National Energy Services Reunited ((NESR)) has held its Q4 earnings call. Read on for the main highlights of the call.
The latest earnings call for National Energy Services Reunited (NESR) painted a picture of robust performance and strategic growth, despite facing macroeconomic and geopolitical challenges. The company reported record revenue, EBITDA, and cash flow for 2024, alongside significant market expansion and technological advancements. While acknowledging potential seasonal slowdowns and competitive pressures, NESR remains optimistic about its prospects for 2025.
Record-Breaking Revenue and Growth
NESR achieved a record revenue of $343.7 million for the fourth quarter of 2024, marking a 2.2% sequential increase and an 11.8% rise year-over-year. The full-year revenue reached $1.3 billion, reflecting a 13.6% increase from the previous year. This growth was driven by strong activity in the Gulf countries, underscoring NESR’s successful market strategies.
Strong EBITDA and Cash Flow
The company reported a record adjusted EBITDA of $87.2 million for Q4 2024, with margins of 25.4%. For the full year, adjusted EBITDA was $310.1 million, up 18.2% year-over-year. NESR also achieved a free cash flow of $124 million for the year, with a conversion rate of 40.1%, highlighting its financial strength and operational efficiency.
Market Expansion and Operational Milestones
NESR expanded its operations in key Middle Eastern markets, including Saudi Arabia, Oman, Kuwait, UAE, Iraq, Algeria, and Egypt. The company gained market share in Saudi Arabia and introduced new technology platforms in Oman, achieving record revenue and growth in each of these regions.
Technological Advancements
NESR successfully executed its ROYA direction drilling platform and the NEDA decarbonization portfolio, achieving key pilot milestones. These advancements position the company for future growth, with plans for commercialization underway.
Macroeconomic and Geopolitical Uncertainty
Despite ongoing macro volatility and geopolitical uncertainty in the Middle East, NESR has effectively navigated these challenges. The company remains vigilant and prepared to adapt to changing conditions.
Seasonal Slowdown and Competitive Pressures
NESR anticipates a slower first quarter in 2025 due to fewer operating days and the full month of Ramadan. Additionally, increased competition is expected to pressure margins, but the company is confident in its ability to maintain its competitive edge.
Forward-Looking Guidance
Looking ahead, NESR’s Chairman and CEO, Sherif Foda, highlighted the company’s strategic focus on expanding its technology portfolio and exploring capital allocation for growth opportunities in 2025. The emphasis will be on sustaining activity in the MENA region, leveraging the company’s strong financial position and reduced net debt-to-adjusted EBITDA ratio.
In summary, NESR’s earnings call reflects a strong performance in 2024, with record achievements in revenue and EBITDA. The company’s strategic market expansion and technological advancements position it well for future growth, despite potential challenges. Investors and stakeholders can remain optimistic about NESR’s trajectory as it continues to navigate the complexities of the global energy market.