ADNOC Drilling Achieves Record Revenue And EBITDA In First Quarter Of 2024

ADNOC Drilling Company has proudly announced a record-breaking performance for the first quarter ending 31st March 2024, marking a significant milestone in its financial achievements. The company reported an impressive revenue of $886 million, showcasing a robust 24% increase compared to the same period last year. This marks the third consecutive quarter where ADNOC Drilling has surpassed market expectations, highlighting its strong and consistent growth trajectory.

The substantial revenue boost was primarily fueled by the Offshore Jack-up and Oilfield Services (OFS) segments, which saw remarkable year-on-year increases of 51% and 16%, respectively. Furthermore, the company's EBITDA experienced a substantial 31% growth year-on-year, reaching $437 million. This growth is attributed to ADNOC Drilling's exceptional operational performance, which also led to an EBITDA margin expansion of 49%. Additionally, the net profit for the quarter stood at $275 million, marking a 26% increase from the previous year.

Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, expressed his enthusiasm about the company's first-quarter achievements. He stated, "Our strong first quarter performance demonstrates that we have entered a new era for the Company as we go from strength-to-strength, delivering on and beyond the expectations of the market, our customers and our shareholders." Al Seiari's comments reflect confidence in the company's future growth and cash flow generation capabilities.

In light of these promising results, ADNOC Drilling's Board of Directors has recommended implementing a new, progressive dividend policy. This policy anticipates dividends to grow by at least 10% per annum on a dividend per share basis over the next five years (2024-2028). The Board may also consider additional dividends beyond this policy, contingent upon evaluating growth opportunities and maintaining a net debt/EBITDA ratio up to 2x, excluding transformative M&A activities.

The announcement of this dividend policy is pending shareholder approval at an upcoming General Shareholder Meeting. According to the proposed policy, dividends are expected to be distributed semi-annually, with a final dividend in the first half and an interim dividend in the second half of each fiscal year.

ADNOC Drilling has also been awarded a transformative $1.7 billion contract aimed at drilling and providing associated services for unconventional energy resources recovery. This contract entails delivering 144 unconventional oil and gas wells. To support this venture and capitalize on future unconventional resource opportunities, ADNOC Drilling has established Turnwell Industries LLC OPC.

The company plans to leverage its strategic joint venture with Enersol and ADNOC's leading AI, digitization, and advanced technologies to ensure responsible energy delivery. Additionally, ADNOC Drilling has initiated discussions with industry giants SLB and Patterson UTI for potential partnerships that would bring in cutting-edge technology and specialized services for unconventional energy drilling.

As of the end of Q1 2024, ADNOC Drilling's fleet has expanded to 137 rigs, including an increase of 22 rigs year-on-year. This fleet comprises 133 owned rigs plus four lease-to-own land rigs. Notably, thirteen rigs in the current count are hybrid-powered land rigs that incorporate battery storage to enhance power delivery while reducing emissions by up to 15% per rig. With three more hybrid land rigs expected to join the fleet within the year, ADNOC Drilling continues to demonstrate its commitment to innovation and environmental responsibility.

With inputs from WAM