ADES CEO says rig additions boost profit growth, 75% of revenue from Aramco

ADES CEO says rig additions boost profit growth, 75% of revenue from Aramco

ADES Holding Co.'s Q1 2024 profit growth was driven by an increase in revenues, coupled with the company's proactive step of hedging for about 60% of its loans, which helped slash costs to about 4%, according to CEO Mohamed Farouk. Speaking with Al Arabiya TV, the top executive said that the growth in ADES Q1 revenues was driven by rig additions since the first months of last year, with six drilling rigs added to the company's operations in Kuwait and three others operated in India. The company successfully operated 19 rigs for Aramco within about 15 months, which is an unprecedented achievement globally, as Aramco applies the highest standards in the world. This confirms that ADES serves as a model for the localization of this strategic and vital industry in the Kingdom, Farouk added. Regarding earnings before interest, taxes, depreciation, and amortization (EBITDA), the CEO explained that the majority of the company's revenues came from offshore rigs, which typically have high margins due to their scarcity and high prices. He went on to say that offshore rigs account for about 80% of the company's revenue, noting that there are only 400 floating drilling rigs in the world, 49 of which are owned by ADES, making it the dominant player in this field. There is no company in the world manufacturing new offshore rigs currently, which means that usage will increase, according to the CEO.