ADES International Holding Ltd Results For the Six-Month Period Ending 30 June 2017

For the purpose of the Transparency Directive the Home Member state
of the issuer is the United Kingdom.

LONDON & DUBAI, UAE–(BUSINESS WIRE)–ADES International Holding (“ADES” or “the Group”), the London-listed
company providing offshore and onshore oil and gas drilling and
production services in the Middle East and Africa through its
subsidiaries, announced today its results for the six-month period ended
30 June 2017.

1H2017 Headline Figures

Summary Income Statement

Financial Highlights

• Revenue increased 45.6% year-on-year to USD 87.8 million
  in 1H2017, driven by high utilisation of the Group’s employed rigs,
  the ramp up of the Group’s operations in the Kingdom of Saudi Arabia
  (“KSA”), commencement of operations of ADES 3 in Algeria and the
  introduction of Mobile Offshore Production Unit (MOPU) services.
• Gross profit rose 28.5% year-on-year to USD 41.0 million in
  1H2017 (USD 31.9 million in 1H2016), with an associated gross profit
  margin impacted by the introduction of three offshore units in the KSA.
• Adjusted EBITDA increased by 42.7% year-on-year to USD 45.0
  million in 1H2017 (USD 31.6 million in 1H2016) aided by the
  devaluation of the Egyptian pound.
• Net profit decreased by 6.0% year-on-year to USD 17.3 million
  in 1H2017 as the Group incurred a one-time expense in relation to its
  IPO in May 2017 totalling USD 4.6 million.
• Normalised net profit excluding the one-time USD 4.6 million
  IPO expense in 1H2017 was USD 21.9 million in 1H2017, an 18.8%
  year-on-year increase, and generating a net profit margin of 24.9%.
• Cash balances stood at USD 163.5 million at 30 June 2017,
  supported by funds raised at the IPO.
• Net debt stood at USD 65.6 million as at 30 June 2017.

Operational Highlights

• Continued exemplary safety performance, achieving over 22.3
  million man hours with a Recordable Injury Frequency Rate (“RIFR”)
  (per 200,000 working hours) at 0.45, below the IADC worldwide standard
  rate of 0.58.
• Total backlog reached USD 430 million as at 30 June 2017
  compared to USD 501 million as at 31 December 2016, reflecting the
  realisation of USD 88 million in contractual agreements and the
  addition of new contract awards and renewals.
• New contract awards for Admarine 88 with Belayim Petroleum Co.
  (Petrobel), a joint venture between ENI IEOC and Egyptian General
  Petroleum Corporation (EGPC), for a three-month drilling campaign.
  Additionally, Admarine VIII was awarded a farm-in agreement with Fanar
  Petroleum Company. Operations and revenue generation for both
  contracts will commence upon rig deployment.
• Contract renewals for Admarine VI with General Petroleum
  Company (GPC) for a one-year period to March 2018, and for Admarine V
  with Petrobel for one year (including an optional six-month extension).
• Finalised exclusive marketing agreements with leading shipyards enabling
  ADES to market new build offshore jack-up rigs, including high
  specification rigs to deploy these assets on a revenue-sharing basis.
  This innovative approach broadens ADES’ service offerings and allows
  it to penetrate new markets and capture a larger market share, while
  simultaneously maintaining our low-cost model.

Current Trading and Outlook

• Scaling existing operations and penetrating new markets through
  participation in a substantial pipeline of active tenders across the
  Middle East, in existing geographies as well as the UAE and onshore
  Iraq. Management expect a number of these tenders to close during
  2H2017 with revenue contribution to commence in 1H2018.
• 2H2017 expected to witness organic double-digit revenue growth
  while maintaining similar margins to 1H 2017. ADES now expects certain
  contracts won during 1H2017 to commence in early 2018. As a result,
  2H2017 performance is currently expected to be broadly in line with
  1H2017 performance.
• Acquisition opportunities continue to be reviewed in line with
  the Company’s strategy set out at IPO with the ADES well placed due
  to its strong cash position.

Commenting on the half-year performance, Dr. Mohamed Farouk, Chief
Executive Officer of ADES International said:

“The first half of 2017 was a milestone period for ADES. We joined the
ranks of internationally recognised oil and gas services companies
listed on the London Stock Exchange following our successful IPO in May,
and announced multiple contract awards and renewals for our assets. Our
sustained operational performance and exemplary safety performance with
an RIFR5 of 0.45 has allowed us to deliver strong
financial results and stands as a testament to the success of our
business model. Our revenue grew by 46% year-on-year while maintaining
our standard low-cost base, resulting in an EBITDA margin of 51%
highlighting the continued activity in development and production
operations in the geographies in which we operate.

ADES’ ability to deliver strong operational results is underpinned by
its three-pillar strategy, including the build-up of our current backlog
through contract extensions, significant participation in tender
activity to increase our market share in existing and new markets, and
targeting smart acquisition opportunities. Execution of this strategy is
made possible thanks to our lean cost structure, operational excellence,
impeccable safety record and robust balance sheet.

As new contracts won in 1H2017 are expected to commence operations in
2018, we believe 2H2017 will be broadly in line with 1H2017, with the
business continuing to deliver organic double-digit revenue growth while
maintaining similar margins in the current financial year.

Closing our IPO during this critical time in our growth trajectory has
provided the necessary liquidity that will help us take advantage of
acquisition opportunities.

We will continue to capitalise on our recent successes during the first
half of the year by leveraging our established platform, expanding our
presence in existing markets, entering new markets in the GCC through
active participation in tenders and executing profitable acquisitions
aimed at securing long-term growth.

In parallel, ADES aims to continue leveraging its lean cost structure
and low operating expenses to maximise profitability and continue
delivering exceptional shareholder value.”

Conference Call

ADES’ management team will present the 1H2017 Results and will be
available for a Q&A session with analysts and investors today at 14:00
BST.

About ADES International Holding (ADES)

ADES International Holding extends oil and gas drilling and production
services through its subsidiaries and is a leading service provider in
the Middle East and Africa, offering onshore contract drilling as well
as workover and production services in Egypt, Algeria and Saudi Arabia.
The Group is pre-qualified in markets including Egypt, Saudi Arabia,
Algeria, India, Mexico and the Saudi–Kuwaiti Neutral Zone. Its over
1,200 employees serve clients including major national oil companies
(“NOCs”) such as Saudi Aramco and Sonatrach as well as joint ventures of
NOCs with global majors including BP and Eni. While maintaining a
superior health, safety and environmental record, the Group currently
has a fleet of nine jack-up offshore drilling rigs, three onshore
drilling rigs, a jack-up barge, and a mobile offshore production unit
(“MOPU”), which includes a floating storage and offloading unit. The
Group is the largest offshore drilling operator in Egypt by number of
rigs. www.adesgroup.com

The full announcement including legal disclaimers is available at: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ADES/13359127.html

Contacts

ADES International Holding
Mr. Hussein Badawy
Investor
Relations Officer
[email protected]
(+202)
2527 7111
or
Instinctif
David Simonson
Laura
Syrett
George Yeomans
[email protected]
+44
(0)20 7457 2020