ADNOC Drilling reports $802m net profit in 2022, reflecting a 33% YoY rise

ADNOC Drilling has announced its fourth quarter and full-year results for 2022. The company reported $802m in net profit for the 12-month period, up 33 per cent year-on-year (YoY).

Full-year earnings before EBITDA (interest, taxes, depreciation and amortisation) was $1.23bn, with a margin of over 46 per cent.

ADNOC Drilling’s revenue for the year increased to $2.67bn, up a robust 18 per cent compared to 2021.

Year-on-year revenue growth was driven by the Onshore and Oilfield Services (OFS) segment, while all divisions achieved positive YoY performance with the company enabling ADNOC’s accelerated production capacity target of five million barrels per day by 2027.

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The company also achieved record revenue, EBITDA, and net profit during Q4, while its fleet expansion programme delivered the highest-ever number of operational rigs.

The company’s accelerated rig acquisition programme added 16 new drilling units in 2022, establishing one of the world’s largest drilling and well completion fleets consisting of 115 rigs.

ADNOC Drilling’s full year 2022 financial results have beaten market expectations, with year-on-year net profit up by 33% to $802 million.

— ADNOC Group (@ADNOCGroup) February 13, 2023

During Q4 2022, ADNOC Drilling delivered its highest-ever quarterly revenue of $733m, up 27 per cent YoY, EBITDA of $353m, up 35 percent, and net profit of $234m, up 61 per cent. This significant growth was driven primarily by new rigs entering the operational fleet.

ADNOC Drilling reported onshore $1.45b in revenues for the full year, up 27 per cent over 2021, principally driven by new fleet additions. Year-on-year, Q4 revenue was up 29 per cent to $379m, driven by the resultant increase in drilling activity.

For the offshore jack-up, revenue for the full year was $611m, a 3 per cent increase compared to 2021.

The growth of the segment started accelerating towards the end of the year, with Q4 revenue of $180m and EBITDA of $108m, an increase of 23 per cent and 30 per cent, respectively, reflecting new jack-up rigs joining the operational fleet.

OFS revenue for the full year versus 2021 was flat at $204m. Q4 revenue was $51m, up 34 per cent compared to the previous year. EBITDA decreased marginally, down five per cent year-on-year due to one-off revenue claims in 2021 for standby island rigs.

Its revenue was $405m for the full year, an increase of 23 per cent compared to 2021. Record quarterly revenue of $123m was achieved in Q4 due to additional offshore unconventional activity during the quarter.

ADNOC Drilling reported a fleet utilisation rate of 96 per cent for the year, delivering exceptional revenue efficiency. Cash from operations increased 29 per cent year-on-year to $1.52bn, supporting a free cash flow of $588m.

Full-year 2022 capital expenditure increased by 62 per cent to $942m as the company delivered on its ambitious plans to expand its fleet to meet customer demand.

Abdulrahman Abdulla Al Seiari, CEO of ADNOC Drilling, said, “I am proud of the outstanding results that ADNOC Drilling has delivered over the past 12 months. These record results were enabled by our clear strategic objectives, the hard work of our highly-skilled and dedicated workforce, and our commitment to industry-leading health and safety standards.

“We are excited about the year ahead as we accelerate our business growth and build out our assets to enable ADNOC to realise its 2027 capacity targets, and we have released updated guidance accordingly.”

ADNOC Drilling initiates first-ever year-ahead guidance

The company expects total revenue between $3.0 to $3.2bn, which represents YoY growth of up to 20 percent, and EBITDA in a range between $1.35 to $1.5bn, with a very healthy margin of 45 per cent to 47 per cent.

The company expects a net profit of $850m to $1bn again, continuing the growth from $600m in 2021 to $800m in 2022 and now to this new level in 2023.

Capital expenditure is forecast to be in the range of $1.3 to $1.75bn this year.

The final dividend for 2022 is expected to increase by a minimum of 5 per cent, in line with the highly competitive and progressive 5-for-5 dividend policy.