ADES Holding’s recommendation unchanged with revised TP – Aljazira Capital

ADES
2382 -1.68% 19.35 -0.33

Riyadh – Mubasher: The ‘Overweight’ recommendation on ADES Holding Company has recently been maintained by Aljazira Capital with a revised TP of SAR 22.7 per share.

The adjusted TP was increased from SAR 18.9 per share, according to Aljazira Capital.

ADES Holding is currently navigating from near-term geopolitical headwinds to sustained long-term growth and margin expansion through 2030.

The report noted that performance during the second quarter (Q2) of 2026 is likely to be constrained by temporary offshore rig suspensions and elevated regional insurance costs (>SAR 40 million in Q1-26), a recovery in the second half (H2) of 2026 driven by contract activations across North Africa, Southeast Asia, and the North Sea is expected to lift the active rig count to 107 by the end of 2026.

Consequently, revenue for full year 2026 is expected to rise 43.5% to SAR 9.6 billion on the back of the Shelf Drilling integration.

Meanwhile, near-term disruptions will contract gross and EBITDA margins to 36.5% and 48.1%, respectively.

The report added that following 2026 normalization, ADES Holding’s shallow-water market leadership and expanded 20-country footprint will support a gradual fleet expansion to 115 active rigs by 2030. This would result in 10.3% revenue CAGR (2025-2030) to SAR 10.9 billion.

Aljazira Capital highlighted that profitability metrics are projected to recover from 2027 through $50 million to $60 million in Shelf synergies, reaching gross and EBITDA margins of 38.6% and 49.2%, respectively, by 2030.

Furthermore, a reduction in finance charges from SAR 1.24 billion in 2026 to SAR 899 million in 2030 will expand the net margin from a 10% low to 17%, which will drive net income to SAR 1.86 million by 2030 at a 17.9% CAGR from 2025.

Aljazira Capital concluded: “While the Shelf transaction increased total debt to SAR 20.5 billion as of Q1-26, the balance sheet remains protected by a robust SAR 34.5 billion backlog and disciplined capex averaging ~11% of revenue, which will ease the leverage ratio (debt-to-equity) from a 3.0x peak in 2025 to 1.5x by 2030.”

It is worth noting that in Q1-26, ADES Holding generated SAR 236.44 million in net profit attributable to the shareholders amid robust quarterly results. 

Source: Mubasher Source: {{details.article.source}}