The Caspian Sunrise (LSE: CASP) share price has continued its sharp descent on Tuesday afternoon. At 2.2p, the UK energy share is now 5% lower from last night’s close and the worst daily performer on the AIM market.
Caspian is plummeting after announcing a hefty pre-tax loss for 2020 thanks to a $2.6m impairment charge. Full-year losses clocked in at $1.7m, the oil producer swinging from a profit of $941,000 the year before.
This offset an 18% year-on-year revenues improvement in 2020, Caspian said. Income jumped to $14.3m as production increased almost 8% from 2019 levels to 545,667 barrels. Higher output at Caspian’s flagship MJF structure helped to offset the loss of its South Yelemes structure, which has been shuttered since May due to “a slow moving licence upgrade application.”
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Finally, Caspian said it had cash of just $300,000 on its books as of December, down from $4.1m a year earlier. As a consequence it warned investors that “the financial outlook has improved when compared to the position 12 months ago but not yet to the point where the material uncertainty in respect of going concern… has fully receded”.
Hunting also dives
Hunting’s (LSE: HTG) share price has also slumped on Tuesday. At 238p per share the engineering stock’s 3% dip is less marked than the drop endured by Caspian Sunrise today. Though the company had dipped to its cheapest since early February at around 217p earlier.
Investors headed for the exits after Hunting predicted a “modest loss” for the first half of 2021. It said that “Hunting Titan and the group’s onshore businesses have traded ahead of expectations” in the six months to June. But it added that “this has been more than offset by a lower performance from Hunting’s offshore and international businesses”.
As a consequence, the business — which manufactures tools to help oil companies extract the commodity — thinks that full-year earnings before interest, tax, depreciation and amortisation (EBITDA) will fall short of expectations. Hunting added, however, that earnings should beat the $26.1m result punched in 2020.
UK share tips imminent recovery
Hunting said that “while there has been an increasing onshore rig count across North America, operators continue to demonstrate strong capital discipline”. This led to drilling expenditures “remaining subdued” in H1. And the pricing environment was deflationary across all product lines in the oilfield services sector due to market oversupply.
Still, Hunting believes trading will begin to improve in the second half of 2021. It says that improved oil prices per barrel should bolster capital expenditure levels among its clients and mean better demand for its services.
“With the oil price firmly above $70 per barrel, along with the production discipline seen within the OPEC group and the improving global economic outlook, management expect a gradual improvement in hydrocarbon demand in the short-to-medium term,” it noted.
