ADES expansion in Southeast Asia on track; backlog reaches SAR 28.1B: CEO

Mohamed Farouk, CEO of ADES Holding Co.

ADES Holding Co.’s expansion into Southeast Asia is on track, with all three rigs in India operational and the Emerald rig relocated from Qatar to Indonesia, which began operations in June 2024, CEO Mohamed Farouk said.

In an interview with Argaam, Farouk mentioned that all six onshore rigs contracted in Kuwait were fully operational by H1 2024, reaching full capacity by April 2024.

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He also highlighted that the total number of rigs reached 87 (49 offshore and 38 onshore) by the end of Q2 2024, up from 85 rigs (49 offshore and 36 onshore) during the same period last year.

Farouk reported that the total backlog of contracts amounted to SAR 28.05 billion in the first half of 2024, underscoring the company’s focus on sustainable long-term growth.

Regarding Q2 profit increases, the CEO noted that the 91.1% rise in net profit attributable to shareholders was driven by revenue growth, higher EBITDA margins, normalized interest and depreciation expenses following rig deployments in Saudi Arabia, Kuwait, Algeria, and India.

In Q2, Saudi Arabia led with SAR 1.06 billion in revenue, accounting for 69.8% of the total. Kuwait followed, contributing SAR 167 million (10.9%), while Egypt generated SAR 107 million, representing 7% of the total revenue.

Revenue growth was primarily fueled by 19 rigs within the Aramco project, compared to seven in Q2 of the previous year, and new contributions from three rigs in India. Increased revenue from Kuwait and Algeria also played a role, with Kuwait benefiting from 10 operational rigs (up from six) and Algeria from five compared to two a year ago.

Farouk reaffirmed the group’s financial guidance for 2024, projecting EBITDA between SAR 2.89 billion and SAR 3.04 billion, with no expected changes to its operating fleet.

He added that the group is advancing its rig deployment plan, with operations starting in Indonesia and Qatar in June and July, respectively. New deployments are anticipated in Thailand and Egypt in the second half of 2024, Farouk said.