Adnoc Drilling, the largest domestic drilling company in the Middle East by the size of its rig fleet, said its second-quarter net profit jumped more than 19% as revenue rose in the international expansion plans.
Net profit for the three-month period ending in late June was $204.85 million, Adnoc Drilling, a unit of Adnoc, said in a statement on Tuesday. statement on the Abu Dhabi Stock Exchange, where its shares are traded.
Revenue for the April-June quarter rose 11% to $669 million, driven by its onshore and oilfield services business as the company continues to support Abu Dhabi’s efforts to increase its capacity production.
Net profit for the first six months of the year rose 34% year on year to $379 million. Half-year revenue increased 13% at the end of June to $1.27 billion, in line with the company’s annual growth targets.
“We aim to grow the business by 10% or more on an annual basis and we seek that on an ongoing basis,” Chief Financial Officer Esa Ikaheimonen said. The National.
The company, 84% owned by Adnoc, maintains a symbiotic relationship with its parent company.
Adnoc’s plans to accelerate its capacity development growth will “directly impact the growth of our business” and “may well lead to growth rates that are even well above 10% and above,” said Mr. .Ikaheimonen.
Adnoc Drilling, which raised more than $1.1 billion from its IPO last year, plans to expand into other GCC markets and beyond.
“We are looking at different ways and different options to be able to do this, [both] organically and inorganically,” Mr. Ikaheimonen said.
“First of all, [we are] looking at regional markets. We know the conditions, we know the technical requirements, we know the geology well here, but we’re not necessarily limited to one area.
Adnoc Drilling is already one of the largest drilling companies in the world, and “arguably one of the most capable as well, as it offers integration capability,” Ikaheimonen said.
“It’s a great starting point for international expansion.”
However, the company’s focus will continue to be initially on the “high-quality” domestic market, he said.
A decision on when the company will embark on international expansion has yet to be made.
Earnings before interest, taxes, depreciation and amortization (Ebitda) in the first six months of the year climbed 16% annually to $580 million, with an Ebitda margin of 45.7%, while that the company has made “outstanding progress” in delivering additional costs. savings.
“Adnoc Drilling continued to make solid progress in 2022, delivering on its promise to continue to grow the business and maximize returns for our shareholders,” said Dr. Sultan Al Jaber, Minister of Industry and Advanced Technologies. of the United Arab Emirates, Managing Director and Group Managing Director of Adnoc and Chairman of Adnoc Drilling.
“The strong half-year results and successful strategic execution demonstrate the company’s vital role in enabling significant growth in Adnoc’s production capacity, as well as the UAE’s goal of achieving gas self-sufficiency. “
The company’s board also approved an interim dividend, raising it by 5% to 7.83 fils to bring the first payment in fiscal year 2022 to $341 million, Dr Al Jaber said.
The company delivered a strong performance across all of its business segments in the first six months of the year.
Half-year revenue from shore operations jumped more than 24% to $702 million, largely due to new rigs added to the fleet.
Revenue from offshore jack-up operations remained broadly flat at $288 million, while offshore island revenue reached $101 million, in line with the first half of 2021 levels, and oil services revenue for the period considered increased by approximately 14% to reach 179 million dollars.
“These results were made possible by our clear strategic objectives,” said Abdulrahman Al Seiari, Managing Director of Adnoc Drilling.
The company accelerated its rig fleet expansion program in the first half, with eight rigs added to the fleet.
Adnoc Drilling added five Helmerick & Payne FlexRigs in the first three months, while sale and purchase agreements were signed for three premium offshore lifting rigs in the second quarter.
In the second half, the company plans to add 10 more rigs to its fleet, Ikaheimonen said.
The company aims to increase its overall fleet size to 122 aircraft by the end of 2024.
“Our fleet expansion program has gained real momentum and is central to our dynamic growth strategy. The rigs we added to our fleet in the first half of 2022 will help us deliver on our strong commitments to our shareholders,” Mr. Al Seiari said.
The rig acquisition is part of Adnoc Drilling’s three-year capital expenditure guidance program of $2.5 billion to $3 billion. The investment forecast could increase if the company manages to accelerate its growth and “be a little more generous in terms of the amount of money we set aside for investments in terms of capital structure,” Mr. Ikaheimonen.
The company has undrawn financing facilities that can “increase our current debt from $1.5 billion to approximately $3 billion.”
It has low debt and can raise more funding if needed, he added.
Adnoc Drilling plays a vital role in Adnoc’s efforts to increase its hydrocarbon production capacity.
Earlier this month, the company won two contracts worth Dh7.49 billion ($2 billion) related to Adnoc’s Hail and Ghasha development project.
The contracts include 4.89 billion dirhams for integrated drilling services and fluids, and 2.6 billion dirhams for the supply of four island drilling units.
A third contract, worth 2.5 billion dirhams, was also awarded to Adnoc Logistics & Services for the provision of offshore logistics and maritime support services.
The three contracts will cover the Hail and Ghasha drilling campaign for a maximum of 10 years, Adnoc Drilling said at the time.
The company also received two contracts worth $3.4 billion from Adnoc in the first week of August.
The deal, valued at $1.5 billion and $1.9 billion, involves leasing eight jack-up rigs to support drilling operations in Adnoc’s offshore fields, which account for about half of the production capacity of the company, Adnoc said.
Updated: August 09, 2022, 11:51 a.m.