ADES backlog at SAR 26.9B, revenue likely to grow in 2025: CEO
ADES Holding Co. 's CEO Mohamed Abdul Khaleq stated that the group's backlog totaled SAR 26.9 billion on March 31, 2025, with added projects reaching SAR 148 million.
In an interview with Argaam, he indicated that the added backlog includes two contracts in Nigeria for the Admarine 504 and 501 rigs, following their transfer from Saudi Arabia.
He also noted that the company concluded new contracts worth SAR 2.08 billion after the end of the first quarter, including renewals in Egypt with the Egyptian General Petroleum Corporation (EGPC), a contract renewal for a jack-up offshore platform in Saudi Arabia, and a long-term contract for the Admarine 511 platform in Brazil.
Commenting on Q1 performance, the CEO said that the pace of operating results remains strong, backed by increasing contributions from India, Southeast Asia, and Algeria, as well as stable performance in Egypt, where ADES is implementing a production model for obsolete fields.
The top executive also highlighted that the margin stability reflects the strong performance before interest, taxes, depreciation, and amortization, despite the increase in depreciation and interest expenses to revenue.
Furthermore, the revenues generated from outside the Kingdom accounted for 38.9% of topline during the first quarter, in line with ADES's global expansion strategy, he noted.
Below are the details of the group's revenue by geographical region (SAR mln)
Country
Q1 2025
Q1 2024
Change
Saudi Arabia
898.8
1105.8
(18.7%)
Southeast Asia
137.5
-
-
Egypt
136.9
117.5
16.6 %
Kuwait
109.6
152.0
(27.9%)
Qatar
74.0
87.2
(15.1%)
India
61.1
39.8
53.6%
Algeria and Tunisia
52.1
29.7
75.4%
Total
1470.1
1532.1
(4.0 %)
ADES continues to leverage its flexible operating model, diversified regional and global presence, and significant financial flexibility, supporting its future outlook for continued growth by expanding into existing and new markets, said the top executive.
As for capital expenditures, the CEO said that the group has allocated recurring capital expenditures for 2025 ranging between SAR 500-600 million, focused on the maintenance of operating platforms, adding that these expenses are a natural part of the business cycle and do not affect the company's ability to generate free cash flow.
'ADES was able to distribute dividends representing 60% of its H2 2024 profits, amounting to SAR 242 million, in addition to previous dividends of the same proportion,' said Abdul Khaleq.
He also noted that ADES recently increased its syndicated credit facility by $3 billion, thus strengthening its financial position and its readiness to seize merger and acquisition opportunities when they arise.
Concerning the outlook for the oil market, he stated that management believes that long-term fundamental supply and demand factors will continue to give an edge to the company's high-performance, in-demand fleet, especially given the high pace of bidding activity in key markets across Southeast Asia, the Middle East, and West Africa.
ADES currently leads the global offshore jack-up rig sector, while also having a strong presence in the onshore drilling sector, operating 91 rigs across 12 countries, he noted.
'This achievement and expansion are not limited to numbers, but is driven by a disciplined and flexible approach, a business model that is resilient to market cycles, and equipped for growth,' said the CEO.
He added that the company, upon entering new markets and continuing to improve its fleet, has been able to meet emerging challenges with remarkable resilience, paving the way for a future of sustainable growth and industry leadership.
The top executive also expects demand for jack-up rigs to increase amid tight supply, resulting in commercial utilization rates in the global jack-up rig market remaining stable at around 90% during the period from 2025 to 2030.
Historically, oil production levels have not been affected by oil price fluctuations, which provides a clear view of the drilling sector's performance in the medium to long term, given that drilling activity is not directly affected by oil prices but rather depends primarily on production levels, according to the top executive.
Regarding his expectations for 2025, the CEO stated that the group expects a gradual improvement in revenues by the fourth quarter of 2025, with the completion of the rig commissioning process and the contribution of all contracted rigs. He expects Q1 2025 results to be the lowest of the year due to the scheduled requalification and rig transfer operations that were expected to occur during the previous period.
Abdul Khaleq also confirmed the company's announced financial estimates for 2025, with EBITDA to range between SAR 3.28 -3.39 billion, with growth of 8-12% year-on-year, backed by improved rig operations, higher rig utilization rates, and the group's growing regional presence.
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