The UAE’s ADNOC Drilling Company recorded the highest quarterly revenues during the fourth quarter of 2022, after adding new drilling rigs to the company’s fleet and starting operations.
Today, Monday, February 13, the Emirati company announced its financial results for the fourth quarter and the year ending on December 31, 2022.
ADNOC Drilling achieved an exceptional net profit during 2022, amounting to 2.95 billion dirhams ($ 802 million), an increase of 33% on an annual basis.
The company’s 2022 profit before interest, tax, depreciation and amortization amounted to 4.52 billion dirhams ($ 1.23 billion), with a margin of more than 46% due to good progress in enhancing cost efficiency.
Results of ADNOC Drilling in 2022
ADNOC Drilling recorded a strong increase in its revenues during 2022, reaching 9.82 billion dirhams ($ 2.67 billion), an increase of 18% compared to 2021.
The strong growth recorded in the company’s revenues on an annual basis was driven by the onshore drilling and oilfield services sectors, coinciding with all other sectors achieving positive results on an annual basis, in line with the company’s plan to enable ADNOC to accelerate achieving the goal of raising crude oil production capacity to reach to 5 million barrels per day by 2027.
ADNOC Drilling achieved revenues, EBITDA, and exceptional net profits during the fourth quarter of 2022, driven by the company’s strong program to expand its fleet, which includes the largest number of operating drilling rigs, which contributes strongly to enhancing the company’s growth process, and sets a clear road map for it. For further expansion through 2023 and beyond.
The company had acquired 16 new drilling rigs during 2022, which enabled it to own a fleet of rigs that is among the largest in the world for drilling and preparing wells, including 115 drilling rigs.
Highest quarterly revenue
During the fourth quarter of 2022, the company achieved its highest-ever quarterly revenue of 2.69 billion dirhams ($733 million), an increase of 27% year-on-year.
Profits before interest, tax, depreciation, and amortization amounted to 1.30 billion dirhams ($353 million), an increase of 35%, and net profits amounted to 859.37 million dirhams ($234 million), an increase of 61%, according to the data seen by the specialized energy platform.
This strong growth is mainly driven by the entry of a number of new rigs into service within the company’s fleet, according to the Emirates News Agency, WAM.
The company achieved strong growth across all of our major business segments, including onshore drilling services, driven by the addition of new rigs to the company’s fleet.
Onshore drilling services revenue for the full year 2022 amounted to 5.33 billion dirhams ($ 1.45 billion), an increase of 27%, compared to 2021.
Revenues for the fourth quarter of 2022 also recorded an increase of 29% year-on-year to reach 1.39 billion dirhams ($ 379 million), mainly driven by an increase in drilling activities.
Offshore drilling services
Offshore drilling services segment revenue for the full year 2022 was AED 2.24 billion ($611 million), up 3% compared to 2021.
The sector witnessed an acceleration in its growth with the approach of the end of the year, which enabled the company during the fourth quarter of 2022 to achieve revenues amounting to 661.05 million dirhams (180 million dollars), and profits before interest, tax, depreciation and amortization of 396.63 million dirhams (108 million dollars), thus achieving an increase They accounted for 23% and 30%, respectively, which reflects the entry of new self-elevating offshore drilling rigs into the company’s fleet.
Compared to 2021, revenues from artificial island services during the whole of 2022 remained unchanged at 749.19 million dirhams ($204 million).
The company achieved revenues from the artificial island services sector during the fourth quarter of 2022 amounting to 187.30 million dirhams ($ 51 million), recording an increase of 34%, compared to the last quarter of 2021.
Segment EBITDA recorded a slight decline of 5% year-on-year due to one-off revenue claims in 2021 for spare island rigs.
Oil field services
Revenues of the oilfield services sector for the full year 2022 amounted to 1.49 billion dirhams ($ 405 million), an increase of 23% compared to 2021, while the same sector achieved exceptional quarterly revenues of 451.72 million dirhams ($ 123 million) caused by the additional activity of the offshore drilling services sector. Unconventional in the last quarter of the same year.
It is noteworthy that the company announced a fleet utilization rate of 96% (for the year ending December 31, 2022), which achieves exceptional efficiency in revenues.
It also announced an increase in cash revenue from operations by 29% year-on-year to reach 5.58 billion dirhams ($1.52 billion), supporting free cash flow of 2.15 billion dirhams ($588 million).
Capital expenditures for 2022 also increased by 62% to reach 3.46 billion dirhams ($942 million), as the company implemented its ambitious plans to expand its fleet to meet customer demand.
2023 forecast
ADNOC Drilling’s forward-looking guidance for 2023 expects revenue to range between AED 11.02 billion ($3 billion) and AED 11.75 billion ($3.2 billion), up 20% year-on-year.
The guidance also expects EBITDA to range between 4.96 billion dirhams ($1.35 billion) and 5.50 billion dirhams ($1.5 billion), with strong margins ranging between 45% and 47%.
Forecasts indicate that net profits range between 3.12 billion dirhams (850 million dollars) and 3.67 billion dirhams (1 billion dollars), which reflects the continued growth of the company’s net profits and its transition from 2.20 billion dirhams (600 million dollars) in 2021 to 2.93 billion dirhams (800 million dollars). million dollars) in 2022, and then to what is expected to reach it in 2023.
The range of capital expenditures for this year is also expected to range between AED 4.77 billion ($1.3 billion) and AED 6.43 billion ($1.75 billion) while the leverage ratio is planned to be maintained at levels below x2.0.
Dividend
In light of the strong and distinguished performance for the year 2022 and the dividend policy, expectations indicate an increase in the final dividend for the year 2022 by a minimum of 5%, in line with the progressive and pioneering dividend distribution policy for each share over a period of 5 years, which confirms the company’s commitment to providing sustainable value to its shareholders.
The CEO of ADNOC Drilling, Abdul Rahman Abdullah Al-Sayari, said: “During the year 2022, the company achieved outstanding results. In addition to the exceptional net profits that the company achieved this year, which amounted to 2.95 billion dirhams ($ 802 million), I am also proud of the package of contracts that our customers have won.” With whom we have a long-term contractual relationship, by taking over the company this year, with a value of more than 36.73 billion dirhams ($10 billion).
He added: “The company’s clear strategic objectives, the efforts and dedication of its highly skilled human cadres, and our commitment to leading health and safety standards in the drilling operations sector have enabled the company to achieve these exceptional results.”
He pointed out that ADNOC Drilling is excited for the coming year and is looking forward to accelerating the growth of its business and strengthening its assets to enable ADNOC to achieve the goal of raising production capacity by 2027.
Leave a Reply