(Alliance News) - ADES International Holding PLC said Friday its pretax profit dipped on higher overall costs in the first half of 2019, despite revenue more than doubling in the period.
For the six months to the end of June, the drilling services provider reported pretax profit of USD16.3 million, down 15% from USD19.1 million the year before.
The profit fall was largely due to higher finance costs at USD52.7 million from USD14.4 million, mainly coming from higher loan fees and loan interest expenses.
There were also one-off acquisition costs of USD4.4 million, and USD4.6 million in the fair value loss on a derivative financial instrument.
Meanwhile, revenue more than doubled to USD219.9 million from USD79.7 million the prior year, driven by the ramp-up of utilisation rates on ADES International's rigs to 95% from 80%.
ADES's revenue also grew on the higher number of operating rigs to 36 from 14, as well as new contracts for several rigs in Saudi Arabia.
As at June 30, ADES International reported a backlog of USD1.5 billion, up from USD1.2 billion at the end of December, with an average weighted maturity of 4.2 years.
Looking ahead, the group expected continued growth in the second half of 2019, driven by a strong backlog, and the deployment of newly contracted rigs.
"ADES stands today with an asset base of over 50 rigs, the majority of which were acquired with a contracted backlog and short payback periods, and we are enjoying today a substantial and long-dated backlog of USD1.5 billion with an average maturity of 4.2 years," said Chief Executive Officer Mohamed Farouk.
"This low-risk approach to acquisitions coupled with ADES's lean cost structure, cultural alignment and adherence to global best practices, provides a solid platform for organic growth and positions the group as a regional champion," Farouk added.
Shares in ADES International were down 1.6% at USD12.70 on Friday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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