LONDON (Alliance News) - ADES International Holding Ltd on Monday said its profit grew in the first half of 2018 despite a decline in revenue.
The drilling services provider said pretax profit increased to USD22.2 million in the six months to the end of June, up from USD18.7 million reported a year earlier.
ADES said the result includes a USD11.7 million one-off bargain purchase gain related to its Nabors rigs acquisition, representing the difference between the fair value of USD96.1 million and the acquisition price of USD84.4 million.
General & administrative expenses were higher year-on-year at USD13.1 million compared to USD9.3 million. The company also booked a USD1.3 million provision for impairment of trade receivables.
Revenue fell 9.3% to USD79.7 million from USD87.9 million, weighed down by lower utilisation of the company's employed rigs to 80% from 87%.
Lower utilisation resulted from the recertification and upgrading projects, ADES said, as well as contract expiry of the ADES II rig in Algeria, which is currently in re-tendering process.
In Algeria, where the company currently has two onshore rigs, revenue decreased by 54% year-on-year to USD5.7 million in USD12.4 million.
Revenue in Egypt decreased by 5.3% to USD44.3 million from USD46.8 million, while revenue in Saudi Arabia rose by 3% to USD29.6 million from USD28.7 million, driven by revenue contributions from 19 days of operations from the recently acquired Nabors rigs.
ADES said it expects the full impact of the Nabors acquisition to be weighted towards the second-half as the rigs began operations in mid-June.
"Our performance during the first half of the year reflects ADES' increasing efficiency and ability to extract higher value from its operations," said Chief Executive Mohamed Farouk.
"Following a period of aggressive growth, our group today is well-equipped in terms of assets, manpower, and regional footprint to fully capitalise on the market's uptrend," added Farouk.
Shares in ADES were trading 0.2% higher on Monday at USD13.95 each.
