Adnoc Drilling’s revenue rises 12% to $1.7 billion in 9 months

Adnoc Drilling Company on Wednesday announced its financial results for the third quarter and first nine months of 2021. In the first quarterly disclosure since its record listing on the Abu Dhabi Securities Exchange (ADX) in early October 2021, Adnoc Drilling delivered strong top line growth, with revenue increasing 12 per cent to $1.7 billion compared to the same period last year.

The company reported Ebitda of $785 million, surpassed targets, with a very healthy margin of 46 per cent, and net profit of $460 million for the period, up 9 per cent year-on-year. For the third quarter, Adnoc Drilling reported revenues of $571 million, up 11 per cent year-on-year, and Ebitda of $285 million, representing a 50 per cent margin in the quarter.

The onshore revenue for the nine-month period was $847 million, up 10 per cent compared to the same period last year, largely driven by new rigs and the reactivation of rigs in 2021. Third quarter 2021 revenue was $279 million, up 9 per cent year-on-year.

Offshore - Jackup revenue increased during the nine-month period to $450 million (Nine-Month 2020: $443 million), supported by an increase in operating activity of its jack-up rigs. Third quarter 2021 revenue was $157 million, down 2 per cent year-on-year. Offshore - Island revenue was up 11 per cent to $166 million for the first nine months of 2021 compared to the same period last year. Third quarter 2021 revenue was $61 million, up 45 per cent year-on-year.

Oilfield Services (OFS) maintained a robust growth trajectory, driven by higher activity as the segment continued its expansion. Revenue for the nine-month period increased 50 per cent year-on-year to $231 million. Third quarter 2021 revenue was $74 million, up 32 per cent year-on-year.

Ebitda for the nine-month period was $785 million, up 11 per cent year-on-year and beating expectations, demonstrating sustained resilience throughout the period, despite COVID-19 related disruptions continuing through the period.

Adnoc Drilling’s Ebitda margin of 50 per cent reflects the company’s commitment and continued focus on driving efficiency throughout the business, highlighted by its industry-leading fleet utilisation rate of (95.5 per cent 2) as of 30th September 2021. Adnoc Drilling continued to deliver highly attractive cash flow generation during the period, with cash from operations 1 increasing 15 per cent year-on-year to $823 million, equating to 105 per cent of Ebitda.

Capital expenditure for the nine-month period increased four-fold on a year-on-year basis, to $454 million in 2021. These investments will support the ambitious growth of the company’s OFS expansion operations and rig acquisitions, with these new rigs expected to commence operations in 2022.

Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, Adnoc Managing Director and Group CEO, and Chairman of Adnoc Drilling, said, “With double-digit revenue growth, Adnoc Drilling has demonstrated exceptional financial performance and commercial resilience, reflected in a very robust third-quarter. These impressive results follow Adnoc Drilling’s record ADX listing in early October, and were well above market forecasts.

“Adnoc Drilling sits at the heart of Adnoc’s ambitious growth plans and is critical in enabling Adnoc to achieve its significant production capacity growth targets and help the UAE achieve gas self-sufficiency. Adnoc will remain a committed, long-term majority shareholder in Adnoc Drilling as the Company continues on its exciting growth trajectory while delivering attractive returns for shareholders.”

Abdulrahman Abdullah Al Seiari, CEO of Adnoc Drilling, said, “Coming shortly after our landmark IPO, these very strong financial and operational results underpin an ambitious growth plan that is built on the quality and diligence of our people, who have worked tirelessly to achieve safe and efficient operations while at the same time growing our business.

Adnoc Drilling remains active in a number of mega-tenders in Abu Dhabi, while also pursuing the further expansion of its discrete services portfolio and increased market share in the OFS segment. If awarded, these tenders will expand the Company’s portfolio outside of the Integrated Drilling Services (IDS) segment, with awards expected during 2022.

In October, following the success of its heavily oversubscribed IPO on ADX, Adnoc Drilling was included in three of FTSE Russell’s globally recognised indices including the FTSE Emerging Index, FTSE Global Large Cap Index and FTSE All-World Index.

WAM