Adnoc Drilling Company on Thursday announced that third quarter net profit reached $257 million, up 36 per cent year-on-year.
Revenue increased to $776 million, up 16 per cent year-on-year with growth across all segments. Third quarter Ebitda increased 27 per cent year-on-year to $381 million as a result of strong top line growth and effective cost management initiatives, delivering an Ebitda margin of 49 per cent.
For the first nine months of 2023, revenue grew 14 per cent year-on-year to $2.2 billion, driven by increased activity and the expansion of Oilfield Services (OFS). During the same period net profit grew 24 per cent year-on-year to $704 million and Ebitda grew 20 per cent year-on-year to $1,058 million.
Abdulrahman Abdulla Al Seiari, chief executive officer, Adnoc Drilling, said: “Our positive third quarter results clearly demonstrate the effective execution of our comprehensive strategy to grow earnings by expanding our fleet and our service offering. These results demonstrate the Company’s ability to continue to deliver profitable growth as we maintain our safe, efficient and sustainable operations. Long-term shareholder value creation remains central to our strategy and future development.”
Adnoc Drilling’s sequential growth comes on the back of its two-pronged strategy of expanding its fleet and service offering. The company now has a total fleet of 134 operational rigs. The accelerated fleet expansion since IPO underpins our growth targets, while boosting revenue as incoming rigs commence operations.
At the same time, OFS revenue reached $145 million in the third quarter 2023, up 41 per cent year-on-year. Through OFS, Adnoc Drilling is delivering improved well delivery times and an associated emissions reduction, as a result of the adoption of advanced technologies and greater efficiencies.
Strong growth across all segments
Onshore: Third quarter revenue grew 2 per cent compared to the prior year, the overall increase in activity more than offset the lower year-on-year recovery of fuel costs.
Offshore Jack-up: Third quarter revenue increased 39 per cent year-on-year, mainly attributable to higher activity and lower major maintenance. First nine months revenue stood at $575 million, up 33 per cent year-on-year.
Offshore Island: Third quarter revenue grew 4 per cent compared to the prior year, driven by increased activity. First nine months revenue stood at $157 million, up 3 per cent year-on-year.
Oilfield Services (OFS): Third quarter revenue grew 41 per cent year-on-year, driven by increased activity from pressure pumping, drilling fluids, directional drilling, and one-off sale of certain materials. First nine months revenue stood at $405 million, up 44 per cent year-on-year.
Updated FY 2023 guidance
Driven by increased visibility on earnings and profitability, Adnoc Drilling updated its fiscal year 2023 guidance on Ebitda, net profit and capex, while it confirmed the guidance on other metrics. The company now expects total revenue between $3.0 to $3.2 billion, Ebitda of $1.4 – $1.5 billion (previously $1.35 – $1.5 billion), with a margin range of 47 per cent — 49 per cent (previously 45 per cent — 47 per cent) and net profit of $0.9 – $1.0 billion (previously $0.85 – $1.0 billion), with a margin range of 29 per cent – 32 per cent (previously 28 per cent – 31 per cent). Moreover, Adnoc Drilling now expects capex to be around $1.3 billion for 2023 (previously $1.30 – $1.75 billion).
Update on decarbonisation initiatives
Adnoc Drilling has also continued its investment in various decarbonisation initiatives across its operations, supporting Adnoc’s target to reduce carbon intensity by 25 per cent by 2030.
During the first half of the year the company announced the acquisition of 16 newbuild hybrid land rigs that are expected to join the operational fleet in 2024. Each hybrid rig can deliver an emissions reduction of up to 15 per cent.
Additionally, two of Adnoc Drilling’s central camps will be connected to the grid by year-end, reducing the need for traditional diesel generators and the associated emissions, with two more connected in early 2024. At the same time, the company is progessively rolling out solar power across its mobile camps.
Events subsequent to the third quarter
Adnoc Drilling entered into a joint venture agreement with Alpha Dhabi Holdings to invest up to $1.5 billion in the acquisition of technology-enabled companies in the OFS and energy sectors, spurring significant future growth in Adnoc Drilling’s OFS offering.
Adnoc Drilling will embark on its international growth journey, providing integrated drilling services in Jordan, with economics in line with existing returns achieved in Abu Dhabi.