Analysis: the headline profit figure and the statement behind it

The earnings release and the interim financial statements do not report the same profit. The release headlines net profit of SAR 374.1 million for the half. The interim condensed consolidated statements, prepared in Saudi riyals thousands, show profit attributable to equity holders of the parent of 394,127 for the six months against 334,615 a year earlier, and total profit of 403,275 against 340,218. The release presents no bridge between its figure and the statutory ones. A reader working from the release alone would take the profit line as falling year-over-year; a reader working from the statements would see the attributable line rising. Both documents were published by the same company on the same day, and the statements are the audited-review basis.

The margin story is the more consequential one, and here the release is explicit. Consolidating Shelf changed the mix, not the underlying pricing of ADES’ legacy contracts, and the company says it expects margins to recover as the integration of the Shelf portfolio progresses. That is a forward statement the half does not test. What the half does establish is the size of the dilution: an EBITDA margin of 47.6% against 54.9% is the first full reporting period in which the enlarged group’s economics are visible.

Leverage is where the acquisition shows up structurally. Total loans and borrowings stood at 20,566,078 at 30 June 2026 against 20,249,665 at 31 December 2025, on total assets of 31,677,705 and total equity of 6,936,428. Borrowings drawn during the period were 1,545,599 and repayments were 1,225,703, against 10,727,743 drawn and 7,652,658 repaid across the prior full year, the year the Shelf transaction closed. Cash and cash equivalents were 2,434,635. Management describes deleveraging as an objective; the half moved the borrowings balance up rather than down.

The dividend sits inside that constraint. The board recommended SAR 220.9 million for the first half, described as approximately 60% of net profit attributable to shareholders. During the same half the group paid out cash dividends of 0.24 per share totalling 265 million, the distribution declared for the second half of 2025, plus 14,845 to non-controlling shareholders of the subsidiary UPDC. The prior comparable was 0.22 per share totalling 242 million. The recommended interim distribution is therefore smaller than the amount paid out during the period, and it is recommended against a borrowings balance that rose over the half.

The Saudi line is the one to watch next. The home market fell 11.7% while the group rose 49.0%, and the reasons the company gives are specific and reversible: a rig redeployment, lower onshore activity with four rigs resuming across the first two quarters, and temporary offshore suspensions with resumption notices received for two rigs. If the Saipem portfolio closes as expected, four more rigs enter the Saudi count. The half established that the group can grow without Saudi Arabia; the second half will show whether it grows with it.

What the documents say

ADES Holding Company (Tadwaul: 2382) reported group revenues of SAR 4,544.1 million for the six-month period ended 30 June 2026, up 49.0% year-over-year from SAR 3,048.9 million, and recommended an interim dividend of SAR 220.9 million. The Al-Khobar drilling contractor released the figures on 10 August 2026. Almost all of the growth came from assets it did not own a year ago.

Revenue up, margin down

EBITDA rose 29.2% year-over-year to SAR 2,164.0 million, with an EBITDA margin of 47.6% against 54.9% in the same period last year. The company attributes the margin move to consolidating the lower-margin operations of Shelf Drilling, an acquisition completed in late November 2025. Net profit in the earnings release is given as SAR 374.1 million, down 3.7%, with a net profit margin of 8.2% compared with 12.7%. Cash flow from operating activities before working capital was SAR 1,999.6 million against SAR 1,650.9 million.

The second quarter carried the weight of the disruption. Revenues rose 36.4% year-over-year to SAR 2,153.3 million and EBITDA rose 18.2% to SAR 1,014.3 million, for a margin of 47.1% against 54.4%. Net profit for the quarter was SAR 133.3 million against SAR 191.7 million, down 30.5%, with a margin of 6.2%.

Geography explains the shape of the half. Saudi Arabia, still the largest single market, produced revenues of SAR 1,605.2 million against SAR 1,817.0 million, a decline of 11.7%, which the company puts down to redeployment of a higher day-rate rig to a planned project and lower onshore activity. Qatar fell 27.4% to SAR 126.8 million. Everything else rose. West and Central Africa went from SAR 6.6 million to SAR 612.1 million, Southeast Asia rose 61.3% to SAR 450.3 million, Egypt rose 58.5% to SAR 466.2 million, Kuwait rose 53.6% to SAR 395.9 million and India rose 153.1% to SAR 302.6 million. Norway contributed SAR 201.2 million against nothing a year earlier.

Fleet, backlog and the Saipem deal

The operating fleet reached 101 rigs against 73 rigs in the first half of 2025. Utilization was 97.6% against 98.6%. Total backlog stood at SAR 34.67 billion as of 30 June 2026, against SAR 34.71 billion at the end of 2025, with a weighted average remaining contract tenor of 4.54 years, split 85% offshore and 15% onshore and 68% firm against 32% option. The Total Recordable Injury Rate was 0.08, against the IADC standard of 0.35.

Contract awards during the half included three premium jack-up rigs with WAEP in Nigeria worth approximately SAR 2.73 billion, a multi-year contract for Shelf Drilling Enterprise in Thailand at approximately SAR 345 million for the firm term, a Nigerian award for Shelf Drilling Victory at approximately SAR 347.6 million, a one-year firm term for Main Pass IV adding approximately SAR 180.7 million, and an extension for Shelf Drilling Winner in the Dutch North Sea with a total potential value of approximately SAR 832.2 million.

In June 2026 the company signed a definitive agreement to buy Saipem’s shallow-water drilling activities in Saudi Arabia for approximately USD 285 million, subject to customary adjustments at closing. The portfolio is five operational premium jackups, three owned and two leased, with associated backlog of approximately SAR 3.8 billion as of signing. Four of the rigs operate in Saudi Arabia and one in Mexico. Completion was expected in the third quarter of 2026, and on completion the offshore fleet would rise to 88 units including 51 premium units. Management reiterated full-year 2026 EBITDA guidance of SAR 4.50 billion to SAR 4.87 billion.

The reporting framework

The timetable is set by Article 66 of the Rules on the Offer of Securities and Continuing Obligations, which requires interim financial statements to be prepared under the standards adopted by SOCPA and disclosed to the public within a period not exceeding 30 days after the end of the financial period they cover. ADES published for a period ended 30 June 2026 on 10 August 2026. The same rules require board approval and signature by an authorised director, the chief executive and the chief financial officer before disclosure, and disclosure through the electronic system the exchange designates for the purpose.

The Board of Directors Report for the year ended 31 December 2025, prepared under the Corporate Governance Regulations issued by the Capital Market Authority, identifies the company as a listed joint stock company under Tadawul code 2382. Its full-year 2025 figures give the base against which this half is read: revenues of SAR 6,689.0 million, EBITDA of SAR 3,552.9 million at a 53.1% margin, and net profit of SAR 832.9 million.