Hunting has adjusted its profit forecast for the year due to declining oil and gas prices and a slowdown in the US onshore market.

The FTSE 250 oil and gas services firm indicated that its adjusted earnings are expected to fall approximately 8 percent short of previous estimates, now projected to be between $123 million and $126 million, compared to earlier guidance of $134 million to $138 million.

The decline is primarily attributed to the Titan segment, which offers services to the American onshore sector and has been adversely affected by the drop in oil and gas prices, uncertainty surrounding the US elections, and ongoing consolidation within the industry.

Over the past year, the price of the one-month Henry Hub contract has seen a reduction of around 20 percent, currently standing at $2.35 per million British thermal units.

Expectations for the Titan division, which was anticipated to be profitable, have shifted to a forecast of break-even during the third quarter. This change comes after a lack of expected improvements in trading conditions, with poor performance projected to persist throughout the remainder of the year.

In response to the market downturn, the company plans to reduce sales and administrative expenses, which includes closing some of its twelve distribution sites across North America.

The profit guidance for the upcoming year is set to be provided during the company’s market update on fourth-quarter performance in January. Analysts from Investec have adjusted their earnings forecast for next year downwards by 10 percent to $155 million, reflecting the challenging trading environment.

A record $145 million contract for supplying pipe connection services for oil and gas drilling to the Kuwait Oil Company in May had initially encouraged the company to enhance its profit projections. Cash from this contract is expected to increase the net cash on Hunting’s balance sheet to between $60 million and $70 million by year-end, doubling the figure reported in mid-October.

Share prices dropped significantly, falling by 67p, or 18 percent, to 306p in morning trading, making it the largest decline on the mid-cap index, before closing down 16.5 percent, or 61.5p, to 311.5p.

Despite the challenges faced by the Titan division, the rest of Hunting’s four operating segments performed in alignment with market expectations, with adjusted earnings increasing by 16 percent over the first nine months of the year.

Previously, the group experienced substantial setbacks due to Covid-19, reporting total losses of $60 million during 2021 and 2022 following a downturn in the oil market. Nonetheless, it rebounded to achieve a pre-tax profit of $50 million last year, with revenues climbing to $929 million from $726 million the previous year.