(Alliance News) - ADES International Holding PLC on Tuesday said profit almost halved in 2019, despite increased revenue, as the oil field services provider expressed confidence in its position amid the Covid-19 pandemic.
The stock was untraded on Tuesday afternoon in London, last closing at USD8.50 each.
Pretax profit was USD40.9 million in 2019, down 47% from USD77.1 million in 2018. This was despite revenue more than doubling to USD477.8 million from USD205.6 million.
Finance costs more than doubled to USD88.7 million from USD31.2 million in 2018. Administrative expenses were USD52.5 million, also doubling from USD24.0 million.
However, normalised net profit was USD72.7 million in 2019, ADES said, up from USD44.7 million in 2018.
No dividend was proposed for either year.
Revenue growth was attributed to an increased contribution from acquired Weatherford and Nabors rigs which contributed 64% of revenue compared to 24% in 2018, as well as organic growth of 10% driven by better utilization and the deployment of two new onshore rigs in Saudi.
During the period, ADES bought 31 drilling rigs from Weatherford International PLC and three rigs from drilling contractor Nabors Industries.
Looking ahead, the company said that while the Covid-19 pandemic has not hurt its business so far, it has plans in place to mitigate potential risks, and it remains confident that it is in a "strong position" to maintain its existing business.
"2020 has started as expected and, whilst we are closely monitoring the impact of Covid-19 and the low oil price environment, our operations to date have not been significantly impacted. We are confident that the group is well positioned to weather these tough end market conditions underpinned by the order book cover, low cost operating model and the Middle East and North Africa region focus," said Chief Executive Mohamed Farouk.
As at the end of 2019, ADES had cash of USD120 million and undrawn banking facilities of around USD100 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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