Ades Holding Co. reported a remarkable performance for the 2024 fiscal year, nearly doubling its profits compared to the previous year, reinforced by a staggering revenue increase of 43.1%. This surge in earnings was primarily fueled by ongoing expansion efforts in Saudi Arabia and the development of new revenue streams emerging from developing markets. For the twelve-month period concluding on December 31, 2024, Ades recorded a net profit of 816.2 million riyals, a considerable rise from the 452.1 million riyals reported in the previous year.
The company's robust performance was underpinned by a significant revenue increase, rising to 6.20 billion riyals from 4.33 billion riyals in the prior year. The revenue boost is attributed to Ades’ relentless local expansion initiatives, which included the deployment of new drilling rigs. The company also benefitted from new contributions generated from international markets including India, Indonesia, and Thailand.
Increased onshore drilling activities in Kuwait and Algeria further sustained the growth momentum, while improved daily rates on existing offshore rigs in both Saudi Arabia and Egypt played a pivotal role in enhancing margins. As a result, Ades' net profit margin experienced growth, expanding to 13.2% from 10.4%.
Additionally, reduced financing costs relative to revenue helped offset the impact of increased depreciation expenses, a consequence of deploying rigs across multiple regions including Saudi Arabia, Kuwait, India, Algeria, and Southeast Asia. Moreover, the net profit growth reflects a bargain purchase gain following the acquisition of two jackup rigs from Vantage Drilling International; however, these gains were somewhat tempered by a non-cash provision for various taxes and a range of non-recurring expenses. In light of these strong results, Ades' board has declared a dividend of 0.22 riyal per share for the second half of 2024, following a dividend of 0.216 riyal per share for the first half of the year.
The second interim dividend is set for disbursement on March 24, 2025, with shareholders eligible for this payout on March 10, 2025. Looking ahead, Ades Chief Executive Mohamed Farouk shared his optimistic sentiment for the company’s future, stating, “We are confident that the underlying supply-demand dynamics in our industry will continue to favour our high-performing and highly demanded fleet of optimized assets.
With strong tendering activity in markets such as Southeast Asia, the Middle East, and West Africa, we anticipate sustainable growth and profitability.” The company’s stock saw an increase of nearly 3% during afternoon trading, reflecting investor confidence in its robust financial health and positive outlook..