Financial Performance - Total revenue for the year ended December 31, 2024, was 1,145,915 thousand in 2023[159]. - Revenue for the year ended December 31, 2024, was 1,145.9 million in 2023[205]. - Net income for 2024 was 12.6 million in 2023, showcasing strong financial performance[214]. - Total revenue for the year ended December 31, 2023, was 909.5 million in 2022[218]. - Net income for 2023 was 36.4 million in 2022[218]. Revenue Sources and Customer Concentration - In 2024, revenues from four major customers accounted for 54%, 9%, 7%, and 4% of the company's consolidated revenues, indicating a high customer concentration risk[43]. - Four customers accounted for 54%, 9%, 7%, and 4% of consolidated revenues in 2024, showing a concentration of revenue sources[164]. Operational Risks - The company is experiencing a material weakness in internal control over financial reporting, which could adversely affect its ability to report financial results accurately[30]. - The geographic concentration of operations in the Middle East and North Africa exposes the company to regional economic and political risks, impacting financial stability[41]. - The company faces risks related to fluctuating exchange rates and currency control restrictions due to its operations in multiple countries[30]. - The company is subject to various legal and regulatory risks, including potential litigation and compliance with complex laws in different jurisdictions[31]. - The company is subject to risks from civil unrest, acts of terrorism, and other geopolitical factors that could adversely affect its operations and financial condition[46]. Capital Expenditures and Financial Needs - Significant capital expenditures are required for maintenance and upgrades of assets, which could strain the company's liquidity if not managed effectively[40]. - The company anticipates increased capital expenditure and financing needs due to upcoming gas field developments in the MENA region[190]. - NESR's total capital expenditures for the last three fiscal years amounted to 105.1 million in 2024, 122.4 million in 2022[143]. Environmental and Regulatory Compliance - Increased attention to ESG matters may adversely impact the oil and natural gas industry, affecting the company's operations and market position[37]. - The company is subject to various environmental regulations that could impose additional compliance costs and affect operations[168]. - Stricter regulations on greenhouse gas emissions could reduce demand for the company's services, impacting future financial performance[87]. Market Conditions and Industry Dynamics - Oil and natural gas prices have shown significant volatility, with Brent spot prices reaching a high of 76.02 per barrel in the same year[35]. - The oilfield services sector is highly cyclical, with operating results fluctuating based on global commodity prices and rig activity[188]. - Seasonal changes and significant weather events impact the demand for oil and oilfield services, with higher activity typically seen in Q4[160]. Strategic Initiatives and Investments - In 2024, NESR launched its NEDA service line, focusing on climate change mitigation and water management, and invested in Salttech BV for Zero Liquid Discharge technology[149][150]. - The company executed a second-phase Carbon Capture & Sequestration project in Indonesia in 2024, positioning NESR as a leader in CCS-related projects in the region[152]. - The company has established the NESR Oilfield Research & Innovation Center in Saudi Arabia to drive energy sector research and innovation[182]. Financial Liabilities and Risks - The company has $386.6 million in borrowings under various loan agreements, exposing it to interest rate risk due to floating interest rates[77]. - The company's subsidiaries may face default risks if they cannot generate sufficient cash flow to meet debt obligations, potentially leading to bankruptcy or liquidation[72]. - Collection of receivables may not meet projected cash requirements, impacting the ability to fulfill debt obligations[74]. Shareholder Considerations - As of December 31, 2024, there were 96,045,856 ordinary shares and 35,540,380 warrants outstanding, indicating potential dilution of ownership with future sales[113]. - The company currently has no plans to pay cash dividends on its ordinary shares, and any future dividend payments will depend on various factors including earnings and financial condition[116]. - There is a risk that the warrants may expire worthless as they are not "in the money" as of December 31, 2024[118]. Human Resources and Management - The loss of key employees could have a material adverse effect on the company's business operations and profitability[125]. - The company is in the process of remediating material weaknesses in internal control over financial reporting, which could divert management's attention and resources[56].
National Energy Services Reunited Corp.(NESR) - 2024 Q4 - Annual Report