ADNOC Drilling Announces Strong 1Q 2023 Year-on-Year Earnings Growth, Driven by Accelerated Rig Fleet and Service Offering Expansion - Drilling

ADNOC Drilling Announces Strong 1Q 2023 Year-on-Year Earnings Growth, Driven by Accelerated Rig Fleet and Service Offering Expansion 

Net profit increases by 25% year-on-year, supported by increased activity coupled with improved operational efficiencies

Revenue growth of 19% year-on-year, enabled by new rigs entering the operational fleet in second half of 2022

Oilfield Services segment leads performance, recording revenue growth of 43% year-on-year 

ADNOC Drilling reiterates its fiscal year 2023 guidance initiated in February


Abu Dhabi, UAE – May 11, 2023: ADNOC Drilling Company PJSC (“ADNOC Drilling” or the Company”) (ADX symbol: ADNOCDRILL / ISIN: AEA007301012) today announced strong financial results for the first quarter ending March 31, 2023.

ADNOC Drilling’s first quarter revenue increased to $716 million, up 19% year-on-year. Revenue growth was achieved across all segments, with Offshore Jack-up and Oilfield Services (OFS) leading the way, increasing 28% and 43% respectively. EBITDA growth tracked the uptick in revenue, also increasing 19% to $333 million. Net profit for the quarter reached $219 million, up 25%  year-on-year.

First quarter 2023 revenue was 2% lower than fourth quarter 2022 due to fewer calendar days and lower impact from reimbursement of cost escalation claims. These drivers brought EBITDA sequentially down by 6%.

ADNOC Drilling continues to capitalize on its unique position as a critical enabler of ADNOC’s plans to responsibly accelerate production capacity growth, as global demand for energy continues to rise.

Abdulrahman Abdulla Al Seiari, Chief Executive Officer, ADNOC Drilling,  commented: “Our first quarter results are particularly pleasing as they clearly demonstrate the effective execution of our strategy, to grow earnings by expanding our fleet and our offering, for the benefit of our customers and our shareholders. 

“To maximize value for shareholders now and into the future, we will continue to secure high-quality, long-term contracts that offer superb future earnings visibility, as well as protection against market volatility. At the same time, we will maintain our focus on operational excellence and sustainable operations, as well as capitalize on our unique position within the market as we remain firmly on track to deliver our 2023 guidance.” 

Strong growth for Offshore Jack-up and OFS segments
  • Onshore: Revenue was significantly higher than in the prior year, as a result of eight new land rigs entering the operational fleet in the second half of 2022. First quarter 2023 revenue stood at $355 million, up 11% year-on-year. Revenue decreased sequentially, as the fourth quarter of 2022 benefitted more than the first quarter 2023 from reimbursement of cost escalation claims, particularly on diesel prices. 
  • Offshore - Jack-up: Revenue came in at $184 million, up 28% compared to the prior year period, due to introduction of five new jack-ups into the operational fleet in the second half of 2022. Revenue increased sequentially by 2% versus fourth quarter 2022.  
  • Offshore - Island: Revenue remained steady at $51 million, broadly stable versus previous quarter and year-on-year.
  • Oilfield Services (OFS): Revenue grew to $126 million, up 43% year-on-year, due to increased activity volume across the entire portfolio. Revenue increased sequentially by 2% versus fourth quarter 2022.

In the first quarter of 2023, ADNOC Drilling announced the signing of an agreement to purchase ten newbuild hybrid power land drilling units in direct response to ADNOC’s accelerated production capacity targets and sustainability plans. The new hybrid rigs utilise high capacity batteries to improve power delivery while reducing greenhouse gas emissions by up to 15%. During the quarter, the Company also announced the signing of a Memorandum of Understanding with Masdar to explore geothermal energy opportunities, supporting the responsible advancement of the energy transition in the UAE and globally.

ADNOC Drilling reiterates its fiscal year 2023 guidance communicated in February 2023, to deliver revenue of between $3.0 - $3.2 billion for the full-year period, with EBITDA of $1.35 - $1.5 billion at an industry-leading EBITDA margin of 45% - 47%, and net income of $0.85 - $1.0 billion. Capital expenditure1 is forecast to be in a range of $1.3 - $1.75 billion this year, while the Company plans to maintain the leverage ratio below 2.0x2 .
The Company remains committed to annual growth in its dividend per share of at least 5% per annum over the four years from 2023 to 2026.

Key Financial Metrics

USD Millions 1Q 2023 1Q 2022 % Change Q4 2022 % Change
Revenue 716 601 19% 733 -2%
EBITDA 333 280 19% 353 -6%
Net Profit 219 175 25% 233 -6%
Earnings per share (USD/share) 0.014 0.011 25% 0.015 -6%
Capital Expenditure4 76 78 -3% 434 -82%
Cash from Operations5 226 613 -63% 389 -42%


1Capital expenditure – additions to property and equipment including prepayments
2Net debt to EBITDA


Release Details

  • May 11, 2023
  • Abu Dhabi, UAE