ADES to unveil new contracts soon: CEO

Mohamed Abdul Khaleq, CEO of ADES Holding Co.

ADES Holding Co. plans to announce several new contracts in the coming period, as discussions progress steadily, CEO Mohamed Abdul Khaleq told CNBC Arabia.

The company signed deals worth SAR 3.6 billion in April and May, raising its project backlog to a record SAR 29 billion — the highest in its history and the largest in the global drilling industry, he said.

Abdul Khaleq highlighted the recent renewal of a 10-year platform contract with Saudi Aramco, valued at SAR 1.61 billion — a 20% increase from its previous value. ADES currently has around 33 contracts with Aramco.

Saudi Aramco accounts for approximately 70% of the company’s backlog, followed by Kuwait Oil Company (12%), Qatar (4%), and Egypt (3%), with the remainder spread across other international markets.

The CEO noted that currency fluctuations in Egypt had no impact on the company’s operations there, as contracts are denominated in US dollars. For any local payments in Egyptian pounds, the Central Bank of Egypt’s exchange rate is applied, providing a natural hedge against currency depreciation.

ADES currently holds SAR 11.5 billion in debt, but its backlog — nearly three times that amount — is expected to generate SAR 14.5 billion in cash, which can be used for debt repayment and semi-annual dividends, Abdul Khaleq said.

He added that the company has no plans to issue sukuk, as its last round of financing remains largely untapped, with about $3 billion still available.

A 25-basis-point cut in interest rates would lift annual profits by roughly SAR 15 million, he added.