(Reuters) - Oilfield services provider Hunting Plc HTG.L on Thursday reinstated its dividend and reported a profit for the first half of 2018 on stronger demand on the back of rising crude prices, sending its shares up more than 11 percent.
Hunting and other oilfield services providers are benefiting as energy producers spend more after a period of aggressive cost cuts spurred by a prolonged slump in oil prices.
Revenue at the company, which makes industrial components used to perforate oil and gas wells in preparation for production, jumped 39.2 percent to $442.8 million in the six months to June 30, beating an estimate of $423 million from Morgan Stanley analysts.
It said it saw an improvement in drilling in American onshore markets and predicted activity would remain at current levels till the end of the year.
It reported a $38.9 million profit from operations compared with a loss of $23.9 million a year earlier, underwriting an interim dividend of 4 cents per share.
“Hunting arguably has the strongest current performance of the European OFS (Offshore) space,” Barclays analysts wrote in a note on the results.
“With new products and capacity expansions to come and a non-U.S. market that is barely touched, the medium-term future looks to be rosy.”
Shares of the 144-year-old company were up 10.5 percent at 838.5 pence by 0717 GMT, topping performance on the London Stock Exchange's midcap index .FTMC.
The company said its Asia-Pacific, Canadian, European and Middle East operations, as well as its exploration and production units, remained loss-making, while flagging the possible impact of trade tariffs on the industry.
“It is likely that geopolitical and international trading headwinds, including ongoing inter-government dialogue on trade tariffs, will continue to suppress the rate of recovery, particularly within international markets,” the company said in a statement.
Hunting Titan, the group’s unit that operates mainly in the U.S. Permian basin, is investing to increase production capacity at its Milford and Pampa equipment manufacturing facilities, the company said.
A number of processes in the manufacture of perforating guns and energetic charges are being automated to improve efficiencies and cut costs, the company said.
Reporting by Muvija M in Bengaluru; Editing by Sai Sachin Ravikumar/David Evans
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