Adnoc Drilling net profit up 33% to AED2.94bn in 2022

Abu Dhabi / WAM

Adnoc Drilling Company on Monday announced its financial results for the fourth quarter and full year ending December 31, 2022. It reported AED2.94 billion ($802 million) net profit for the twelve-month, up 33 percent year-on-year.
Full year earnings before Ebitda (interest, taxes, depreciation and amortisation) was $1.23 billion, with a margin of over 46 percent, as Adnoc Drilling made excellent progress on the delivery of further cost efficiencies.
Adnoc Drilling’s revenue for the year increased to $2.67 billion, up a robust 18 percent compared to 2021. Year-on-year revenue growth was led by the onshore and oilfield services (OFS) segments, while all segments achieved positive year-on-year performance as the company enables Adnoc’s accelerated production capacity target of five million barrels per day by 2027.
The company achieved record revenue, Ebitda and net profit during the fourth quarter of 2022, while its bold fleet expansion programme delivered the highest-ever number of operational rigs – bolstering growth and charting a clear course for further expansion in 2023 and beyond.
The company’s accelerated rig acquisition programme added 16 new drilling units in 2022, establishing one of the world’s largest drilling and well completion fleets consisting of 115 rigs.
During the fourth quarter of 2022, Adnoc Drilling delivered its highest-ever quarterly revenue of $733 million, up 27 percent year-on-year, Ebitda of $353 million, up 35 percent, and net profit of $234 million, up 61 percent. This significant growth was driven primarily by new rigs
entering the operational fleet.
Adnoc Drilling reported onshore $1.45 billion in revenues for the full year, up 27 percent over 2021, principally driven by new fleet additions. Year-on-year, Q4 2022 revenue was up 29 percent to $379 million, largely driven by the resultant increase in drilling activity.
For the offshore jack-up, revenue for the full year was $611 million, a three percent increase compared to 2021.
The growth of the segment started accelerating towards the end of the year, with Q4 2022 revenue of $180 million and Ebitda of $108 million, an increase of 23 percent and 30 percent, respectively, reflecting new jack-up rigs joining the operational fleet.
The Offshore Island revenue for the full year versus 2021 was flat at $204 million. Q4 2022 revenue was $51 million, up 34 percent compared to Q421. Ebitda decreased marginally, down five percent year-on-year due to one-off revenue claims in 2021 for standby Island Rigs.
The oilfield services (OFS) revenue was $405 million for the full year, an increase of 23 percent compared to 2021. Record quarterly revenue of $123 million was achieved in Q422 due to additional offshore unconventional activity during the quarter.
Adnoc Drilling reported a fleet utilisation rate of 96 percent for the year ending December 31, 2022, delivering exceptional revenue efficiency. Cash from operations increased 29 percent year-on-year to $1.52 billion, supporting a free cash flow of $588 million.
Full-year 2022 capital expenditure increased by 62 percent to $942 million as the company delivered on its ambitious plans to expand its fleet to meet customer demand.
Adnoc Drilling initiated its first-ever year-ahead guidance. The company expects total revenue between $3.0 to $3.2 billion, which represents year-on-year growth of up to 20 percent, and Ebitda in a range between $1.35 to $1.5 billion, with a very healthy margin of 45 percent to 47 percent.
The company anticipates a new record net profit of $850 million to $1 billion, again continuing the growth from $600 million in 2021 to $800 million in 2022 and now to this new level in 2023.
Capital expenditure is forecast to be in a range of $1.3 to $1.75 billion this year, while planning to maintain the leverage ratio target below 2.0x.
The final dividend for 2022 is expected to increase by a minimum of 5 percent, in line with the highly competitive and progressive 5-for-5 dividend policy demonstrating a commitment to sustained value creation for shareholders.
Abdulrahman Abdulla Al Seiari, Chief Executive Officer of Adnoc Drilling, said, “I am proud of the outstanding results that Adnoc Drilling has delivered over the past 12 months. These record results were enabled by our clear strategic objectives, the hard work of our highly-skilled and dedicated workforce, and our commitment to industry-leading health and safety standards.
“We are excited about the year ahead as we accelerate our business growth and build out our assets to enable Adnoc to realise its 2027 capacity targets, and we have released updated guidance accordingly.”