ADNOC Drilling Company (ADNOCDRILL) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 14% to $3,057m, EBITDA increased 20% to $1,483m at a 49% margin, and net profit grew 29% to a record $1,033m.

• Q4 revenue reached $841m (+15% YoY), EBITDA $424m (+20%), and net profit $329m (+41%); all were quarterly records.

• Fleet expansion added 14 rigs during FY23, bringing owned rigs to 129; the first international rig began operations in Jordan.

• Growth priorities include supporting ADNOC production-capacity plans, scaling unconventional drilling and integrated services, and expanding through technology-enabled investments.

Financial highlights

• FY23 EPS rose 29% to $0.0646; Q4 EPS was $0.0206, up 41% YoY.

• Operating cash flow was $1,355m, down 11% YoY; free cash flow was $306m, down 48%.

• Cash CapEx was $1,062m, up 13%; reported CapEx was $1,333m including prepayments and accruals.

• Net profit growth included an estimated $55m positive impact from lower depreciation; working-capital movements reflected rig acquisition payment timing and collections.

Outlook and guidance

• FY24 revenue guidance is $3,600–$3,800m; EBITDA $1,700–$1,900m at a 48%–50% margin; net profit $1,050–$1,250m at a 30%–33% margin.

• FY24 segment revenue guidance: Onshore $1,600–$1,700m, Offshore Jack-up $1,000–$1,100m, Offshore Island $200–$250m, and OFS $700–$800m.

• FY24 CapEx guidance is $750–$950m; net debt/EBITDA target is below 2.0x, excluding material M&A.

• Medium-term targets: revenue CAGR of 12%–16% from FY23, EBITDA margin near 50%, drilling margin above 50%, and OFS margin of 22%–26%.

• Owned rig count is expected to reach 142 by end-2024, including four new lease-to-own land rigs; post-2024 maintenance CapEx is targeted at $200–$250m annually.