year-end and product shipments due to begin in the second half of 2027; Hunting said it remains well-placed to secure further orders, building on its established relationship with the Kuwaiti customer.
Hunting previously flagged in August that the original tender delay would cut 2026 EBITDA by around $10m and push recognition of any new contracts into 2027.
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Total cash and bank balances stood at approximately negative $11m on 30 September, an improvement from negative $19m at the end of June, which the company attributed to strong operational cash conversion and working capital management; net assets stood at approximately $876m and working capital was around $399m, broadly unchanged on the half-year position.
The interim dividend of 7.0 cents per share, declared in August, will be paid on 30 October and will absorb around $10m, while the share buyback programme is expected to use approximately $42m for the full year and capital expenditure is now guided at $35-45m.
Hunting said year-end cash and bank balances are now expected in the range of $40-45m, down from the $50-60m projected at the half-year.
The board's search for a successor to Johnson, who is retiring, has progressed to interviews with a shortlist of internal and external candidates planned for the fourth quarter.
Hunting's next trading update is scheduled for Tuesday 19 January 2027.