Al -Jazeera Capital has kept its recommendation to the stock of Addis Holding Company (Addis) with “increasing the centers” and means continuing to buy, and set the target share price at 20.9 riyals.
Al -Jazeera Capital pointed out that Addis is in a good position to continue to expand with the support of its good center in the market and the success of restarting all the six excavated drilling platforms from work and the record of flexible performance.
It focused on the company’s readiness to deal with difficulties in the leading place in the market, the success of restarting the arrested platforms and expansion plans for the coming period; Despite the decline in the near -range expectations of the oil and gas sector and the excavation sector was affected by the suspension of pits platforms by Aramco.
Al -Jazeera Capital expects the structural restrictions in the drilling platform market as a result of reducing the supply for decades and limited new drilling platforms at high occupancy rates by 90%, which will benefit the Addis fleet consisting of 33 distinctive drilling platforms.
I also expected revenues at an annual compound rate of 6.1% during a period of 5 years until the end of 2029 with the support of the conclusion of a number of coming contracts in Kuwait, Algeria, Nigeria and Thailand, in addition to the continued expansion of the fleet, which is expected to reach 58 naval drilling platforms and 38 wild drilling platforms by 2029.
Al -Jazeera Capital suggests a gradual increased margin of Edis from 38.1% in the past year 2024 to 39.1% in 2029, and that the EBITDA margin will rise and revenue means before deducting interest, taxes, consumption and firefighting, during the same period from 49% to 53.5% during the period of 5 years until the end of 2029.
Al -Jazeera Capital also expected a net profit margin from 12.9% to 18.7% to achieve a net profit growth at an annual compound rate of 14.3% from 802 million Saudi riyals in 2024 to 1,563 million Saudi riyals by 2029.
Al -Jazeera Capital believes that the capital spending program, which is valued at 5.5 billion Saudi riyals, will temporarily increase the debt to 2.1 times in 2026, but it will ensure cash flows and contracted projects worth 28.3 billion Saudi riyals with financial flexibility with the expectation of debt to decline to 1.6 times by 2029.
With Addis margins outperformed his counterparts globally, their operational flexibility, and their geographical presence in various areas and strong growth, this justifies that the company is trading with an evaluation and the company’s repetition allowance to EBITDA expected for 2025 at 10-11 times, and is estimated in similar companies at an average of 8.5 times, indicating a significant increase from the current levels.
