Abraj posts positive financial performance, gears up for IPO

MUSCAT (WAF)- Abraj Energy Services (Abraj) has reported RO 125 million ($323mn) in revenues, and an 11.4% revenue compound annual growth rate (CAGR), Saif al-Hamhami, the newly-appointed CEO of the company told WAF News.

Three Years of Consistent Growth

About Abraj’s financial performance over the last three years, Al-Hamhami told WAF News that the company had demonstrated robust financial performance and resilience across economic cycles for over a decade. From 2019 to 2021, the company has delivered consecutive growth across all key metrics. Including an 11.4% increase in revenue CAGR, 17.9% gross profit CAGR (excl. depreciation), and 21.5% EBITDA CAGR in the same period. And last year, the company’s revenues stood at RO 125 million.

“The mid-term outlook is equally as robust, with an order backlog of over RO 700 million (USD$1.8 billion), as of July 2022,” al-Hamhami added.

Privatisation and the Planned IPO

The company, a wholly subsidiary of the state-owned OQ, is one of the assets to be privatised as part of the announced plan by Oman Investment Authority (OIA) earlier this year. Yet, Abraj’s privatisation has been part of the plan for at least five years. Even before the merger of Oman Oil Company and ORPIC in 2018, resulting in the consolidated group OQ in early 2019.

The Omani executive kept the details about the anticipated IPO private, saying that

“the possibility of a potential future listing was announced around the time of the MSX Roadshow. We are currently seeking the necessary regulatory approvals to undergo an Initial Public Offering and, as such, have appointed advisors,”

without indicating whether the government will be selling a minority share or a majority share in the energy services company. Al-Hamhami said that further announcements will be made “as and when decisions have been made.”

Research, Technology and Decarbonisation

Al-Hamhami addressed the changes within Abraj over the last five years to make the company more attractive as an investment opportunity.

“Research and development are key drivers of change in the company’s operational effectiveness, rising productivity and sustainability. This includes introducing technically advanced drilling units and investments in cementing services and well integrity technologies. These strategic developments have proven to deliver value for all the company’s stakeholders, with consistent financial results across multiple economic cycles and over a decade of revenue and profit growth,” he highlighted.

The company is also implementing GHG Accounting as part of its decarbonisation efforts.

Expansion Beyond Oman

Asked about Abraj’s expansion plans in Oman and other geographies, the company’s CEO told WAF that the company’s consistent year-over-year growth throughout market cycles – including during the collapse of crude oil prices during the pandemic – demonstrates the intrinsic resilience of its business model in the face of market fluctuations.

“Consequently, Abraj looks ahead confidently to leveraging significant expansion opportunities in Oman and further afield. Future growth will emerge from several strategic priorities, including bringing additional rigs to market, expanding its offerings in well services and adding other major international oil and gas companies to its customer base,” he added.

Beyond Oman, Abraj has ambitions to expand its services offering in the MENA region and is prequalified to provide various services in Kuwait, Saudi Arabia, and Algeria.