TIDMADES
RNS Number : 8385H
ADES International Holding PLC
08 December 2020
For the purpose of the Transparency Directive the Home Member
state of the issuer is the United Kingdom.
ADES International Holding PLC
Q3 2020 Trading Update
London, 8 December 2020
Trading update - ADES continues to deliver resilient results
(London & Dubai, 8 December 2020) ADES International Holding
PLC. ("ADES" or the "Group") , a leading oil & gas drilling and
production services provider in the Middle East and North Africa
(MENA), updates the market on its performance over the nine-month
period ending 30 September 2020 ("9M 2020").
Financial and Operational Highlights
-- Revenue of US$ 349 million for 9M 2020, compared to US$ 342
million for the same period of 2019, representing a 2% year-on-year
increase, despite this year's unprecedented global challenges.
Revenue in Q3 2020 was US$ 100 million, reflecting lower
utilization rates.
-- EBITDA margin in the quarter was in line with H1 2020.
-- Backlog of US$ 1.02 billion as at 30 September 2020.
-- The year-to-date utilization rate stood at 90% (9M 2019: 95 %).
-- Cash and cash equivalents of US$ 96.4 million as at 30
September 2020 (30 June 2020: US$ 125.6 million), with a net debt
of US$ 651.6 million (30 June 2020: US$ 621.4 million). The
increase in net debt from the half year figure is attributable to
capital expenditure, the relatively lower revenue
quarter-on-quarter, broadly neutral working capital and the ongoing
share buyback program.
-- LTM leverage ratios were well below the covenants of 4.5x and
4.25x for gross and net leverage, respectively. This follows ADES'
successful amendment of its bank covenants in late October as part
of the Group's proactive efforts during the current market
conditions.
-- Recordable YTD Injury Frequency Rate (RIFR) of 0.33(1) as of
30 September 2020, versus the IADC worldwide standard rate of
0.52(2) .
-- In respect to the two LSTK contracts in Kuwait for rigs 180
and 878 - which were delayed due to adverse market conditions as
indicated in our Interim Results announced on 22 September 2020
-the counterparty has later sought to terminate both contracts on
the grounds of force majeure. We remain in direct discussions with
the counterparty in relation to the alleged grounds of the
termination, and we believe progress is being achieved towards
reaching a positive outcome and resolution. Furthermore, it is
worth highlighting that the rigs shall be utilised in similar
opportunities in Kuwait given the quality and readiness of the
assets.
-- In June 2020, ADES announced the launch of a second share
repurchase programme highlighting the Board's confidence in the
Company's outlook and current financial position. As of 7 December
2020, the Company has purchased in total 2.53 million treasury
shares for approximately US$ 24.9 million, in turn channelling cash
back to shareholders.
(1) Per 200,000 working hours
(2) According to the latest published ISP report by IADC as of
30 June 2020
Outlook
-- Despite the global challenges of COVID-19, the Group
reiterates its FY 2020 guidance for a broadly flat performance
year-on-year.
-- Net debt figure expected to be broadly similar to the 3Q 2020 level.
-- Two new contracts secured in Egypt and KSA, announced in
early November, offering greater backlog visibility during current
market conditions.
-- One of the temporary suspended land rigs in KSA is set to
re-commence operation, following the notice of work resumption
received from the client in early December.
Dr. Mohamed Farouk, Chief Executive Officer of ADES
International said:
"I am pleased with the financial and operational performance
ADES has delivered in the quarter. During the three-month period,
ADES demonstrated its ability to adapt to the unfavourable market
conditions and continue offering our high-quality services to our
clients while delivering on our operational and financial
targets."
"T he health and safety of our employees and all our
stakeholders is our top priority, particularly with the recent
resurgence in COVID-19 cases across the world. The Group has tried
and tested health and safety protocols, and business continuity
procedures, which were introduced at the start of the pandemic.
These measures have to date allowed us to effectively mitigate the
risks posed by the pandemic and minimize the impact on our
operations.
"Despite the heightened uncertainty facing businesses worldwide,
I am confident that the relative resilience of the MENA market,
ADES' differentiated business model, our liquid balance sheet, and
our long-dated backlog see us well-positioned to weather the
current challenges. Accordingly, the Group reiterates its FY 2020
guidance for a broadly flat year-on-year performance with healthy
margins sustained."
-Ends-
Enquiries
ADES International
Holding
Hussein Badawy
Investor Relations
Officer ir@adesgroup.com +971 4355 0255
About ADES International Holding (ADES)
ADES International Holding extends oil and gas drilling and
production services through its subsidiaries and is a leading
service provider in the Middle East and North Africa, offering
onshore and offshore contract drilling as well as workover and
production services. Its c.3,500 employees serve clients including
major national oil companies ("NOCs") such as Saudi Aramco and
Kuwait Oil Company as well as joint ventures of NOCs with global
majors including BP and Eni. While maintaining a superior health,
safety and environmental record, the Group currently has a fleet of
thirty-six onshore drilling rigs, thirteen jack-up offshore
drilling rigs, a jack-up barge, and a mobile offshore production
unit ("MOPU"), which includes a floating storage and offloading
unit. For more information, visit investors.adihgroup.com
Shareholder Information
LSE: ADES INT.HDG
Bloomberg: ADES:LN
Listed: May 2017
Shares Outstanding: 43.8 million
Forward-Looking Statements
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occurrence or non-occurrence of an assumption could cause the
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