Arabian Drilling 1H 2025 profits halve amid market headwinds

Arabian Drilling has reported a significant downturn in its first-half results for 2025, with both revenue and profit falling compared to the previous year amid what the company describes as market challenges. The Saudi drilling contractor saw its net income cut in half, despite substantial growth in its onshore operations and the securing of a robust contract backlog.

The company’s total revenue for the first six months of 2025 was SAR1.77 billion ($470 million), a seven per cent decrease from the SAR1.91 billion reported in the first half of 2024. The impact on profitability was more pronounced, with net income falling by 50 per cent to SAR83 million riyals from SAR166 million in the corresponding period last year.

The company has initiated a cost rationalisation plan in response, which includes reducing annual capital expenditure by SAR200 million.

The overall decline masks a sharply contrasting performance between the company’s two main divisions. The land segment’s revenue grew by 23.7 per cent year-on-year, which Chief Executive Officer Ghassan Mirdad said helped to, “more than offset land rig suspensions and terminations.” Conversely, the offshore segment experienced a 43.2 per cent drop in revenue over the same period.

Despite the weaker financial results, the company’s contract backlog grew to SAR11.1 billion. Chief Financial Officer Hubert Lafeuille commented, “Our backlog intake of SAR2.4 billion this quarter was the highest since 2023."

Looking ahead, the company has adopted a cautious stance. It has issued guidance for the third quarter of 2025, projecting a potential revenue decline of up to ten per cent from the second quarter due to ongoing rig suspensions. Lafeuille added, “Moving into the second half of 2025, we expect the financial performance to remain challenging due to the impact of suspensions.”