Hunting (LSE:HTG) has reduced its EBITDA forecast for 2026 after Kuwait Oil Company (KOC) indicated that a delayed tender will be re-run, adding further pressure following a weaker first-half performance in OCTG and Advanced Manufacturing.
First-half revenue and earnings decline
Revenue for the first six months of the year fell 6% to $497.0 million from $528.6 million in the same period of 2025. EBITDA decreased 12% to $62.1 million from $70.2 million, while the EBITDA margin contracted to 12% from 13%.
Adjusted profit before tax dropped to $34.5 million from $43.7 million, with adjusted diluted earnings per share declining to 15.2 cents from 19.6 cents.
Hunting said the year-on-year reduction largely reflected KOC orders that were completed during the first half of 2025 but were not repeated this year, alongside softer activity within Advanced Manufacturing.
Performance was stronger elsewhere in the portfolio, with Perforating Systems and Subsea Technologies delivering notable revenue growth supported by organic momentum. This helped partially offset weaker trading across OCTG, Advanced Manufacturing and other manufacturing operations.
Cash flow weakens as net debt rises
Free cash flow moved to an outflow of $27.8 million, compared with an inflow of $66.2 million a year earlier. Hunting ended the period with net debt of $51.4 million, against net cash of $44.7 million at the comparable point last year.
Return on capital employed also declined, falling to 9.1% from 10.5%.
Despite the softer financial performance, Hunting raised its interim dividend by 13% to 7.0 cents per share from 6.2 cents. The company said it continues to expect dividend distributions to increase by 13% annually through the end of the decade.
Portfolio transformation supports stronger divisions
CEO Jim Johnson, who has announced plans to retire, said the first-half performance demonstrated the benefits of Hunting’s portfolio transformation, pointing to strong margins in Subsea and record international sales from Perforating Systems.
Johnson also noted that instability in the Middle East had disrupted some tendering activity, although Hunting expects business in the region to recover quickly once greater stability returns.
Kuwait tender delay hits 2026 guidance
Hunting said KOC has indicated that it intends to re-run the OCTG tender process originally launched in April. The resulting delay is expected to reduce the group’s 2026 EBITDA by approximately $10 million.
As a result, Hunting has lowered its full-year 2026 EBITDA guidance to between $138 million and $141 million, slightly below its previous forecast. The company nevertheless expects to finish the year with a cash balance of approximately $50 million to $60 million.
Looking further ahead, Hunting continues to anticipate year-on-year growth in 2027. However, the KOC tender delay could have a maximum negative impact of around $10 million on the current 2027 EBITDA consensus forecast of $165 million.
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