ADNOC Drilling: revenue growth slowed to 2.9%, but EBITDA margin held at 44.5%

25 августа ADNOC Drilling раскрыла результаты за второй квартал 2026 года: выручка выросла на 2,9% год к году, до 1 231,9 млн долл., EBITDA – на 3,4%, до 548,8 млн долл., чистая прибыль – на 2,3%, до 358,9 млн долл. EBITDA-маржа составила 44,5% против 44,3% годом ранее. При текущей цене акции выглядят скорее привлекательно: мультипликатор P/E LTM 17,4 и EV/EBITDA LTM 12,8 находятся вблизи исторических уровней, а рост замедляется, но остаётся положительным.

Key takeaways

— Revenue in Q2 2026 grew only 2.9% – the slowest pace in the last four quarters

— EBITDA margin held at 44.5% thanks to cost control

— Net profit rose 2.3%, but operating cash flow fell 38% YoY

— Capex in Q2 2026 dropped to $98.8 million – the lowest in eight quarters

— Net debt rose $0.4 billion in the quarter to $2,113.4 million, but the ratio to LTM EBITDA stays comfortable at 0.95

— Dividend yield is estimated at 4.5% at the current price – above the three-year average

— Valuation: P/E LTM 17.4 and EV/EBITDA LTM 12.8 – near three-year averages

Attractiveness

Key figures, USD bn

Revenue in Q2 2026 grew only 2.9% – the slowest pace in the last four quarters

In Q2 2026, ADNOC Drilling's revenue reached $1,231.9 million, up 2.9% year-on-year. This is a marked slowdown compared to 2025 growth rates: in Q1 2025 revenue grew 32.1%, Q2 – 27.9%, Q3 – 22.8%, Q4 – 7.5%.

The slowdown reflects a high base effect and likely normalization of demand after a period of rapid expansion. Still, revenue remains at historically high levels, above $1.2 billion per quarter.

EBITDA margin held at 44.5% thanks to cost control

EBITDA in Q2 2026 rose 3.4% YoY to $548.8 million, with margin at 44.5% – 0.2 percentage points higher than a year earlier (44.3%). Holding the margin amid slowing revenue points to effective cost control.

Operating profit rose 3.6% to $413.9 million, in line with EBITDA dynamics. Cost growth appears to have been lower than revenue growth, allowing margin to be maintained.

Net profit rose 2.3%, but operating cash flow fell 38% YoY

Net profit in Q2 2026 reached $358.9 million, up 2.3% YoY. However, operating cash flow fell to $403.9 million from $649.6 million in Q2 2025 – a 38% decline.

The gap between profit and cash flow likely stems from working capital changes, particularly higher receivables or inventories. This is an important signal: as revenue slows, earnings quality could deteriorate if cash conversion does not recover.

Capex in Q2 2026 dropped to $98.8 million – the lowest in eight quarters

Capex in Q2 2026 was $98.8 million – the lowest since Q3 2024, when it was $194.2 million. For comparison, in Q2 2025 capex reached $250.7 million.

The capex decline may reflect the completion of major investment programs or project deferrals. Combined with lower operating cash flow, free cash flow (OCF minus capex) came to $305.1 million versus $398.9 million a year earlier – a 24% decline, noticeable but not critical.

Net debt rose $0.4 billion in the quarter to $2,113.4 million, but the ratio to LTM EBITDA stays comfortable at 0.95

At the end of Q2 2026, ADNOC Drilling's net debt stood at $2,113.4 million, up $0.4 billion from the previous reporting date and $0.7 billion over the last 12 months. The increase is linked to the investment program and possibly dividend payments.

The ratio of net debt to LTM EBITDA is 0.95 – a moderate level that does not create servicing problems. Interest expenses likely remain under control, though exact figures are not disclosed.

Dividend yield is estimated at 4.5% at the current price – above the three-year average

ADNOC Drilling pays dividends regularly. Over the last 12 months, the company likely paid around $1.1 billion (based on payout policy and LTM profit of $1,460.6 million). At the current market cap of $25,387.9 million, this implies a dividend yield of approximately 4.5%.

This is above the three-year average yield, estimated at 3.5–4.0%. For comparison, the UAE key rate is around 4.5–5.0%, so the dividend looks competitive. However, the payout depends on profit and company policy; if profit declines or capex increases, the dividend could be cut.

Valuation: P/E LTM 17.4 and EV/EBITDA LTM 12.8 – near three-year averages

ADNOC Drilling's current multiples: P/E LTM 17.4 and EV/EBITDA LTM 12.8. These are near the three-year averages (which we estimate at 16–18 for P/E and 11–13 for EV/EBITDA). Thus, the stock looks neither overvalued nor undervalued relative to its own history.

Given the slowdown in revenue growth to 2.9% and margin holding at high levels, the valuation appears fair. Upside could come from faster growth or improved cash conversion, while downside risk lies in further deceleration or rising debt.

Valuation on the latest reported figures

Bottom line

In Q2 2026, ADNOC Drilling showed resilient margins and moderate profit growth, but revenue growth slowed to a four-quarter low, and operating cash flow fell 38%. Capex declined, supporting free cash flow, but net debt continues to rise. A dividend yield of around 4.5% looks attractive, yet its sustainability depends on maintaining profit and cash flow. At current valuation (P/E 17.4, EV/EBITDA 12.8), the stock is rather attractive: upside is limited, but high margins and dividends provide support.