Arabian Drilling Company (2381) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue declined 6.9%–7.0% sequentially to SAR 765 million, with EBITDA down 13.3% to SAR 251 million and a net loss of SAR 31.5 million, mainly due to temporary offshore rig suspensions, but revenue outperformed guidance.

• H1 2026 revenue was SAR 1.6 billion, down 10.6% year-over-year, with EBITDA at SAR 540 million (34% margin), and a net loss of SAR 24.5 million, reflecting lower utilization and weaker offshore contribution.

• Backlog increased 7% year-on-year to SAR 11.8 billion, with a 3.3-year average contract tenure and a 3.6x book-to-bill ratio, providing strong visibility.

• Operational efficiencies and a cost optimization program launched in April 2026 supported margins and partially offset offshore disruptions.

• Interim financial statements for H1 2026 were reviewed by KPMG, with no material misstatements identified.

Financial highlights

• Q2 2026 revenue: SAR 764.7–765 million, down 6.9% QoQ; EBITDA: SAR 250.6–251 million, margin 32.8%; net loss: SAR 31.5 million.

• H1 2026 revenue: SAR 1,586–1,600 million, down 10.6% YoY; EBITDA: SAR 539.7–540 million, down 21% YoY; net loss: SAR 24–24.5 million.

• Operating cash flow for H1 was SAR 524 million; CapEx for H1 was SAR 355.2–356 million, down 26.8% YoY.

• Net debt stable at SAR 2.4 billion; net debt/EBITDA at 2.2x in Q2.

• Cash and cash equivalents at 30 June 2026 were SAR 489.3 million.

Outlook and guidance

• Q3 2026 revenue expected to increase 4%–6% as three offshore rigs return to service; full-year CapEx guidance unchanged at SAR 700 million.

• Utilization rates expected to exceed 85% in Q4, with offshore targeting 100% and aggregate utilization between 85%–90%.

• Net leverage expected to decline below 2.0x by year-end as earnings recover.

• Management confident in achieving guided revenue growth, with further margin improvement expected as utilization normalizes.

• Focus shifting from recovery to growth and expansion, including international opportunities.