ADNOC Drilling announces net profit of $604m for 2021

ADNOC Drilling Company has announced its financial results for the fourth quarter (Q4) and full year ending December 31, 2021.

The company’s revenue for the 12-month period increased 8.2 per cent to $2.27bn compared to the same period last year. Year-on-year (YoY) revenue growth was led by the onshore segment, resulting from an increased grow production capacity. Revenue for the full year was $1.14bn, up 6 per cent over 2020, largely driven by new rigs and rig reactivations.

The company’s Oilfield Services (OFS) division also significantly grew both its revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) YoY. The division’s revenue for the full year increased 48 per cent YoY to $329m.

The year’s EBITDA was $1.047bn, with a margin of 46.1 per cent, as the company made progress on delivering further cost efficiencies. Net profit for the full year was $604m, up 6 per cent year YoY.

Year on year, 2021’s Q4 EBITDA grew by 2.7 per cent. Over the period, the EBITDA margin expanded to 45.6 per cent, reflecting, in part, active management of centrally allocated expenses in the quarter. Revenue growth was strongest in OFS, and it helped offset weaker fourth quarter revenues in drilling segments, leaving Q4 2021’s revenues essentially flat versus the same period last year. Year on year underlying operating performance was stable. The financial performance was lower as a result of non-recurring drilling revenues booked in the prior comparative year.

ADNOC Drilling reported a fleet utilisation rate of 96 per cent for the year to December 31, 2021. The company’s cash from operations increased 7 per cent YoY to $1.085bn, equating to cash conversion of 104 per cent of EBITDA. Capital expenditure for the full year increased by 34 per cent to $505m in 2021. Capex in Q4 was slightly lower than in Q3, as rig acquistions were mostly executed in the previous quarter.

ADNOC Drilling anchors 2021 with $2.27b revenue, net profit at $604m https://t.co/3RR0gPW1Il

— Abdul Hamid Ahmad (@AbdulHamidAhmad) February 11, 2022

Commenting on the financial results, Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC MD Director and group CEO, and chairman of ADNOC Drilling, said: “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. The strong full year results and successful strategic execution are testament to the vital role that the company is playing in enabling significant production capacity growth for ADNOC as well as the UAE’s objective to achieve gas self-sufficiency.

“In light of strong performance in 2021, the board is pleased to recommend a final dividend of $325m for the second half of 2021, bringing the total dividend for the financial year to $685m, in line with the guidance we provided at the time of the IPO. We are also able to reconfirm our guidance objective of 5 per cent annual growth in dividend per share from 2022-2026.”

Abdulrahman Abdullah Al Seiari, CEO of ADNOC Drilling, added: “We remain very enthusiastic about the year ahead as we build out our drilling assets and Oilfield Services with our strategic partners Baker Hughes and Helmerich & Payne. Technology and innovation will be at the heart of that programme, and we are looking forward to reporting on a number of important milestones for the company in the months to come.”