ADNOC Drilling announces strong first quarter earnings growth for 2023

ADNOC Drilling Company PJSC has announced strong financial results for the first quarter ending March 31, 2023.

ADNOC Drilling’s first quarter revenue increased to $716 million, up 19% year-on-year. Revenue growth was achieved across all segments, with Offshore Jack-up and Oilfield Services (OFS) leading the way, increasing 28% and 43% respectively.

EBITDA growth tracked the uptick in revenue, also increasing 19% to $333 million. Net profit for the quarter reached $219 million, up 25% year-on-year, the company said in a statement.

First quarter 2023 revenue was 2% lower than fourth quarter 2022 due to fewer calendar days and lower impact from reimbursement of cost escalation claims. These drivers brought EBITDA sequentially down by 6%, ADNOC Drilling said.

ADNOC Drilling continues to capitalise on its unique position as a critical enabler of ADNOC’s plans to responsibly accelerate production capacity growth, as global demand for energy continues to rise.

Abdulrahman Abdullah Al Seiari, Chief Executive Officer, ADNOC Drilling, commented: “Our first quarter results are particularly pleasing as they clearly demonstrate the effective execution of our strategy, to grow earnings by expanding our fleet and our offering, for the benefit of our customers and our shareholders.

“To maximise value for shareholders now and into the future, we will continue to secure high-quality, long-term contracts that offer superb future earnings visibility, as well as protection against market volatility. At the same time, we will maintain our focus on operational excellence and sustainable operations, as well as capitalize on our unique position within the market as we remain firmly on track to deliver our 2023 guidance.”

Among the highlights of the results was strong growth for Offshore Jack-up and OFS segments. Onshore revenue was significantly higher than in the prior year, as a result of eight new land rigs entering the operational fleet in the second half of 2022. First quarter 2023 revenue stood at $355 million, up 11% year-on-year. Revenue decreased sequentially, as the fourth quarter of 2022 benefitted more than the first quarter 2023 from reimbursement of cost escalation claims, particularly on diesel prices, the company said.

For Offshore Jack-up, revenue came in at $184 million, up 28% compared to the prior year period, due to introduction of five new jack-ups into the operational fleet in the second half of 2022. Revenue increased sequentially by 2% versus fourth quarter 2022. For Offshore Island, revenue remained steady at $51 million, broadly stable versus the previous quarter and year-on-year.

In the OFS segment, revenue grew to $126 million, up 43% year-on-year, due to increased activity volume across the entire portfolio. Revenue increased sequentially by 2% versus fourth quarter 2022, the company said.

ADNOC Drilling also reiterated its fiscal year 2023 guidance communicated in February 2023, to deliver revenue of between $3.0 - $3.2 billion for the full-year period, with EBITDA of $1.35 - $1.5 billion at an industry-leading EBITDA margin of 45% - 47%, and net income of $0.85 - $1.0 billion. Capital expenditure is forecast to be in a range of $1.3 - $1.75 billion this year, while the Company plans to maintain the leverage ratio below 2.0x, it said.