Ades q1 2019 trading update – strong start to year, full year in line with expectations

London & dubai, united arab emirates--(business wire)--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 financial and operational performance over the three months ended 31 march 2019 and on recent positive developments post the reporting period. the financial information included below is unaudited. q1 2019 financial and operational highlights financial highlights q1 2019 revenue increased to us$ 108.7 million, up by 2.6 times compared to q1 2018 (us$ 41.2 million) and 1.4 times versus h1 2018 (us$ 79.7 million). profit margins are in line with expectations. backlog as of 31 march 2019 at us$ 1.5 billion (fy 2018: us$ 1.2 billion). cash and cash equivalents have decreased to us$ 23.6 million as of 31 march 2019 (fy2018: us$ 130 million), giving a net debt as of 31 march 2019 at us$ 533.2 million. the decrease in cash was driven by the completion of the weatherford transaction in algeria and iraq for us$ 72 million and planned capital expenditure associated with the acquisitions. operational highlights recordable q1 injury frequency rate (rifr) of 0.28, versus iadc worldwide standard rate at 0.681. growing q1 utilization rate of 92% (q1 2018: 77%). completed the weatherford transaction, integration on track. secured first deep water drilling services contract in the egyptian mediterranean basin using the group’s asset light model. renewed six contracts in ksa for the recently acquired rigs from weatherford for three years each. secured two new contracts for new-build rigs in ksa for a tenure of seven years each. recent news flow ades secured additional ksa facility – may 2019, ades secured an additional sar 540 million (us$ 144 million) top-up to the sar 525 million (us$ 140 million) credit facility from alinma bank, one of the leading saudi arabia based financial institutions. ades closes usd denominated bond offering – april 2019, ades closed its offering of us$ 325 million in aggregate principal amount of 8.625% senior secured notes due in 2024. secured a b+ credit rating from s&p and fitch. bond proceeds were used for debt refinancing. secured a b+ credit rating from s&p and fitch. bond proceeds were used for debt refinancing. ades secured new contracts in algeria – april 2019, ades secured two new contracts for its onshore rigs ades 2 and ades 3. the ades 2 contract comprises one firm well and four optional wells and adds an estimated backlog of us$ 8 million. the ades 3 contract was signed for two years firm and one year optional and will add an estimated backlog of us$ 19 million. outlook trading in q1 2019 has been positive and with the addition of incremental revenues from the now completed weatherford acquisition and new algerian contracts, this will drive sequential progress during q2 2019. we are trading in line with current expectations for fy 2019 with strong revenue visibility underpinned by the contracted backlog. dr. mohamed farouk, chief executive officer of ades international said: “we delivered a strong operational performance in the first quarter of the year, significantly accelerating revenue growth which increased by almost threefold compared to q1 2018. our results were supported by the steady ramp up of utilisation rates and the increasing contribution from the 2018 acquisitions.in line with our goal to optimise the group’s capital structure and cost of funding, we have successfully completed a us$325 million bond offering and extended our ksa facility with a us$ 144 million top-up. together, these facilities have strengthened our balance sheet and provide ample liquidity for our capital expenditure requirements.our focus remains on extracting synergies and properly integrating the recently acquired rigs, tendering activity and maintaining excellent customer service and asset utilisation. ades’ growing order backlog combined with improving end markets and higher utilisation rates provide significant growth potential and visibility, underpinning our confidence for 2019 and beyond.” 1 according to the latest published isp report by iadc as of announcement date
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