Arabian Drilling Company (2381) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 29% to SAR 3.477B and EBITDA increased 30% to SAR 1.485B, reflecting higher rig activity and offshore fleet expansion.

• Three new jackups deployed in summer 2023 and improved Q4 service delivery supported stronger profitability and cash generation.

Financial highlights

• Q4'23 revenue was SAR 987M (+7% QoQ), EBITDA SAR 435M (+11%), and net income SAR 183M (+31%).

• FY23 adjusted net income was SAR 605M (+25%); FY22 comparison adjusts for a one-time SAR 73.8M tax effect from a shareholding change.

• FY23 capex was SAR 1.884B (+8%), including ~SAR 1.2B for fleet expansion; Q4'23 capex was SAR 535M, down 6% QoQ.

• Q4'23 free cash flow was negative SAR 93M; operating cash flow was SAR 441M, up 350% QoQ.

Outlook and guidance

• FY24 revenue guidance: SAR 3.6B–3.9B; FY24 capex guidance: SAR 2.1B–2.4B.

• Future dividends will depend on cash management needs to support long-term growth.

• Current investment cycle is expected to peak in 2024; leverage is expected to rise further following recent rig awards.