Arabian Drilling Company (2381) Q4 2025 earnings summary

Executive summary

• FY 2025 revenue declined 5.1% year-over-year to SAR 3.4 billion, mainly due to lower offshore and conventional activity, partially offset by strong unconventional operations.

• EBITDA dropped 17.8% to SAR 1.24 billion (36.1% margin), with adjusted net income falling 90.8% to SAR 39 million, reflecting lower activity and higher depreciation.

• Q4 2025 revenue was SAR 824 million, down 1.3% sequentially, with EBITDA at SAR 263 million (32% margin); adjusted net loss was 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 just under SAR 1.2 billion, down 17.1% year-over-year.

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

• Year-end cash position was SAR 595 million, up SAR 14 million from 2024.

• Q4 2025 CAPEX was SAR 162 million, mainly for rig reactivation.

Outlook and guidance

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

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

• FY 2026 CAPEX guidance is SAR 750 million, including SAR 150 million for rig reactivation.

• Management confident in renewing 2026 expiring contracts and expects majority of idle rigs to return to service.

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