Arabian Drilling Company SJSC

Arabian Drilling Company SJSC maintains a capital structure characterized by significant leverage, with long-term debt of 3,037.7 million SAR against total equity of 5,745.9 million SAR, resulting in a debt-to-equity ratio of 0.53. The company holds 162.5 million SAR in cash and equivalents, which is insufficient to cover its total debt, leading to a negative net cash position. Liquidity is assessed as medium, supported by a current ratio of 1.41, indicating adequate short-term assets to meet immediate liabilities. Operating cash flow stands at 1,099.3 million SAR, providing a buffer against debt obligations, while free cash flow is positive at 130.9 million SAR after accounting for capital expenditures of 745.9 million SAR.

Profitability metrics indicate current operational challenges, with a net income loss of 75.3 million SAR, resulting in a negative return on equity of -2.5% and a negative return on assets of -1.42%. The gross profit of 374.1 million SAR on revenue of 3,433.3 million SAR suggests a gross margin of approximately 10.9%, while operating income is 168.3 million SAR. Without cohort median data for direct comparison, these returns reflect the cyclical pressures often seen in the oilfield services sector, where high fixed costs and capital intensity can erode margins during periods of lower activity or pricing pressure.

Revenue concentration and geographic exposure details are not provided in the available data, preventing a specific analysis of segment or regional risk. The company’s total revenue of 3,433.3 million SAR is derived from its core exploration and production activities, but the lack of segment breakdown limits the ability to assess diversification benefits or specific market dependencies.

Growth trajectory analysis is constrained by the absence of historical period data in the input. The current financial snapshot shows a revenue base of 3,433.3 million SAR, but without year-over-year or quarterly trend data, it is not possible to determine the direction or velocity of revenue growth or decline. The capital expenditure of 745.9 million SAR suggests ongoing investment in assets, which may support future capacity, but the immediate impact on growth remains unquantifiable from the provided data.

Risk assessment highlights medium liquidity risk and low dilution risk. The key flag notes that net cash is negative after subtracting total debt, which increases financial leverage risk. The absence of significant dilution risk is supported by the equal basic and diluted share counts of 89.0 million shares, indicating no immediate options or convertible securities impacting the share base. The negative net income and reliance on operating cash flow to service debt are primary financial risks.

Recent events and market sentiment are reflected in analyst estimates, with a mean price target of 96.04 SAR and a median of 94.90 SAR. The mean recommendation of 2.38 suggests a moderate buy stance, with 3 strong buys, 4 buys, and 4 holds. The price target range spans from 68.00 SAR to 121.00 SAR, indicating varying expectations among analysts regarding the company’s future performance and valuation.

Analysts project 10.3% upside to a mean price target of 96.04 SAR, reflecting positive market sentiment.

Free cash flow surged 354.1% year-over-year to 130.9 million SAR, indicating improved cash generation capabilities.

Net income increased 463.6% year-over-year, turning a recent loss into a profit of 273.6 million SAR.

Operating income grew 115.9% year-over-year to 363.4 million SAR, demonstrating significant operational efficiency improvements.

The company maintains a debt-to-equity ratio of 0.53, which is below the cohort median of 0.33.

The company faces high credit risk, signaling potential difficulties in meeting financial obligations or servicing debt.

Net margin of -4.3% places the company in the bottom quartile compared to 121 peer firms.

Revenue SAR 821.6M, −9,8% YoY; Operating income −56,2% YoY.

• ▍Revenue SAR 821.6M, −9,8% YoY
• ▍Operating income −56,2% YoY
• ▍Net income −90,6% YoY
• ▍Free cash flow +108,2% YoY
• ▍Net margin 0.9%

Revenue SAR 824.3M, −3,0% YoY; Operating income −168,5% YoY.

• ▍Revenue SAR 824.3M, −3,0% YoY
• ▍Operating income −168,5% YoY
• ▍Net income −311,8% YoY
• ▍Free cash flow +52,5% YoY
• ▍Net margin -18.0%

Revenue SAR 835.4M, −3,2% YoY; Operating income −61,4% YoY.

• ▍Revenue SAR 835.4M, −3,2% YoY
• ▍Operating income −61,4% YoY
• ▍Net income −111,1% YoY
• ▍Free cash flow +135,5% YoY
• ▍Net margin -1.1%

Revenue SAR 862.5M, −8,2% YoY; Operating income −10,4% YoY.

• ▍Revenue SAR 862.5M, −8,2% YoY
• ▍Operating income −10,4% YoY
• ▍Net income −62,9% YoY
• ▍Free cash flow +112,1% YoY
• ▍Net margin 0.9%

Revenue SAR 911.1M; Operating income SAR 136.8M.

• ▍Revenue SAR 911.1M
• ▍Operating income SAR 136.8M
• ▍Net margin 8.3%

Revenue SAR 849.7M; Operating income SAR 132.7M.

• ▍Revenue SAR 849.7M
• ▍Operating income SAR 132.7M
• ▍Net margin 8.3%

Revenue SAR 863.2M; Operating income SAR 143.5M.

• ▍Revenue SAR 863.2M
• ▍Operating income SAR 143.5M
• ▍Net margin 9.8%

Revenue SAR 939.3M; Operating income SAR 74.9M.

• ▍Revenue SAR 939.3M
• ▍Operating income SAR 74.9M
• ▍Net margin 2.1%

Revenue SAR 3.43B, −5,1% YoY; Operating income −70,2% YoY.

• ▍Revenue SAR 3.43B, −5,1% YoY
• ▍Operating income −70,2% YoY
• ▍Net income −123,4% YoY
• ▍Free cash flow +111,9% YoY
• ▍Net margin -2.2%

Revenue SAR 3.62B, +4,1% YoY; Operating income −29,4% YoY.

• ▍Revenue SAR 3.62B, +4,1% YoY
• ▍Operating income −29,4% YoY
• ▍Net income −46,9% YoY
• ▍Free cash flow −40,0% YoY
• ▍Net margin 8.9%

Revenue SAR 3.48B, +28,6% YoY; Operating income +29,4% YoY.

• ▍Revenue SAR 3.48B, +28,6% YoY
• ▍Operating income +29,4% YoY
• ▍Net income +8,4% YoY
• ▍Free cash flow −14,7% YoY
• ▍Net margin 17.4%

Revenue SAR 2.70B, +22,9% YoY; Operating income +70,4% YoY.

• ▍Revenue SAR 2.70B, +22,9% YoY
• ▍Operating income +70,4% YoY
• ▍Net income +103,9% YoY
• ▍Free cash flow −215,0% YoY
• ▍Net margin 20.6%