Adnoc Drilling records robust results for 2023 as net profit increases by 29%

Gulf Today, Staff Reporter

Adnoc Drilling Company on Monday announced its financial results for the fourth quarter and full year ending December 31, 2023. Full-year EBITDA was $1.5 billion, with a margin of 49%, as the Company continues to make excellent progress on the delivery of cost efficiencies. Net profit for the twelve-month period was a record $1.03 billion, up 29% year-on-year.

Revenue for the full year was $3,057 million, up 14% year-on-year EBITDA for the full year increased by 20% to $1,483 million with industry-leading EBITDA margin of 49%.

Net profit for the full year increased by 29% year-on-year to $1,033 million with a margin of 34%.

Abdulrahman Abdulla Al Seiari, Chief Executive Officer of Adnoc Drilling, commented: “Over the past twelve months we have further demonstrated the strength of our unique business model, that directly benefits from Adnoc’s five million barrel per day capacity target, and has delivered outstanding business growth and results. Our ambitious fleet expansion strategy coupled with the accelerated growth of Oilfield Services has delivered exceptional bottom line performance, beyond the expectations of the market.

Looking ahead, Adnoc Drilling will remain dedicated to driving further efficiencies in our operational and financial performance, as we deliver enhanced value to our customers and shareholders.”

The company achieved record revenue, EBITDA and net profit during the fourth quarter of 2023, driven by the highest-ever number of operational rigs, bolstering growth and charting a clear course for further expansion in 2024 and beyond.

During the fourth quarter of 2023, Adnoc Drilling delivered quarterly revenue of $841 million, up 15% year-on-year, EBITDA of $424 million, up 20%, and net profit of $329 million,up 41%.

The company added 14 new drilling units in 2023, including four lease-to-own land rigs, establishing one of the world’s largest owned and operated fleets consisting of 129 rigs. Adnoc Drilling’s revenue for the year increased to $3.06 billion, up 14% year-on-year. Revenue growth was driven primarily by the Offshore Jack-up and Oilfield Services (OFS) segments, increasing 31% and 37% respectively. All segments grew year-on-year as the Company continues to execute on its fleet and OFS expansion strategy in support of the delivery of Adnoc’s production capacity target.

Revenue for the full year was $1.5 billion, up 3% year-on-year, due to the contribution of new rigs which more than offset lower reimbursement of cost escalation claims. 4Q23 revenue was up 10% to $416 million, due to an increase in drilling activity.

Revenue for the full year was $800 million, a 31% increase compared to 2022, reflecting new jack-up rigs joining the operational fleet. 4Q23 revenue was $225 million an increase of 25% due to higher activity.

Revenue for the full year increased by 2% versus 2022 to $209 million, driven by mobilization revenue for the re-activated island rig. 4Q23 revenue was $52 million, up 2% compared to 4Q22, driven by increased activity.

Revenue for the full year was $553 million, an increase of 37% year-on-year on the back of increased activity volume across the entire portfolio. 4Q23 generated record quarterly revenue of $148 million, driven by increased activity from pressure pumping, drilling fluids, and directional drilling.

Adnoc Drilling reported a fleet availability rate of 96%1 for the year ending December 31, 2023, delivering exceptional revenue efficiency. Cash from operations2 decreased 11% year- on-year to $1.4 billion supporting a free cash flow of $306 million. Full-year 2023 capital

During the year, the company partnered with Alpha Dhabi Holding PJSC (Alpha Dhabi) to create Enersol, a strategic joint venture (JV) targeting value-accretive technology-enabled oilfield and energy service businesses globally across the OFS and energy value chain. The JV, of which the Company owns 51% of, underpins Adnoc Drilling’s market-leading position as an integrated drilling services provider, powering its growth and expansion strategy by co- investing up to $1.5 billion across OFS and energy sectors.

The Board of Directors recommends a final dividend payment of $358 million for 2023 (8.22 fils per share), subject to shareholder approval at the upcoming Annual General Meeting (“AGM”). The total dividend for 2023 equals to $717 million (16.45 fils per share), representing a 5% year-on-year increase versus 2022. The final 2023 dividend is expected to be distributed in the first half of April 2024.

The company expects total revenue between $3.60 to $3.80 billion, EBITDA of $1.70 - $1.90 billion, with a margin range of 48% - 50% and Net Profit of $1.05 - $1.25 billion, with a margin range of 30% - 33%. Moreover, ADNOC Drilling expects CapEx to be between $0.75 - $0.95

Adnoc Drilling is the largest drilling and well completions company in the Middle East by fleet size, owning and operating one of the largest multi-discipline drilling fleets in the world. The Company is a critical link in ADNOC’s upstream business, as ADNOC responsibly accelerates its production capacity targets in light of globally increasing demand for energy and enables gas self-sufficiency for the UAE. ADNOC Drilling incorporated Integrated Drilling Services into its portfolio in 2018 and now offers a total solution of start-to- finish wells and associated services that encompass the entire drilling value chain.