ADES CEO says int’l contracts rise to 32%

Mohamed Abdul Khaleq, CEO of ADES Holding Co.

ADES Holding Co.'s CEO Mohamed Abdul Khaleq stated that international contracts accounted for 32% of the company’s total backlog by the end of 2024, up from 22% in the previous year.

In an interview with Argaam, he attributed this growth to ongoing efforts to diversify business operations behond Saudi Arabia.

International contracts, according to the CEO, had a significant impact on ADES’ Q4 2024 results. Newly secured contracts required higher daily rental rates than those in Saudi Arabia, reflecting ADES’ strategic focus on global expansion.

The company expanded into new markets like Nigeria and Thailand, besides acquiring two jack-up rigs from Vantage Drilling International Ltd. in Malaysia and Indonesia. Consequently, this strengthened ADES’ foothold in high-growth regions and reinforced its commitment to geographical diversification, he added.

Abdel Khaleq attributed the 24% year-on-year (YoY) rise in the company’s Q4 2024 net profit to a 23.3% revenue hike and a 7.7% growth in EBITDA. The bottom line also reflected gains from the acquisition of Vantage Drilling’s jack-up rigs, albeit the allocation of a non-cash tax provision and one-off expenses offset some of these gains.

Total Q4 revenues stood at SAR 1.57 billion, with SAR 959.7 million from Saudi Arabia. Meanwhile, Kuwait generated SAR 125.54 million, while another SAR 135.58 million came from Egypt, SAR 103.54 million from Qatar, SAR 57.08 million from Algeria and Tunisia, SAR 60.23 million from India, and SAR 127.4 million from Southeast Asia, the CEO explained.

On capital expenditure (capex), Abdel Khaleq said the company spent SAR 3.08 billion in 2024, including SAR 712.1 million for the Vantage-related acquisition.

Recurring capex for rig maintenance reached SAR 444.1 million. In 2025, recurring capex is expected to range between SAR 500-600 million, excluding potential acquisitions or rig refurbishments.

He pointed out that the company’s backlog rose to SAR 28.27 billion by the end of 2024, up from SAR 27.54 billion in the year before. Despite generating SAR 6.2 billion in revenue, ADES secured SAR 7 billion in new contract awards during the year.

ADES is actively bidding for multiple tenders, leveraging its global reach while focusing on high-potential markets in West Africa and Southeast Asia. The company also aims to strengthen its presence in the Middle East, the top executive highlighted.

Looking ahead, ADES is expected to log an EBITDA growth of 8-12%, to range between SAR 3.28-3.39 billion. This uptrend will be driven by higher rig utilization rates and regional expansions.

According to Argaam’s data, ADES’ net profit surged to SAR 802.5 million in 2024, from SAR 442.1 million in 2023. The fourth-quarter bottom line neared SAR 207.1 million.