ADNOC Drilling reports $604 mln net profit in 2021

ADNOC Drilling reports $604 mln net profit in 2021

/ Financial News / Friday, 11 February 2022 13:19

ADNOC Drilling Company announced its financial results for the fourth quarter and full-year ending 31st December 2021, with a net profit for the full year $604 million, up 6% year-on-year.

ADNOC Drilling said that the Company's revenue for the 12 months increased 8.2% to $2.27 billion compared to the same period last year. Year-on-year revenue growth was led by the Onshore segment, as the Company continues to support ADNOC Group's programme to grow production capacity significantly. The Company's Oilfield Services (OFS) segment also considerably increased revenue and EBITDA year-on-year.

Full-year EBITDA was $1.047 billion, with a margin of 46.1%, as the Company made excellent progress on delivering further cost efficiencies.

Year-on-year, Q4 21 EBITDA grew by 2.7%. Over the period, EBITDA margin expanded to 45.6%, reflecting, in part, active management of centrally allocated expenses in the quarter.

Year-on-year underlying operating performance was stable. Revenue growth was strongest in OFS, helping offset weaker Q4 21 revenues in drilling segments, leaving Q4 21 revenues essentially flat vs Q4 20. Financial performance was lower due to non-recurring drilling revenues booked in the prior comparative year.

The onshore revenue for the full year was $1.14 billion, up 6% over 2020, primarily driven by new rigs and rig reactivations. Year-on-year, Q4 21 revenue was $293 million, down 4% vs Q4 2020, impacted by stacking claim receipts booked in the comparative period. Overall operating rig days and underlying revenue in Q4 21 was higher than in the prior corresponding period.

The offshore jack-up revenue for the full year was $596 million, broadly flat vs the prior year at $597 million. Q4 21 revenue was $146 million, down 5% vs Q4 20, reflecting, in part, the retirement of 3 rigs. Revenue was also impacted by delays in replacing rented rigs with owned rigs.

The offshore island revenue was $204 million for the full year 2021, similar to 2020. Q4 21 revenue of $38 million was down 30% year-on-year. Lower year-on-year revenue in Q4 21 reflects a reversal of revenue accrued in the prior year and one-off stacking fees booked in Q4 20 that did not recur in Q4 21.

The Oilfield Services (OFS) segment performed well throughout the year, driven by higher activity from continued expansion, with healthy margin development. OFS revenue for the full year period increased 48% year-on-year to $329 million. Q4 21 revenue was $98 million, up 44% year-on-year.

ADNOC Drilling reported a fleet utilisation rate of 96% for the year to 31st December 2021. The Company's cash from operations1 increased 7% year-on-year to $1.085 billion, equating to cash conversion of 104% of EBITDA.

Capital expenditure (Capex) for the full year increased by 34% to $505 million in 2021, as the Company pursues ambitious plans to cater to client demand. Q4 Capex was slightly lower than in Q3, as rig acquisitions mainly were executed in the previous quarter.

Dr. Sultan Ahmed Al Jaber, minister of Industry and Advanced Technology, ADNOC managing director and Group CEO, and chairman of ADNOC Drilling, commented, "ADNOC Drilling's first full-year results as a listed company are an important milestone in the Company's journey since its record-breaking IPO on ADX.

Earnings were supported by solid progress on efficiency and cost discipline objectives, including head office costs, where management believes further cost management is achievable and will help improve margins.

Meanwhile, the Company's strong working capital position at the year-end reflects materially improved customer collections and cash conversion. Net debt ending 31st December 2021 was $1.086 billion, representing a net debt/EBITDA multiple of 1.03.

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