Arabian Drilling Company (2381) Q4 2025 earnings summary

Executive summary

• FY 2025 revenue declined 5.1% year-over-year to SAR 3,433 million, mainly due to lower offshore and conventional activity, partially offset by strong unconventional operations.

• EBITDA dropped 17.8% to SAR 1,240 million, with margin down to 36.1%; adjusted net income fell 90.8% to SAR 39 million, reflecting lower activity and higher depreciation.

• Q4 2025 revenue was SAR 824 million, down 1.3% sequentially; Q4 EBITDA was SAR 263 million (31.9% margin), with an adjusted net loss of SAR 34 million due to one-off demobilization costs.

• Backlog reached a record SAR 12.4 billion, up 20% year-over-year, with contract duration at 2.6 years and book-to-bill ratio at 3.64.

• First international contract commenced, marking a strategic milestone in geographic expansion.

Financial highlights

• FY 2025 CAPEX was SAR 746 million, down 61% year-over-year, reflecting fewer investments in unconventional rigs.

• Operating cash flow for 2025 was SAR 1,186 million, down 17.7% year-over-year.

• Year-end cash position was SAR 595.3 million, up SAR 14 million from 2024.

• Net debt stable at SAR 2.4 billion; net debt/EBITDA at 2.0x at year-end.

• Q4 2025 net debt improved sequentially due to stronger cash and loan repayments.

Outlook and guidance

• Revenue expected to improve slightly in Q1 2026, with further gains in Q2 as more rigs return to operation.

• FY 2026 CAPEX projected at SAR 750 million, including SAR 150 million for rig reactivation.

• Offshore utilization expected to reach 100% in early Q2 2026; total utilization projected to exceed 80% by end of Q1 2026.

• Margins anticipated to improve as reactivated rigs reach full operational impact in H1 2026.

• Management confident in renewing 2026 expiring contracts, supporting higher utilization in H2 2026.