ABU DHABI, 11th February, 2022 (WAM) — ADNOC Drilling Company on Friday 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 percent year-on-year.
A press release by ADNOC Drilling said that the Company’s revenue for the 12 months increased 8.2 percent 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 46.1percent, as the Company made excellent progress on delivering further cost efficiencies.
Year-on-year, Q4 21 EBITDA grew by 2.7 percent. Over the period, EBITDA margin expanded to 45.6 percent, 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 percent over 2020, primarily driven by new rigs and rig reactivations. Year-on-year, Q4 21 revenue was $293 million, down 4 percent 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 percent 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 percent 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 percent year-on-year to $329 million. Q4 21 revenue was $98 million, up 44 percent year-on-year.
ADNOC Drilling reported a fleet utilisation rate of 96 percent for the year to 31st December 2021. The Company’s cash from operations1 increased 7 percent year-on-year to $1.085 billion, equating to cash conversion of 104 percent of EBITDA.
Capital expenditure (Capex) for the full year increased by 34 percent 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. 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 and 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 $325 million for the second half of 2021, bringing the total dividend for the financial year to $685 million, in line with the guidance we provided at the time of the IPO. We can also reconfirm our guidance objective of 5 percent annual growth in dividend per share from 2022-2026.”
Abdulrahman Abdullah Al Seiari, Chief Executive Officer of ADNOC Drilling, stated, “We will 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 program, and we are looking forward to reporting on several important milestones for the Company in the months to come.”
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.