February 27, 2020 / 8:16 AM / a month ago

UPDATE 1-Hunting's annual core profit slips on weak shale demand

(Adds background on unit's revenue, 2020 outlook)

Feb 27 (Reuters) - Oil industry manufacturer and services provider Hunting Plc reported a small drop in its annual core profit on Thursday, as weak North American shale activity countered strong performances in Asia Pacific and the Middle East.

Declining U.S. shale activity and oil and gas investors' push for higher shareholder returns rather than more drilling activity amid volatile prices have weighed on demand for oilfield services.

The world's largest oilfield services firm, Schlumberger , has said it would reduce its active fracking fleets by 50% and would cut jobs, sell assets and idle equipment to improve its North American margins.

"The outlook for 2020 remains uncertain, as over half of all operators have yet to publish budget spend guidance due to continued uncertainty over commodity prices", Hunting said.

The British firm in December signalled clients would invest less in 2020 and said revenue and operating profit for its biggest unit, Hunting Titan, had slipped at the start of the fourth quarter due to slowing U.S. onshore drilling.

The unit's revenue fell 10.2% to $375.5 million in the year ended Dec. 31, while it jumped more than 35% in its Asia Pacific division.

Hunting, which manufactures a wide range of tools and solutions used in oil and gas exploration, said annual underlying earnings before interest tax and depreciation fell to $139.7 million, from $142.3 million a year earlier.

Analysts on average had expected core profit of $138.10 million, according to IBES data from Refinitiv.

Reporting by Shanima A in Bengaluru; Editing by Sriraj Kalluvila

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