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2382

Governance: A

ADES

Ades Holding Co.

19.68 SAR / Share

As of: May 28, 2026

26.0x P/E Ratio Trailing 12 Months

3.2x P/B Ratio Price to Book Value

2.2% Dividend Yield Annual Dividend / Share

21.68B SAR Market Cap Total Valuation

1.21 Beta Systematic Risk Index

12.5% Net Margin Net Profit / Revenue

The Story

ADES is a rapidly expanding oilfield services giant leveraging aggressive acquisitions and strategic partnerships to dominate the global shallow-water drilling market.

Source: Annual 2025 (2026-04-22)

Value Creation +1.7% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

2.2%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+11.0%

Payout Ratio Percent of net profits distributed as dividends

56.9%

Net Margin Net profit margin generated from total operational revenue

12.5%

ROIC Return on Invested Capital

8.4%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

26.0x

P/B Ratio Market capitalization compared to corporate book value

3.2x

EV / EBITDA Operating multiple reflecting core operational leverage

11.1x

EV / SALES Asset pricing multiple relative to total topline revenue

5.9x

Growth Story

The growth trajectory of ADES is defined by rapid fleet expansion, with revenue surging from 4.33 billion SAR in FY 2023 to 6.69 billion SAR TTM. This growth is anchored by a sustainable growth rate of 11.0%, fueled by a massive 5-year average reinvestment rate of 130.49%. The company is currently investing significantly more than its current earnings back into the business, primarily through rig refurbishments and the late 2025 acquisition of Shelf Drilling, which added a significant fleet of jack-up rigs and expanded its geographic footprint into new offshore markets.

Profitability Dynamics

ADES maintains a robust TTM operating margin of 30.59%, yet its actual value creation remains in a delicate balance. The 5-year average Return on Invested Capital (ROIC) of 8.43% only slightly exceeds its Weighted Average Cost of Capital (WACC) of 7.99%, resulting in a narrow value creation gap of 0.43%. While the company generated a NOPAT of 1.63 billion SAR TTM, the heavy capital intensity of the drilling business—evidenced by 1.84 billion SAR in TTM Capex—means that cash flows are heavily directed toward maintaining and upgrading the fleet rather than immediate liquidity.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

1.21

Cost of Equity Minimum required rate of return demanded by shareholders

9.6%

WACC Weighted average cost of total debt and equity funding

6.7%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

94.6%

Risk Factors

The primary risk for ADES is its heavy reliance on debt to fund its global ambitions, with total debt reaching 20.51 billion SAR and a gearing ratio of 73% as of FY 2025. This aggressive leverage is reflected in a relevered beta of 1.95, indicating high sensitivity to market and industry cycles. Beyond financial leverage, the company faces operational risks including temporary rig suspensions in the GCC and the complex task of integrating large-scale international acquisitions while managing diverse tax and regulatory environments across more than 20 countries.

Governance Disclosures

Rating: A

We track 9 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Employee Share-Based Compensation from Treasury Shares

The Board of Directors resolved to grant 3,218 thousand ordinary shares from treasury holdings to certain employees in 2025. This resulted in an equity-settled share-based payment expense of SAR 40,381 thousand. These shares vested immediately upon grant without performance conditions.

Mitigating Factors: The cost is determined by fair value at the date of grant using an appropriate valuation model.

Significance: 5/10 Entrenchment

De Facto Control of United Precision Drilling Company

The Group consolidates United Precision Drilling Company W.L.L (UPDC) as a subsidiary despite owning less than 50% of the voting rights. Control is asserted through substantive rights to direct revenue contracts, capital expenditures, and operational management, as well as the Group's ownership of the drilling rigs used by the entity.

Mitigating Factors: The Group's control is based on its significantly higher exposure to variability of returns compared to its voting rights.

For more, click here to view the full governance profile →

In-Depth Analysis