Arabian Drilling Company (2381) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked the first full quarter impacted by offshore rig suspensions, yet EBITDA margins were maintained, reflecting operational resilience and adaptability.

• All 10 unconventional land rigs from the first award and three from the second award are now deployed or will be operational before year-end, ahead of schedule.

• Revenue and EBITDA showed year-on-year growth, despite sequential declines due to offshore suspensions and contract non-renewals.

• Safety and sustainability remain top priorities, with reinforced protocols after a major HSE incident and ongoing solar initiatives delivering savings.

• The company is expanding non-core business and offshore fleet, while responding to market changes and contract suspensions.

Financial highlights

• Q3 2024 revenue was SAR 863 million, down 8% quarter-on-quarter; YTD revenue reached SAR 2,769 million, up 11% year-on-year.

• Q3 EBITDA was SAR 358 million (41.5% margin), down 7% sequentially; YTD EBITDA SAR 1,150 million, up 9% year-on-year.

• Adjusted net income for Q3 was SAR 85 million, down 32% sequentially; YTD adjusted net income SAR 356 million, down 16% year-on-year.

• CapEx for Q3 was SAR 548 million, with 66% allocated to unconventional rigs; negative free cash flow of SAR 70 million.

• Gross profit for the nine months was SAR 577.5 million, down from SAR 703.0 million year-over-year.

Outlook and guidance

• 2024 revenue is expected to close around SAR 3.6 billion, at the low end of previous guidance.

• Full-year CapEx is projected between SAR 2.1–2.2 billion, also at the low end of guidance.

• Leverage ratio expected to peak above 2.0x before normalizing as CapEx winds down.

• Management continues to monitor the impact of rig contract suspensions and will reassess impairment at year-end.

• Full contribution from all 13 unconventional rigs expected from Q1 2025, with anticipated quarterly revenue of SAR 200 million and EBITDA margin in the low to mid-30s%.