Accelerated Oilfield Services revenue up 45% year-on-year, with improving margins. Image Credit: Supplied

Dubai: ADNOC Drilling reported a net profit of $446 million in the first half of 2023, a 18 per cent growth over the same period last year.

Revenue for the same period was up 13 per cent at $1.4 billion, driven by the Oilfield Services (OFS) and Offshore Jack-Up segments, which saw remarkable growth rates of 45 per cent and 31 per cent, respectively.

The ADX-listed company witnessed a substantial 17 per cent year-on-year increase in EBITDA for the first half, reaching $677 million. This growth was attributed to the rise in revenue along with substantial cost savings, resulting in an exceptional EBITDA margin of 47 per cent. The company's strategic efforts to expand its fleet and services offerings also contributed to a 18 per cent year-on-year surge in net profit, reaching $446 million.

Interim dividend for 2023
The company's progressive dividend policy is also evident, with the interim dividend for the current year expected to increase by at least 5 per cent compared to last year. “The interim dividend is expected to be announced in due course and distributed by the end of October 2023,” the company said in a stock market filing on Friday.

“ADNOC Drilling’s excellent financial performance in the first half of 2023 is testament to our strategy of expanding both our drilling fleet and service offering while also improving our margins through strong cost performance,” said Abdulrahman Abdulla Al Seiari, CEO, ADNOC Drilling. “Moreover, we progressed on our goal to expand the fleet, signing agreements to build 16 hybrid powered land rigs, which also form a significant additional element of our decarbonization strategy.”

Strong growth in Offshore Jack-up and OFS segments

ADNOC Drilling experienced robust growth in its Offshore Jack-Up and OFS segments. The Onshore segment's half-year revenue of $701 million was in line with the previous year, as new rigs entering the fleet offset lower year-on-year cost escalation claim reimbursements due to a reduction in diesel prices. The Offshore Jack-Up segment's half-year revenue soared by 31 per cent to $376 million, primarily due to the introduction of five new jack-ups into the operational fleet in the second half of 2022.

The Offshore Island segment recorded a modest 2 per cent year-on-year revenue increase to $103 million in the first half, while the OFS segment experienced substantial revenue growth of 45 per cent year-on-year, amounting to $260 million, driven by expanded activity across its entire portfolio.

During the period ADNOC Drilling signed contracts worth over $2.4 billion, including a $2 billion offshore jack-up contract award and a $412 million integrated drilling services contract. The company also signed sale and purchase agreements for the acquisition of two premium offshore jack-ups and 16 newbuild hybrid power land rigs, in line with its commitment to decarbonize operations.