Saudi Arabia's oil and gas drilling contractor Arabian Drilling Co. (ADC), reported a Q4 2023 net profit of 183 million riyals ($488 million), 31% higher year-on-year (YoY).  

For full-year 2023, net profit was 8% higher YoY at SAR605 million, the company said in a regulatory statement on Tadawul bourse on Monday.

The net profit beat analysts’ mean estimate of SAR168.13 million for Q4 and SAR576 million for FY, according to LSEG data.

Q4 net profit increased mainly due to margin contribution of the five additional offshore rigs, partially offset by higher finance cost and tax charges. Also, FY 2022 net profit included a one-time tax effect of change in effective shareholding of SAR73.8 million, ADC said.

FY revenue was up 29% at SAR3.48 billion, mainly due to higher rig activity, as well as increased day rates of some rigs.

The driller gave a capex guidance for 2024 of up to SAR2.4 billion. FY 2023 capex was SAR1.9 billion, up 8% YoY. CitiResearch said in a recent note that "for 2025 we now expect capex to move up 10% (to $264 million) to reflect the cost of another new build rig".

ADC's board has proposed a cash dividend for the second half of 2023 of SAR2.53 per share to be paid in April 2024.

Saudi Aramco is a major client of ADC.

(Reporting by Brinda Darasha; editing by Daniel Luiz)