Arabian Drilling Company (2381) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was SAR 911.1 million, up 7.2% sequentially but down 5.7% year-over-year, with EBITDA margin at 41.8% and net income at SAR 75.2 million, up 7.2% quarter-on-quarter.

• Operational efficiency improved with a record 60 rig moves, 83.3% utilization, and 0.95% NPT, adding SAR 5 million in revenue.

• Secured significant 10-year contract extensions with Aramco for two rigs and acquired a new service vessel, adding SAR 170 million to backlog and diversifying revenue streams.

• Company remains in compliance with all debt covenants and continues to invest in capex, with SAR 142.9 million contracted but not yet incurred.

Financial highlights

• Q1 backlog stood at SAR 9.5 billion, with additions from new service vessel and land rig options, offset by temporary discounts and one offshore contract termination.

• EBITDA for Q1 2025 was SAR 380.9 million, up 6.3% sequentially, with margin at 41.8%.

• CapEx for Q1 was SAR 290 million, mainly for the new service vessel; net debt increased to SAR 2,441 million after a SAR 300 million drawdown.

• Cash and cash equivalents at period end were SAR 477.8 million, down from SAR 581.8 million at year-end 2024.

• Net cash from operating activities was SAR 63.9 million, with net cash used in investing activities of SAR 275.5 million.

Outlook and guidance

• Q2 2025 revenue expected to decline by 5–10% from Q1, due to normalization of rig moves, offshore rig maintenance, and weaker oil demand.

• CapEx guidance for 2025 lowered to SAR 800–900 million from SAR 1 billion.

• Management anticipates a challenging remainder of 2025 but expects activity to pick up in 2026.

• Cautious approach maintained due to ongoing market uncertainties and risk of further rig suspensions.