ADNOC Drilling net profit soars by 33% to hit record $802 million

ADNOC Drilling Company PJSC on Monday announced its financial results for the fourth quarter and full year ending December 31, 2022, with revenue for the year increasing to US $2.67 billion, up a robust 18% compared to 2021.

Year-on-year revenue growth was led by the Onshore and Oilfield Services (OFS) segments, while all segments achieved positive year-on-year performance as the company works to enable ADNOC’s accelerated production capacity target of 5 million barrels per day by 2027, the company said in a statement.

ADNOC Drilling achieved record revenue, EBITDA and net profit during the fourth quarter of 2022, while its bold fleet expansion programme delivered the highest-ever number of operational rigs – bolstering growth and charting a clear course for further expansion in 2023 and beyond.

The company’s accelerated rig acquisition program 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 said.

Full year EBITDA was $1.23 billion, with a margin of over 46%, as ADNOC Drilling made excellent progress on the delivery of further cost efficiencies. Net profit for the twelve-month period was a record $802 million, up 33% year-on-year. During the fourth quarter of 2022, ADNOC Drilling delivered its highest-ever quarterly revenue of $733 million, up 27% year-on-year, EBITDA of $353 million, up 35%, and net profit of $234 million, up 61%. This significant growth was driven primarily by new rigs entering the operational fleet.

“I am proud of the outstanding results that ADNOC Drilling has delivered over the past 12 months. In addition to record net profit of $802 million for the year, I am particularly pleased with the over $10 billion of contract backlog we were awarded in the year by our long-term, highly supportive customers,” Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, said in a statement.

“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,” he said.

Onshore revenue for the full year was $1.45 billion, up 27% over 2021, principally driven by new fleet additions. Year-on-year, 4Q22 revenue was up 29% to $379 million, largely driven by the resultant increase in drilling activity, the company said.

Offshore jack-up revenue for the full year was $611 million, a 3% increase compared to 2021. The growth of the segment started accelerating towards the end of the year, with 4Q22 revenue of $180 million and EBITDA of $108 million, an increase of 23% and 30% respectively, reflecting new jackup rigs joining the operational fleet, according to ADNOC Drilling.

Offshore island revenue for the full year versus 2021 was flat at $204 million. The fourth quarter revenue was $51 million, up 34% compared to 4Q21. EBITDA decreased marginally, down 5% year-on-year due to one-off revenue claims in 2021 for standby island rigs, the company said.

Oilfield services revenue was $405 million for the full year, an increase of 23% compared to 2021. Record quarterly revenue of $123 million was achieved in 4Q22 due to additional offshore unconventionals activity during the quarter, ADNOC Drilling said.

The company reported a fleet utilisation rate of 96% for the year ending December 31, 2022, delivering exceptional revenue efficiency. Cash from operations2 increased 29% year-on-year to $1.52 billion supporting a free cash flow of $588 million. Full year 2022 capital expenditure3 increased by 62% to $942 million, as the company delivered on its ambitious plans to expand its fleet to meet customer demand.

In its first ever year-ahead guidance, ADNOC Drilling said it expects total revenue between $3.0 billion to $3.2 billion, which represents year-on-year growth of up to 20%, and EBITDA in a range between $1.35 to $1.5 billion, with a very healthy margin of 45% to 47%.