ADES: 2Q26 guided to be weaker; 2026 EBITDA guidance maintained

Research evidence excerpt

ADES: 2Q26 guided to be weaker; 2026 EBITDA guidance maintained

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ADES

2Q26 guided to be weaker; 2026 EBITDA

guidance maintained

Reiterate Rating: UNDERPERFORM | PO: 16.40 SAR | Price: 19.26 SAR

2Q26E likely to be weaker on rig suspensions 12 May 2026

Ongoing regional conflicts and the suspension of a handful of rigs are expected to weigh Equity

more heavily on 2Q2026 performance than in 1Q26, given that the impact in the first

quarter was limited to only several days. Despite the near-term pressures, ADES

Key Changesreiterated its FY 2026 EBITDA guidance range of SAR 4.50- 4.87bn, supported by

continued international growth across Southeast Asia and West & Central Africa, strong (SAR) Previous Current

backlog visibility and ongoing Shelf integration benefits and acquisition synergies. 2026E EPS 0.98 1.01

Nevertheless, with near term headwinds related to ongoing suspension in Saudi, we 2027E EPS 1.21 1.24

reiterate our U/P rating with a PO of SAR16.4 per share. Please see inside for details on 2028E EPS 1.37 1.34

estimate changes. 2026E DPS 0.59 0.61

1Q26 EBITDA in line with consensus; synergy on track Abhishek Kumar >>

Research Analyst

ADES 1Q26 EBITDA came in at SAR1,150mn, in line with consensus expectations. YoY Merrill Lynch (DIFC)

revenue/EBITDA growth was 62.6%/40.8% due to the impact of Shelf acquisition. While +971 4 425 8227 abhishek.kumar29@bofa.com

margins were down 740bps yoy, this was expected due to lower margin profile at Shelf.

Sashank Lanka >>

ADES expects to improve the margins over next several quarters as it realises the Research Analyst

US$50-60mn in planned synergy from the acquisition. Net debt remains high at Merrill Lynch (DIFC) +971 4 425 8231

SAR17.6bn at the end of the quarter resulting in c3.75x annualised net debt/EBITDA.