16th Aug 2019 10:13
(Alliance News) - ADES International Holding PLC said Friday it expects earnings for the first half of 2019 to more than double, driven by significant revenue growth.
For the six months to the end of June, the oil & gas services provider said earnings before interest, taxes, depreciation and amortisation rose to USD88.0 million from USD37.8 million, reflecting a 40% margin.
This was on revenue that nearly tripled to USD219.9 million from USD79.7 million, supported by contributions from acquisitions, namely that of 31 drilling rigs from Weatherford International PLC for USD287.5 million.
As at June 30, ADES had cash and cash equivalents of USD40.3 million, up from USD23.6 million in March but down from USD130 million at the end of December. Net debt was USD614.0 million.
During the period, the group secured new banking facilities and conducted a maiden five-year bond issue to provide financial flexibility.
In addition, ADES took the decision to replace the letters of guarantee associated with the Weatherford rigs to support business growth. As a result, finance charges on a recurring basis will be higher on a full-year basis than expected. In the first half of 2019, recurring finance charges were about USD26.5 million, the company said.
"ADES delivered a strong operational performance in the first half of the year. Our results were driven by the increasing contributions from the newly acquired rigs and were further supported by the steady ramp up of utilisation rates. We will provide further detail alongside our interim results in September," said Chief Executive Mohamed Farouk.
"We expect the trend to continue into the second half and as a consequence we expect our trading performance to be in line with the board's expectations for the full year, although the higher finance charges will have a modest impact on the overall outturn for the financial year," Farouk added.
ADES International will issue its interim results on September 27.
Shares in ADES International were up 4.2% at USD13.80 on Friday.
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