ADES: Over 50% of revenue generated outside GCC as international expansion offsets rig suspensions

Mohamed Farouk, CEO of ADES Holding Co.

Over half of ADES Holding Co.’s revenue is now generated from markets outside the Gulf Cooperation Council (GCC), reflecting its ongoing geographic expansion and diversification strategy, CEO and Vice Chairman, Mohamed Farouk said.

In an interview with Argaam, he said Shelf Drilling, existing international operations, and the exploration and production segment contributed approximately SAR 985 million in additional earnings before interest, taxes, depreciation, and amortization (EBITDA) during the first nine months of 2026.

These contributions helped the group offset the negative impact of suspensions affecting several rigs in Saudi Arabia and Qatar, which amounted to approximately SAR 348 million in EBITDA.

Excluding the impact of the rig suspensions, adjusted EBITDA would have reached approximately SAR 3.52 billion, up 39% year-on-year (YoY), while adjusted net profit would have amounted to around SAR 821 million, an increase of approximately 35%.

He stressed that diversification has helped build a larger, more resilient business platform with a more balanced geographic footprint, reducing the group's reliance on any single market and strengthening its ability to withstand regional disruptions.

SAR 37.7B backlog

Farouk said the group reaffirmed its 2026 EBITDA guidance of SAR 4.5 billion to SAR 4.87 billion.

The group's backlog stood at approximately SAR 37.69 billion, while rig utilization reached 98%, providing greater visibility into its earnings base and expected performance in the coming period.

He added that Q4 2026 will benefit from the commencement of new contracts, the full contribution of rigs that began operations in Q3, improved performance in the exploration and production segment, and operational cost savings.

Debt reduction remains a priority

Regarding the group's financial position, Farouk said net debt stood at approximately SAR 19.66 billion, reflecting debt associated with the acquisition of Saipem's assets, in addition to the cash impact of regional disruptions.

Excluding debt related to the Saipem deal, lost earnings, and insurance costs, net debt would have remained broadly stable at approximately SAR 18 billion.

He noted that the group aims to gradually reduce leverage, supported by converting its backlog into revenue and generating annual post-interest free cash flow equivalent to approximately 8% to 10% of total debt.

War-risk insurance costs decline

Regarding war-risk insurance costs, Farouk said they totaled approximately SAR 184 million during the first nine months of 2026.

Quarterly costs declined from around SAR 96 million in Q2 to SAR 42 million in Q3, while monthly payments currently stand at approximately SAR 9.4 million to SAR 9.5 million.

According to Argaam data, ADES Holding's net profit declined to SAR 459.84 million in the first nine months of 2026, compared with SAR 597.33 million in the same period of 2025. Q3 net profit amounted to approximately SAR 94.9 million.