Highlights for the three months ended 31 December 2023

The Company achieved record revenue, EBITDA and net profit during the fourth quarter of 2023, driven by the highest-ever number of operational rigs, bolstering growth and charting a clear course for further expansion in 2024 and beyond. 

During the fourth quarter of 2023, ADNOC Drilling delivered quarterly revenue of $841 million, up 15% year-on-year, EBITDA of $424 million, up 20%, and net profit of $329 million, up 41%. 

The Company added 14 new drilling units in 2023, including four lease-to-own land rigs, establishing one of the world’s largest owned and operated fleets consisting of 129 rigs. ADNOC Drilling’s revenue for the year increased to $3.06 billion, up 14% year-on-year. Revenue growth was driven primarily by the Offshore Jack-up and Oilfield Services (OFS) segments, increasing 31% and 37% respectively. All segments grew year-on-year as the Company continues to execute on its fleet and OFS expansion strategy in support of the delivery of ADNOC’s production capacity target. 

Full-year EBITDA was $1.5 billion, with a margin of 49%, as the Company continues to make excellent progress on the delivery of cost efficiencies. Net profit for the twelve-month period was a record $1.03 billion, up 29% year-on-year.

• Onshore: Revenue for the full year was $1.5 billion, up 3% year-on-year, due to the contribution of new rigs which more than offset lower reimbursement of cost escalation claims. 4Q23 revenue was up 10% to $416 million, due to an increase in drilling activity. 
  
  
• Offshore Jack-up: Revenue for the full year was $800 million, a 31% increase compared to 2022, reflecting new jack-up rigs joining the operational fleet. 4Q23 revenue was $225 million an increase of 25% due to higher activity.
  
  
• Offshore Island: Revenue for the full year increased by 2% versus 2022 to $209 million, driven by mobilization revenue for the re-activated island rig. 4Q23 revenue was $52 million, up 2% compared to 4Q22, driven by increased activity.
  
  
• Oilfield Services (OFS): Revenue for the full year was $553 million, an increase of 37% year-on-year on the back of increased activity volume across the entire portfolio. 4Q23 generated record quarterly revenue of $148 million, driven by increased activity from pressure pumping, drilling fluids, and directional drilling. 

ADNOC Drilling reported a fleet availability rate of 96% for the year ending December 31, 2023, delivering exceptional revenue efficiency. Cash from operations decreased 11% year-on-year to $1.4 billion supporting a free cash flow of $306 million. Full-year 2023 capital expenditure was as anticipated $1,333 million, as the Company delivered on its ambitious plans to expand its fleet to meet customer demand.

 

Final Dividend 2023

The Board of Directors recommends a final dividend payment of $358 million for 2023 (8.22 fils per share), subject to shareholder approval at the upcoming Annual General Meeting (“AGM”). The total dividend for 2023 equals to $717 million (16.45 fils per share), representing a 5% year-on-year increase versus 2022. The final 2023 dividend is expected to be distributed in the first half of April 2024.
FY 2024 and medium-term guidance

On the back of strong results, ADNOC Drilling announces its full year 2024 and medium-term guidance, reaffirming growth. The Company continues to expect its owned rig count to total 142, including the 4 new lease-to-own land rigs, by the end of 2024.

The Company expects total revenue between $3.60 to $3.80 billion, EBITDA of $1.70 - $1.90 billion, with a margin range of 48% - 50% and Net Profit of $1.05 - $1.25 billion, with a margin range of 30% - 33%. Moreover, ADNOC Drilling expects CapEx to be between $0.75 - $0.95 billion, while maintaining a leverage ratio “Net debt/EBITDA” below 2x in 2024, excluding material M&A. 

ADNOC Drilling’s medium-term guidance is as follows:

• Revenue CAGR in the 12% - 16% range from 2023 base. 
• EBITDA Margins around 50% with drilling margins exceeding 50% and OFS Margin in a range of 22% - 26% medium term.
• Conservative long-term leverage target of up to 2.0x net debt / EBITDA, excluding material M&A.
• Net working capital as percentage of revenue target of around 12%. 
• Maintenance CapEx post-2024 of $200 - $250 million per annum.

¹ Availability rate based on rig availability - Cumulative of (Rig days less actual maintenance days less rig related non-productive time less actual rig move days) divided by Cumulative of (Rig days less planned maintenance days less planned rig move days).

² Cash from operations – Net cash generated from operating activities.

³ Capital expenditure – Additions to property and equipment including prepayments

⁴ Capital expenditure figures in the table (e.g. $1,062 million for full year 2023) refer to actual cash payments made in the period

⁵ Cash from operations – Net cash generated from operating activities