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Riyad Capital Tweaks Ades Holding Price Target After Q2 Results

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Riyad Capital marginally trimmed its price target on Ades Holding (SASE:2382) to 20 Saudi riyals following the company's second-quarter earnings, according to a Monday note.

For the second quarter, the oil and gas drilling services company logged a 36% annual increase in revenue to 2.15 billion riyals, which was "broadly in line" with Riyad Capital's estimate of 2.3 billion riyals. Net profit declined 32% year over year to 129 million riyals, which missed the research firm's 209 million-riyal forecast.

"The deviation is mostly driven by gross profit, SAR 116 mln below our forecast as margins fell to 34% (vs. our 37%). Net debt is up from 4Q25 and materially higher Y/Y following the borrowings assumed with Shelf Drilling, and now with the pending Saipem acquisition (USD 285 mln), also likely debt-funded (on completion in 3Q26), we expect it to rise further," analysts said. "ADES received resumption notices for all of its temporarily suspended offshore rigs in Saudi Arabia on 11 August (Tadawul), which increases our optimism, though higher finance costs and insurance uncertainty temper this."

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