ADES (2382) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 75.6% YoY to SAR 4.332bn and EBITDA rose 104% to SAR 2.139bn, driven by fleet expansion, utilization and daily rates.

• Year-end backlog was SAR 27.54bn, with a 5.35-year weighted average remaining tenor; utilization was 98%.

• Operating rig count rose to 67 from 48; all 19 Aramco mega-tender rigs were operating by the update date.

Financial highlights

• Revenue increased to SAR 4.332bn from SAR 2.467bn; EBITDA reached SAR 2,138.8mn from SAR 1,049mn.

• Reported net profit rose 13.7% to SAR 452.1mn; normalized net profit increased 84.2% to SAR 473.1mn.

• Operating cash flow before working capital rose 103.8% YoY to SAR 2,104.1mn; free cash flow increased 104.5% to SAR 1.827bn.

• FY 2023 capex was SAR 4,048mn, versus SAR 3,923mn in FY 2022.

Outlook and guidance

• FY 2024 EBITDA guidance: SAR 2.89–3.04bn, supported by continued operational growth and expansion ramp-up.

• Growth drivers include full ramp-up of the 19-rig Aramco tender and six Kuwait rigs, plus deployments and new contracts in Algeria, India and Indonesia.

• Indonesia operations are scheduled to start in H2 2024; refurbishment-related interest expense is expected to normalize after project rigs are deployed.