ADNOC Drilling Q3 2025 slides: Revenue soars 23% as dividend policy upgraded

Introduction & Market Context

ADNOC Drilling Company PJSC (ADX:ADNOCDRILL) presented its third quarter 2025 results on October 28, showcasing record revenue growth and an upgraded dividend policy. Despite the strong financial performance, the company’s stock experienced a slight decline of 0.52%, closing at $5.22 on October 27, 2025.

The company reported significant growth across all business segments, with particular strength in its Oilfield Services division, as it continues to expand both domestically and internationally. This performance comes amid ADNOC Drilling’s strategic push to diversify its operations and extend its geographical footprint beyond the UAE.

Quarterly Performance Highlights

ADNOC Drilling achieved record revenue of $1.26 billion in Q3 2025, representing a 23% year-over-year increase from $1.03 billion in Q3 2024. This growth was accompanied by a 10% rise in both EBITDA and net income, reaching $560 million and $368 million respectively.

As shown in the following chart of quarterly financial metrics:

The company’s cash flow generation was particularly impressive, with cash from operations more than doubling to $667 million (+112% YoY). Meanwhile, capital expenditure decreased by 12% to $174 million, and net debt declined to $1.74 billion, improving the Net Debt/LTM EBITDA ratio from 1.2x to 0.8x.

For the first nine months of 2025, ADNOC Drilling reported revenue of $3.63 billion, up 27% year-over-year, with EBITDA of $1.64 billion (+15% YoY) and net profit of $1.06 billion (+17% YoY).

The company’s operational highlights include an expanded fleet of 148 rigs (up 8 rigs YoY), with high rig availability of 97% and a 23% improvement in Integrated Drilling Services (IDS) drilling efficiency.

Segment Performance Analysis

All three of ADNOC Drilling’s business segments contributed to the quarterly growth, with Oilfield Services (OFS) showing the most dramatic improvement. The segmental revenue breakdown reveals:

Onshore revenue increased by 5% year-over-year to $512 million, while Offshore revenue grew by 7% to $365 million. The standout performer was the Oilfield Services segment, which saw revenue surge by 94% to $383 million, driven by increased IDS activity and unconventional drilling operations.

The EBITDA generation across segments followed a similar pattern:

Onshore EBITDA rose by 5% to $254 million, Offshore EBITDA increased by 4% to $239 million, and Oilfield Services EBITDA jumped by 72% to $67 million. The company operated 59 IDS rigs in Q3 2025 and provided discrete services to an additional 53 rigs.

Strategic Initiatives

ADNOC Drilling is pursuing a three-pronged growth strategy focused on Enersol (technology acquisitions), Unconventional Resources, and Regional Expansion, as illustrated in this strategic overview:

The company has acquired four technology companies under its Enersol initiative for approximately $0.8 billion, including stakes in Gordon Technologies (67.2%), NTS Amega Global (51%), EV (100%), and DWS (95%). These acquisitions support ADNOC Drilling’s goal of becoming a diversified, technology-centric oilfield services investment platform, with more transactions expected in 2025 and early 2026.

In Unconventional Resources, the company has drilled 82 wells out of a planned 144 for Phase 1, with 36 wells already fractured. This initiative is supported by a $1.7 billion contract to unlock UAE’s unconventional energy resources, with potential for over 300 wells annually.

The Regional Expansion strategy has begun with ADNOC Drilling acquiring a 70% stake in Schlumberger’s land rig business in Oman and Kuwait, including eight fully operational rigs contracted with national oil companies in both countries. The acquisition is valued at less than 4x EV/EBITDA and is expected to generate a 10% free cash flow yield.

Financial Outlook & Dividend Policy

ADNOC Drilling has upgraded its financial guidance for 2025 and beyond, reflecting confidence in its growth trajectory:

For FY2025, revenue is expected to reach the top end of the $4.75-4.85 billion guidance range, with EBITDA of approximately $2.2 billion. The medium-term outlook targets FY2026 revenue of around $5 billion, with plans to expand the fleet to 151+ rigs by 2028 and operate 70 IDS rigs by the end of 2026.

In a significant development for shareholders, the company has upgraded its dividend policy:

The dividend floor has been raised to $1 billion for 2025, with guaranteed annual growth of at least 5% through 2030. For the third quarter of 2025, a dividend of $250 million (approximately 5.7 fils per share) has been approved, payable in the second half of November to shareholders of record as of November 6, 2025.

ESG Performance

ADNOC Drilling continues to focus on environmental, social, and governance (ESG) initiatives, reporting a Total Recordable Incident Rate (TRIR) of 0.59 versus a target of 0.61, and energy intensity of 2,238 GJ/$mn. The company achieved zero spill incidents in the first nine months of 2025 and maintains a diverse workforce representing 83 nationalities, with an Emiratization rate of 29%.

Conclusion

ADNOC Drilling’s Q3 2025 results demonstrate strong operational and financial performance across all business segments, with particularly impressive growth in Oilfield Services. The company’s strategic initiatives in technology acquisition, unconventional resources, and regional expansion are driving revenue growth and positioning it for sustainable long-term development.

The upgraded dividend policy and positive guidance revision reflect management’s confidence in the company’s future prospects, despite the slight decline in share price following the announcement. With a strengthened balance sheet, improved cash flow generation, and clear strategic direction, ADNOC Drilling appears well-positioned to continue its growth trajectory through 2025 and beyond.

Full presentation:

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