Adnoc Drilling profit jumps 48% on higher revenue

Revenue for the three-month period to the end of September rose 11% to $571m

Adnoc's lobby at its headquarters in Abu Dhabi. Bloomberg.

Adnoc's drilling subsidiary reported a 48 per cent increase in third-quarter net profit, backed by its onshore and oilfield services segments.

Net profit climbed to $178 million, from $120m in the same period a year earlier, Adnoc Drilling said in a regulatory filing on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the three-month period to the end of September rose 11 per cent to $571m.

“With double-digit revenue growth, Adnoc Drilling has demonstrated exceptional financial performance and commercial resilience, reflected in a very robust third quarter," said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.

"These impressive results follow Adnoc Drilling’s record ADX listing in early October and were well above market forecasts."

Adnoc Drilling raised more than $1.1 billion in September from its initial public offering.

Adnoc maintains its majority 84 per cent stake in Adnoc Drilling while US energy services company Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, has a 5 per cent stake and US contract oil and gas driller Helmerich & Payne holds 1 per cent.

Adnoc Drilling's capital expenditure for the third quarter surged to $171m, from $21m in the same period a year ago. The company's capital expenditure increased more than threefold in the first nine months of the year to $454m.

The company's nine-month net profit rose 9 per cent to $460m, while revenue climbed 12 per cent to Dh1.7bn. Performance during the first nine months of the year was supported by growth in revenue from Adnoc Drilling's onshore operations, which increased 10 per cent to $847m. Third-quarter revenue for this segment increased 9 per cent to $279m.

Revenue of the company's offshore jackup portfolio rose 2 per cent to $157m in the third quarter. Revenue at Adnoc Drilling's offshore island and oil field services segments grew 11 per cent to $166m and 50 per cent to $231m in the first nine months of the year, respectively.

The company's earnings before interest, tax, depreciation, and amortisation increased 11 per cent to $785m in the first nine months of 2021.

"As we look to the final quarter and to 2022, we see our operations returning to normal post-pandemic and we expect to continue to make significant progress in the execution of our long-term strategy," said Adnoc Drilling chief executive Abdulrahman Al Seiari.

The company plans to pursue growth by issuing a number of mega-tenders to expand its discrete services portfolio.

After its IPO, Adnoc Drilling was included in three of FTSE Russell’s global indices – the FTSE Emerging Index, the FTSE Global Large Cap Index and the FTSE All-World Index.