ADES Q1 2019 Trading Update – Strong Start to Year, Full Year in Line with Expectations
May 28 2019 - 4:38AM
Business Wire
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 0.681.
- 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.
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.
- Secured a B+ credit rating from
S&P and Fitch.
- 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.”
1 According to the latest published ISP
report by IADC as of announcement date
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version on businesswire.com: https://www.businesswire.com/news/home/20190528005288/en/
Enquiries
ADES International HoldingHussein Badawy,
IROir@adesgroup.com
InstinctifDavid SimonsonDinara
Shikhametovaades@instinctif.com
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