Arabian Drilling Company (2381) Q4 2024 earnings summary

Executive summary

• Achieved record revenue of SAR 3.6 billion (+4.1% YoY) and record EBITDA of SAR 1.5 billion (+2% YoY), demonstrating resilience amid market uncertainty and rig suspensions.

• Net income declined 30% YoY to SAR 426 million, mainly due to higher depreciation, impairment, and finance costs from fleet expansion.

• Deployed 13 new unconventional rigs, expanding the fleet to 61 and becoming the largest drilling contractor in Saudi Arabia.

• Maintained high operational efficiency with 83.1% utilization and 1.67% non-productive time, 4x lower than industry average.

• Formed a strategic alliance with Shelf Drilling to enhance international reach and tender for global contracts.

Financial highlights

• Revenue grew 4.1% year-over-year to SAR 3,619M; EBITDA reached SAR 1,508M with a 41.7% margin.

• Adjusted net income of SAR 426M, excluding a SAR 105M one-time non-cash asset impairment.

• Operating cash flow increased by nearly 30% YoY to SAR 1,750M.

• Dividend payout for 2024 totaled SAR 240M, representing 75% of net income.

• Net debt increased 39% to SAR 2,441M, mainly to finance unconventional rig capex; net debt/EBITDA at 1.6x.

Outlook and guidance

• 2025 guidance will be provided quarterly due to ongoing market uncertainty.

• Q1 2025 revenue expected to be flat versus Q4 2024, with up to 5% upside potential.

• Strategic priorities for 2025: enhance HSE, increase fleet utilization, support KSA's energy transition, and expand internationally.

• CapEx for 2025 projected at about 50% of 2024 levels, around SAR 900M.