ADES International Holding Ltd Results for the Year Ended 31 December 2017
19 March 2018 - 10:45PM
Business Wire
ADES International Holding (“ADES” or “the Company”), the
London-listed company providing offshore and onshore oil and gas
drilling and production services in the Middle East and Africa
through its subsidiaries, announces today its full-year results for
the year ended 31 December 2017.
FY2017 Headline Figures
Revenue
Adjusted EBITDA1
Normalised Net Profit2
USD 158 million
▲ 18% y-o-y
USD 80 million
▲ 11% y-o-y
USD 50 million
▲31% y-o-y
Number of
Rigs
Av. Fleet Utilisation
in FY20173
Backlog as at 31
December 2017
14 rigs
as at 31 December 2017
78%
>90% since 2012
USD 427 million
Summary Income Statement
(USD ‘000) 2017 2016 %
change Revenues 157,590 134,116
17.5% Gross Profit 79,267 70,843 11.9% Gross Profit Margin
50.3% 52.8% -2.5 pts
Adjusted EBITDA[1]
80,318
72,227 11.2% Adj. EBITDA Margin 51.0% 53.9% -2.9 pts
Net Profit 44,574 38,013 17.3% Net
Profit Margin 28.3% 28.3% 0.0 pts
Normalised Net
Profit2 49,637 38,013 30.6%
Normalised Net Profit Margin 31.5% 28.3% 3.2 pts
Earnings per
Share (USD) 1.16 1.19 -3.0% No. of Shares
38,553,6204
31,900,000
Financial Highlights
- Revenue grew 17.5% year-on-year,
from USD 134.1 million in 2016 to USD 157.6 million in 2017.
- Gross profit grew 11.9%
year-on-year, from USD 70.8 million in 2016 to USD 79.2 million in
2017.
- Adjusted EBITDA recorded USD
80.3 million in FY2017, up 11.2% year-on-year and delivering an
adjusted EBITDA margin of 51.0%.
- Net profit rose 17.3%
year-on-year to USD 44.6 million in FY2017.
- Normalised net profit excluding
the one-time IPO expense in FY2017 stood at 49.7 million.
- Cash balances including cash
equivalents stood at USD 137.0 million at 31 December 2017,
supported by funds raised at IPO.
- Net debt stood at USD 75.5
million as at 31 December 2017.
Operational Highlights
- Maintained an exemplary safety
performance, recording over 4.34 million man hours with a
Recordable Injury Frequency Rate (“RIFR”) (per 200,000 working
hours) at 0.41, below the IADC worldwide standard rate of 0.56 as
at 31 December 2017.
- FY2017 utilisation rate
recorded 78%, which takes into account planned recertification and
upgrading projects on two offshore rigs in Egypt and two offshore
rigs in the KSA during the year. ADES maintained a six-year average
utilisation rate of 90%, above the current average Middle East
Jack-up utilisation rate of 75%5.
- Total backlog as at 31 December
2017 stood at USD 427 million, compared to USD 501 million as at 31
December 2016.
- New contract awards for Admarine
III with General Petroleum Company (GPC), Admarine 88 with Belayim
Petroleum Co. (Petrobel), while Admarine VIII was awarded a farm-in
agreement with Suez Oil Company (SUCO). Revenues from Admarine 88
and Admarine VIII contracts are expected to commence in the first
half of 2018.
- Contract renewals and
extensions, including a three-month extension for the Admarine
II jack-up barge with the Gulf of Suez Petroleum Company (GUPCO) as
well as an extension of GUPCO’s existing contract for ADES’ jack-up
rig, Admarine IV, for a further six months. Admarine V was also
renewed for a six-month period on a call-out basis with an option
to extend the contract for a further six months, while GPC renewed
its existing contract for ADES’ Admarine VI jack-up rig for a
two-year period.
- Acquisition of three operational
jack-up rigs located in the KSA for a total purchase price of
USD 83 million – payable in a combination of cash and ADES shares –
from a subsidiary of Nabors Industries Ltd (Nabors), subject to the
satisfaction of conditions precedent including the novation and
renewal of the rigs’ existing drilling contracts with a current
major client. Upon completion, the transaction will double ADES’
Arabian Gulf fleet and number of contracted rigs.
- Long-term agreement to establish a
joint venture (JV) with a subsidiary of Vantage Drilling
International (Vantage), which will see ADES operate Vantage’s
deepwater drilling units in Egyptian waters on a bareboat charter
agreement basis in line with ADES’ asset-light model and is a
natural development of its strategy.
- Finalised exclusive marketing
agreements with leading shipyards enabling ADES to market
new-build offshore jack-up rigs, including high-specification rigs,
that will allow it to deploy these assets on a revenue-sharing
basis once contracted, broadening ADES’ service offering and
allowing it to penetrate new markets as well as capture a larger
market share.
Current Trading and Outlook
- We expect 2018 to deliver continued
organic growth from existing operations with realisation of several
of the Company’s strategic efforts during 2017, including the
commencement of new contracts and securing new tenders across the
region. The Nabors acquisitions, once completed, will add to the
Company’s revenue and earnings, and as a result of the expected
timing of completion, we expect overall Company revenues to be
weighted materially towards the second half of the year.
- The Company is committed to putting in
place the necessary debt arrangements to secure and support its
current operation and future expansion. Further information on debt
transactions will be made available to the market once
concluded.
- Management is actively evaluating
acquisition opportunities that meet ADES’ criteria of being located
in the MENA region, within our core line of business and will
provide accretive value to shareholders.
Commenting on the full-year performance, Dr. Mohamed Farouk,
Chief Executive Officer of ADES International said:
“In our first full-year results following our IPO on the London
Stock Exchange in May 2017, ADES has successfully sustained its
growth trajectory and delivered a strong operational and financial
performance.
Our top-line recorded growth of 18% to USD 158 million was on
the back of continued high rig utilisation rates, well above the
current average Middle East jack-up utilisation rate of 75%6. This
growth was supported by our increasingly diversified revenue mix
across geographies.
In addition, ADES’ low-cost business model saw us maintain
EBITDA margins in excess of 50% and deliver a net profit growth
rate of approximately 17% year-on-year. Most importantly, we
continued to set the benchmark for service quality and safety
performance, with an RIFR rate of 0.41, well below the IADC
worldwide standard rate of 0.56 as at 31 December 2017.
ADES’ continued success is driven by our three-pillar growth
strategy of replenishing our backlog; actively participating in
tendering activities to expand our footprint and increase market
share; and targeting smart and value accretive acquisition
opportunities. 2017 saw the Company make significant progress on
all three fronts, having been awarded new contracts while securing
renewals and extensions for existing contracts; participated in
tenders across existing and new markets; and continued to grow our
fleet, with the recent signing of a PSA to acquire three operating
offshore jack-up rigs in the Arabian Gulf.
In line with our post-IPO growth strategy of scaling-up
operations in existing and target markets, ADES will continue to
leverage its demonstrated purchasing power and streamlined
decision-making process to swiftly act on acquisition opportunities
that meet our criteria for delivering long-term sustainable growth.
To expand the range of opportunities we are able to consider, the
Company is committed to putting in place the necessary debt
arrangements to bolster our already strong cash position following
the IPO.
We expect 2018 to deliver organic growth from existing
operations, with the realisation of several of our strategic
efforts during 2017, including the commencement of new contracts
and securing new tenders across the region, as well as from the
Nabors acquisitions, which once completed, will add to our revenue
and earnings.
Given the timing of completion of the Nabors transaction and the
resulting contribution of the three rigs to revenues, we expect
overall company revenues to be weighted materially towards the
second half of the year.”
Conference Call
ADES’ management team will present the FY2017 Results and will
be available for a Q&A session with analysts and investors
today at 14:00 BST. For conference call details, please email
ades@instinctif.com
The full announcement can be viewed here.
1 Adjusted EBITDA - Operating profit for the year before
depreciation and amortisation, employee benefit provision and other
provisions and impairment of assets under construction2 Normalised
Net Profit – Net Profit for the year before the one-time IPO
expense of USD 5.1 million during FY20173 Utilisation rate – Extent
to which ADES’ assets under contract and available in the
operational area are generating revenue throughout the contract,
calculated by dividing utilisation days by potential utilisation
days4 Based on weighted average number of shares5 Source: Clarksons
Research – Offshore Drilling Rig Monthly (February, 2018)6 Source:
Clarksons Research – Offshore Drilling Rig Monthly (February,
2018)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180319005587/en/
EnquiriesADES International HoldingHussein
BadawyInvestor Relations Officerir@adesgroup.com+2 (0)2527
7111orInstinctifDavid SimonsonLaura SyrettGeorge
Yeomansades@instinctif.com+44 (0)20 7457 2020
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