Hunting PLC is aggressively repositioning its portfolio to capture high-margin growth in subsea and perforating technologies, even as geopolitical instability and tender delays create short-term financial headwinds. The precision engineering group reported a 6% decline in H1 2026 revenue to $497.0m, down from $528.6m in H1 2025, and an EBITDA drop of 12% to $62.1m. These results reflect a transition period where strong organic growth in specialized segments is being offset by the absence of major orders, such as those previously completed for Kuwait Oil Company (KOC), and slower activity in the Advanced Manufacturing group. Despite these fluctuations, the company is leaning into its "2030 strategic ambition," leveraging recent acquisitions and high-performance equipment orders to stabilize long-term earnings quality. Management is currently navigating a complex global landscape, balancing the impact of Middle East instability against rising energy demand driven by AI-related power needs in North America and expanding offshore activity in South America and West Africa.
Subsea and Perforating Momentum Offsets Segment Weakness
The Group’s financial performance in the first half of 2026 reveals a stark divergence between its core product groups. The Subsea Technologies segment is delivering heightened margins, a trend the company attributes to recent order momentum and the integration of Flexible Engineered Solutions, which was acquired in June 2025. This subsea strength is further evidenced by a $63.5m order win for titanium stress joints for ExxonMobil in Guyana, scheduled for delivery by 2027. Simultaneously, the Perforating Systems group is seeing increased market share in North America and record international sales in regions including Australia, Argentina, Indonesia, and Saudi Arabia.
However, these gains were tempered by underperformance in other areas. The OCTG, Advanced Manufacturing, and Other Manufacturing groups reported lower results, contributing to the overall revenue dip. A significant factor in the EBITDA decline was the non-recurrence of specific orders from Kuwait Oil Company (KOC) that had bolstered H1 2025 figures. Furthermore, the company is managing a significant working capital outflow of $58.0m in H1 2026, compared to a $25.8m inflow in the prior year. This outflow is linked to forward material purchases within the Hunting Titan and Subsea Technologies segments, as well as increased receivables balances. To address cost pressures, Hunting is executing a restructuring of its EMEA operating segment—which includes closing facilities in the Netherlands, Norway, and the UK—aiming for $11m in annualized savings to return the segment to profitability by the second half of 2026.
Regional Energy Demand and Tendering Headwinds
Hunting’s outlook is heavily influenced by shifting energy security priorities and regional geopolitical risks. In the Middle East, ongoing conflict has caused delays in tendering processes. Specifically, KOC has indicated it will re-run its OCTG tender process, originally issued in April 2026, with an accelerated re-issuance expected in Q3 2026. The company estimates this delay will impact 2026 EBITDA by approximately $10m, leading to a revised 2026 EBITDA guidance range of $138m–$141m. While this creates near-term volatility, the company maintains confidence that activity in the region will recover once stability returns.
Beyond the Middle East, Hunting is positioning itself to capitalize on diverse global drivers. In North America, the company expects steady activity increases as AI-driven hyper-scalers and new data centers accelerate power demand. In South America, the company is targeting opportunities in Argentina’s unconventional resources and new offshore projects in Brazil, Guyana, and Suriname that require high-performance equipment. Additionally, emerging offshore opportunities in Angola and Namibia are expected to support growth in West Africa beyond the end of the decade. To streamline its global footprint, the company plans to combine its EMEA and Asia Pacific segments into a single International operating segment starting in January 2027, aiming to better align with customer requirements and improve commercial offerings.
Key Takeaways
- Hunting reported H1 2026 revenue of $497.0m, a 6% decrease from $528.6m in H1 2025, with EBITDA falling 12% to $62.1m.
- The company secured $63.5m in new titanium stress joint orders for ExxonMobil in Guyana, to be delivered by 2027.
- Revised 2026 EBITDA guidance has been set at $138m–$141m, following a $10m impact from delayed Kuwait Oil Company (KOC) tenders.
EnergyInsyte's Take
In our view, Hunting PLC is currently navigating a high-stakes transition from a broad engineering provider to a specialized high-margin technology player. The divergence in their H1 results—where Subsea and Perforating are thriving while OCTG and Manufacturing lag—suggests that the company's "2030 strategic ambition" is working, but the execution is being tested by external macro factors. The shift toward subsea technologies is a logical response to the global trend of offshore expansion in Guyana and Brazil, but the company's reliance on large-scale tenders, such as the KOC process, leaves it vulnerable to geopolitical volatility.
The $10m EBITDA hit from the KOC delay is a significant short-term drag, yet the company’s decision to increase the interim dividend to 7.0 cents per share signals management's confidence in its underlying cash-generating ability once working capital investments unwind. For investors and partners, the critical metric to watch will be whether the EMEA restructuring and the consolidation of the International segment can successfully offset the cyclicality of the OCTG market and the current working capital pressures.
Questions & Answers
How is the company addressing the recent decline in EBITDA and revenue?
Hunting is implementing a multi-pronged approach: executing a restructuring of its EMEA segment to capture $11m in annualized savings, initiating a $15m cost-reduction program by 2027, and pivoting toward higher-margin product groups like Subsea Technologies and Perforating Systems to improve the quality of long-term earnings.
What specific impact does the Middle East instability have on Hunting's 2026 guidance?
The instability has led to delays in the Kuwait Oil Company (KOC) OCTG tender process. This delay is expected to have a roughly $10m adverse impact on 2026 EBITDA, resulting in a revised guidance range of $138m to $141m, which is slightly below previous projections.
What are the primary drivers for Hunting's projected growth in North America?
The company expects activity levels in North America to increase due to the rising demand for energy and power, specifically driven by the expansion of data centers and AI-driven hyper-scalers.
How is Hunting managing its capital allocation and shareholder returns?
The company is maintaining its capital allocation strategy, which includes a $40m share buyback program (due for completion by March 2028) and a commitment to increasing interim dividends by at least 10% annually through the end of the decade.
Source: Businesswire
