TIDMADES
RNS Number : 2196A
ADES International Holding PLC
28 May 2019
For the purpose of the Transparency Directive the Home Member
state of the issuer is the United Kingdom.
ADES International Holding PLC
Q1 2019 Trading Update
London, 28 May 2019
Q1 2019 Trading update - strong start to year, full year in line
with expectations
(London & Dubai, 28 May 2019) ADES International Holding
PLC. ("ADES" or the "Group"), a leading oil & gas drilling and
production services provider in the Middle East and North Africa
(MENA), updates the market on its financial and operational
performance over the three months ended 31 March 2019 and on recent
positive developments post the reporting period. The financial
information included below is unaudited.
Q1 2019 Financial and Operational Highlights
-- Financial Highlights
-- Q1 2019 revenue increased to US$ 108.7 million, up by 2.6
times compared to Q1 2018 (US$ 41.2 million) and 1.4 times versus
H1 2018 (US$ 79.7 million).
-- Profit margins are in line with expectations.
-- Backlog as of 31 March 2019 at US$ 1.5 billion (FY 2018: US$ 1.2 billion).
-- Cash and Cash Equivalents have decreased to US$ 23.6 million
as of 31 March 2019 (FY2018: US$ 130 million), giving a Net Debt as
of 31 March 2019 at US$ 533.2 million. The decrease in cash was
driven by the completion of the Weatherford transaction in Algeria
and Iraq for US$ 72 million and planned capital expenditure
associated with the acquisitions.
-- Operational Highlights
-- Recordable Q1 Injury Frequency Rate (RIFR) of 0.28, versus
IADC worldwide standard rate at 0.68(1) .
-- Growing Q1 utilization rate of 92% (Q1 2018: 77%).
-- Completed the Weatherford transaction, integration on track.
-- Secured first deep water drilling services contract in the
Egyptian Mediterranean Basin using the Group's asset light
model.
-- Renewed six contracts in KSA for the recently acquired rigs
from Weatherford for three years each.
-- Secured two new contracts for new-build rigs in KSA for a tenure of seven years each.
(1) According to the latest published ISP report by IADC as of
announcement date
Recent news flow
-- ADES secured additional KSA facility - May 2019, ADES secured
an additional SAR 540 million (US$ 144 million) top-up to the SAR
525 million (US$ 140 million) credit facility from Alinma Bank, one
of the leading Saudi Arabia based financial institutions.
-- ADES closes USD denominated bond offering - April 2019, ADES
closed its offering of US$ 325 million in aggregate principal
amount of 8.625% senior secured notes due in 2024.
o Secured a B+ credit rating from S&P and Fitch.
o Bond proceeds were used for debt refinancing.
-- ADES secured new contracts in Algeria - April 2019, ADES
secured two new contracts for its onshore rigs ADES 2 and ADES 3.
The ADES 2 contract comprises one firm well and four optional wells
and adds an estimated backlog of US$ 8 million. The ADES 3 contract
was signed for two years firm and one year optional and will add an
estimated backlog of US$ 19 million.
Outlook
Trading in Q1 2019 has been positive and with the addition of
incremental revenues from the now completed Weatherford acquisition
and new Algerian contracts, this will drive sequential progress
during Q2 2019.
We are trading in line with current expectations for FY 2019
with strong revenue visibility underpinned by the contracted
backlog.
Dr. Mohamed Farouk, Chief Executive Officer of ADES
International said:
"We delivered a strong operational performance in the first
quarter of the year, significantly accelerating revenue growth
which increased by almost threefold compared to Q1 2018. Our
results were supported by the steady ramp up of utilisation rates
and the increasing contribution from the 2018 acquisitions.
In line with our goal to optimise the Group's capital structure
and cost of funding, we have successfully completed a US$325
million bond offering and extended our KSA facility with a US$ 144
million top-up. Together, these facilities have strengthened our
balance sheet and provide ample liquidity for our capital
expenditure requirements.
Our focus remains on extracting synergies and properly
integrating the recently acquired rigs, tendering activity and
maintaining excellent customer service and asset utilisation. ADES'
growing order backlog combined with improving end markets and
higher utilisation rates provide significant growth potential and
visibility, underpinning our confidence for 2019 and beyond."
Enquiries
ADES International
Holding
Hussein Badawy
Investor Relations
Officer ir@adesgroup.com +971 4355 0255
Instinctif
+44 (0)20 7457
David Simonson david.simonson@instinctif.com 2020
+44 (0)20 7457
Dinara Shikhametova dinara.shikhametova@instinctif.com 2020
+44 (0)20 7457
Sarah Hourahane sarah.hourahane@instinctif.com 2020
About ADES International Holding (ADES)
ADES International Holding extends oil and gas drilling and
production services through its subsidiaries and is a leading
service provider in the Middle East and North Africa, offering
onshore and offshore contract drilling as well as workover and
production services. Its c.4,000 employees serve clients including
major national oil companies ("NOCs") such as Saudi Aramco and
Kuwait Oil Company as well as joint ventures of NOCs with global
majors including BP and Eni. While maintaining a superior health,
safety and environmental record, the Group currently has a fleet of
thirty-four onshore drilling rigs, thirteen jack-up offshore
drilling rigs, a jack-up barge, and a mobile offshore production
unit ("MOPU"), which includes a floating storage and offloading
unit. For more information, visit investors.adihgroup.com
Shareholder Information
LSE: ADES INT.HDG
Bloomberg: ADES:LN
Listed: May 2017
Shares Outstanding: 43.8 million
Forward-Looking Statements
This communication contains certain forward-looking statements.
A forward-looking statement is any statement that does not relate
to historical facts and events, and can be identified by the use of
such words and phrases as "according to estimates", "aims",
"anticipates", "assumes", "believes", "could", "estimates",
"expects", "forecasts", "intends", "is of the opinion", "may",
"plans", "potential", "predicts", "projects", "should", "to the
knowledge of", "will", "would" or, in each case their negatives or
other similar expressions, which are intended to identify a
statement as forward-looking. This applies, in particular, to
statements containing information on future financial results,
plans, or expectations regarding business and management, future
growth or profitability and general economic and regulatory
conditions and other matters affecting the Group.
Forward-looking statements reflect the current views of the
Group's management ("Management") on future events, which are based
on the assumptions of the Management and involve known and unknown
risks, uncertainties and other factors that may cause the Group's
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. The
occurrence or non-occurrence of an assumption could cause the
Group's actual financial condition and results of operations to
differ materially from, or fail to meet expectations expressed or
implied by, such forward-looking statements.
The Group's business is subject to a number of risks and
uncertainties that could also cause a forward-looking statement,
estimate or prediction to differ materially from those expressed or
implied by the forward-looking statements contained in this
prospectus. The information, opinions and forward-looking
statements contained in this communication speak only as at its
date and are subject to change without notice. The Group does not
undertake any obligation to review, update, confirm or to release
publicly any revisions to any forward-looking statements to reflect
events that occur or circumstances that arise in relation to the
content of this communication.
Terms and Definitions
Backlog - The total amount payable to the Company, based on firm
commitments represented by signed drilling and services contracts,
during the remaining term of an existing contract plus any optional
client extension provided for in such contract, assuming the
contracted rig will operate (and thus receive an operating day
rate) for all calendar days both in the remaining term and in the
optional extension period.
Recordable Injury Frequency Rate (RIFR) - The number of
fatalities, lost time injuries, cases or substitute work and other
injuries requiring medical treatment by a medical professional per
200,000 working hours
Utilisation Rate - our calculation of utilisation rate refers to
our measure of the extent to which our assets under contract and
available in the operational area are generating revenue under
client contracts. We calculate our utilisation rate for each rig by
dividing Utilisation Days by Potential Utilisation Days under a
contract. Utilisation rates are principally dependent on our
ability to maintain the relevant equipment in working order and our
ability to obtain replacement and other spare parts. Because our
measure of utilisation does not include rigs that are stacked or
being refurbished or mobilised, our reported utilisation rate does
not reflect the overall utilisation of our fleet, only of our
operational, contracted rigs. For example, Admarine VIII and 88
were idle for all of 2016, yet we report a high utilisation rate
for that year because we do not include these rigs in the
denominator of its utilisation rate calculation. "Potential
Utilisation Days" are all calendar days (including holidays and
weekends) when a rig is both under contract and available in the
operational area. This does not include days when the rig is being
refurbished or initially mobilised or is otherwise idle or stacked.
"Utilisation Days" include all operating days, standby days, paid
maintenance days, and moving days for which the Group is paid a
fee.
Net Debt - is defined as total current and non-current
interest-bearing loans and borrowing less bank balances and
cash.
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END
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