Energy

Arabian Drilling profit slips 34% on higher finance costs

By Pramod Kumar

November 6, 2023, 5:33 AM

Arabian Drilling's revenue rose to SAR2.49 billion for the first nine months of 2023, driven by growing rig activity and higher prices

Arabian Drilling Company said its third-quarter 2023 net profit declined 34.27 percent to SAR140 million ($37.32 million) from SAR213 million in Q3 2022 due to higher finance costs.

The Saudi-listed oilfield services company’s revenue grew 31.05 percent annually to SAR920 million, primarily due to the start-up of three additional offshore rigs on five-year contracts.

Net profit for the year to September 2023 remained flat at SAR422 million year on year.

Consolidated revenue rose to SAR2.49 billion, a 27 percent increase year on year, driven by growing rig activity and higher prices, mainly in the offshore segment.

Capex spending increased 10 percent annually to SAR568 million in Q3 2023. Capex reached 46 percent higher at SAR1.35 million in the first nine months.

The company’s cash position was estimated at SAR1.3 billion as of September 30, 2023, including SAR875 million in short-term investments.

As of September 30, 2023, the backlog reached an all-time high of SAR12.7 billion, with an average remaining contract tenure of 2.5 years per rig for the active rigs.

Contracts announced include an award for 10 new unconventional rigs and multiple Aramco contract extensions, including a 10-year extension for an already operational offshore rig.

“As previously announced, we currently have a record high backlog following multiple contract awards and extensions, which gives us good visibility in terms of revenue and margin growth for the next few years,” said Arabian Drilling CEO Ghassan Mirdad.

“We are now focusing on delivering the new 10-rig unconventional package over the next few quarters. In parallel, we keep looking at the next phase of our growth through opportunities to expand further, both organically and acquisitively,” he added.