Arabian Drilling Company returned to achieving profits during the third quarter of 2026, recording a net profit of 31.4 million riyals ($8.4 million), compared to a loss of 9.4 million riyals ($2.5 million) in the same period last year.
The company said in a statement published on the Saudi Stock Exchange “Tadawul” website that the shift to profitability is due to improved efficiency of rig transportation operations and cost-reduction initiatives, in addition to a decrease in net financing costs and income tax expense.
On a quarterly basis, the company turned profitable compared to a loss of 31.5 million riyals ($8.4 million) in the second quarter of this year, benefiting from improved operational performance following the resumption of operation of offshore rigs, as well as efficient transportation operations and cost control initiatives.
On the other hand, revenues declined during the third quarter by 2.9 percent to 810.7 million riyals ($215.6 million), compared to 835.4 million riyals ($222.2 million) in the same period of the previous year, affected by a decrease in excavator activity.
In the first nine months of 2026, revenues decreased by 8.1 percent to 2.4 billion riyals ($638.3 million), compared to 2.6 billion riyals ($691.5 million) in the corresponding period of last year, in light of the temporary suspension of some offshore drilling operations, and the absence of long rig transfers during the period.
The decline in revenues was reflected in the company’s results since the beginning of the year, as net income decreased by 90.6 percent to 6.9 million riyals ($1.8 million), compared to 73.3 million riyals ($19.5 million) during the similar period in 2025, despite the contribution of operating efficiency and reducing costs and general and administrative expenses in reducing the impact of this decline.
The company's shares rose 0.75 percent to 93.15 riyals when the results were announced.
Federal Reserve Chairman Kevin Warsh faces a new test in his quest to achieve a delicate balance between curbing inflation and maintaining the momentum of investment in artificial intelligence, after the midterm elections redrawn the balance of power in Washington, with control of both houses of Congress transferred to the Democrats, who are preparing to expand oversight of the technical sector and data centers, in addition to tightening their accountability to the central bank.
Warsh's bet is based on the fact that artificial intelligence may constitute a broad production transformation that will raise the efficiency of companies and expand the economy's ability to produce goods and services, thus helping to alleviate price pressures over time. However, achieving these gains requires huge investments in data centres, chips, energy and infrastructure, investments that may be affected by rising financing costs, while facing a more stringent political environment towards the expansion of technology companies.
Warsh clearly explained this vision during his participation in an International Monetary Fund forum in Bangkok on October 16. He said that artificial intelligence could provide a major boost to economic productivity in the medium term, describing it as one of the most influential transformations in the American and global economies during his lifetime. He expressed his belief that technology will cause a “positive shock on the supply side” in the medium term, considering that its initial effects are focused on increasing demand, before its long-term benefits are transferred to the supply side.
This distinction means that the artificial intelligence boom may raise spending and investment in its first stage, adding pressure on resources and prices, but it may later lead to increased productivity, reduced production costs, and expanded the absorptive capacity of the economy. This transformation, if achieved and its fruits spread widely, would help the Fed confront inflation without having to rely as much on tightening monetary policy to slow demand.
But Warsh did not present this path as a guaranteed outcome or a transition free of challenges. He warned of a difficult transition marked by uncertainty about jobs, the structure of markets and which companies will ultimately be able to reap the biggest gains. He stressed that monetary policy makers must evaluate the implications of technology on inflation, productivity, and financial stability, at a time when the nature, size, and timing of the transformation are still unresolved.
Interest reaches AI investments
In his subsequent statements during the press conference following the Federal Reserve meeting on October 28, Warsh added another side to his equation, as he refused to believe that the artificial intelligence boom is immune to the impact of rising interest rates, due to the huge returns expected from investing in this technology.
He said that interest rates “creep into various aspects of the economy, and directly or indirectly affect almost everything,” noting that monetary tightening has begun to push investors to more selectivity, with rising borrowing costs for some of the highest-risk companies.
These statements gain importance in light of the expanding base of companies involved in building the infrastructure for artificial intelligence. While big technology companies can finance much of their spending from their cash flows, data center operators, infrastructure companies and service providers rely more on borrowing. Therefore, higher financing costs may slow some expansion episodes, even if giant companies are able to continue spending.
According to an analysis published by the Wall Street Journal, the sensitivity of artificial intelligence investments to interest rates may determine the amount of monetary tightening that the Federal Reserve needs. If the boom is more affected by borrowing costs than thought, the central bank may be able to cool activity with smaller interest increases. However, if investments continue to expand despite rising financing costs, it may have to put pressure on other, more sensitive sectors, such as housing, commercial real estate, small businesses, and consumer spending.
Here the dilemma facing Warsh emerges: he wants to contain inflation, but he does not want monetary tightening to weaken investments that could raise productivity and increase the economy's ability to grow without additional price pressures. The investment boom is not limited to artificial intelligence alone; Warsh pointed out that capital spending in the US economy is expanding to include other sectors, which makes estimating the impact of interest rates on activity more complex.
Congress opens a new front on technology companies
The challenge facing Warsh is not limited to the investment equation and interest rates. The Democrats' victory in the House of Representatives and the Senate in the November 3 elections gives them greater influence in setting the oversight agenda for the US administration and the technical sector, which may add new pressures to the environment in which artificial intelligence investments are growing.
As reported by Reuters, Democrats intend to introduce legislation aimed at protecting consumers from rising electricity costs associated with the expansion of data centers, and imposing independent assessments of the safety of advanced artificial intelligence models, in addition to determining companies’ liability for damages that may result from the use of their technologies. They also intend to take advantage of their control over parliamentary committees to expand oversight of technology companies and review their practices.
These trends may raise the cost of some aspects of expanding artificial intelligence infrastructure, especially if legislation tends to burden companies with a greater share of the burden of providing energy, developing networks, and protecting consumers. However, the passage of broad federal laws will not be guaranteed, in light of President Donald Trump continuing to have veto power, and the need for understandings between the two parties regarding a number of legislation.
This does not mean that Democrats necessarily aim to slow innovation or halt investments, as their positions differ on the limits of regulation and the speed of technology development. But their move to lead key committees will allow them to expand oversight of companies, and ask questions related to the impact of artificial intelligence on jobs, energy costs and competition, files that are directly related to the economic feasibility of expanding data centers.
Greater oversight of the "Fed"
On the monetary policy front, Warsh may find himself facing stricter accountability from Congress, after the committees concerned with the financial sector became under Democratic leadership. Reuters reported that Senator Elizabeth Warren is a candidate to chair the Senate Banking Committee, succeeding Republican Tim Scott, which may open the way for more intense hearings on the central bank’s decisions, transparency and independence.
Congress does not have the power to set interest rates or direct the decisions of the Open Market Committee, as the Federal Reserve has independence in managing monetary policy within the mandate set by legislators, but it remains accountable to them. Therefore, the transfer of control to the Democrats does not mean a direct change in Warsh’s monetary tools, but it may raise the level of scrutiny of his decisions, communications, and management of regulatory files.
Warsh had confirmed at the International Monetary Fund Forum that the Federal Reserve remains committed to restoring price stability, but he refrained from anticipating the decisions of the upcoming meetings, saying that he does not prejudge their results, and that policymakers will evaluate developments in production, employment, and inflation before making their decisions. He also indicated that the central bank is studying the implications of artificial intelligence through external work teams, including a team concerned with productivity and jobs, which is scheduled to hold its first field hearing in the San Francisco Bay Area on November 16.
In conclusion, Warsh's ability to benefit from the artificial intelligence boom does not depend on interest decisions alone, but is also linked to the extent to which technology gains translate into an actual increase in productivity, and the ability of companies to continue investing in light of the costs of financing, energy, and regulatory controls. While the head of the Federal Reserve sees artificial intelligence as an opportunity to expand the economy’s productive capacity and help contain inflation in the future, the new Congress is preparing to hold companies accountable for the costs and risks of this expansion. It is an equation that will test Washington's ability to support innovation and protect consumers, without one path undermining the other.
Major projects in Saudi Arabia provide increasing opportunities for small and medium-sized factories to expand their business and enter local supply chains, with the accompanying demand for industrial products and support services that include transportation, storage, maintenance, and engineering services. This demand can expand the local production base and allow factories to increase their capacities and develop their products, instead of limiting their role to meeting the needs of the current market.
But benefiting from these opportunities is still linked to the factories’ ability to overcome financing and liquidity challenges, qualifying major companies, and meeting requirements for quantities, specifications, and delivery dates. Specialists who spoke to Asharq Al-Awsat believe that the entry of small and medium industrial enterprises into supply chains requires creating opportunities commensurate with their capabilities, developing financing solutions that help them implement contracts, in addition to allowing them to build a record of business that qualifies them to compete for larger orders.
Major projects expand the local demand base
In this context, Dr. Abdullah Al-Saloum, Professor of Finance at Imam Muhammad bin Saud Islamic University, said that small and medium enterprises represent about 90 percent of companies around the world, provide between 60 and 70 percent of jobs, and contribute about 50 percent of the global gross domestic product, which reflects the importance of enhancing their role in industrial activity as one of the main development goals.
He explained that Saudi Arabia is working to expand the contribution of these facilities by developing the regulatory environment and national industrial strategies, improving logistics services, and reducing investment risks, as well as stimulating demand for local products through major projects, value chains, procurement, and local content programs.
Al-Salloum added that the industrial system provides financing solutions and guarantees for the demand for national products, in addition to qualification programs and operational support. In this context, he cited the Public Investment Fund’s industrial business accelerator, which received 350 applications during the past year, he said. He pointed out that these initiatives open the way for the national industry to enhance its presence in the local market, and move from there to regional and international markets.
He pointed out that the participation of small and medium enterprises in the supply chains of major projects is not limited to factories producing goods, but rather extends to supporting activities and services, such as transportation, storage, maintenance, and engineering services, thus expanding the scope of beneficiaries of investment spending. The higher the ability of local industry to meet the needs of these projects, the greater the share of spending that remains within the national economy.
He gave an example of spending by the Public Investment Fund and its subsidiaries on local content, which amounted to 207 billion riyals ($55.2 billion) during the year 2024, according to what the Fund’s Governor, Yasser Al-Rumayyan, announced. He explained that this number is not limited to small and medium enterprises or industrial factories, but rather reflects the volume of demand that local factories can benefit from to expand their business and develop their products.
Al-Salloum explained that repeating orders helps factories raise their production capacity operating rates and distribute fixed costs over a larger number of units, which improves their efficiency and allows them to invest in equipment, technologies, and workforce training. It also gives it a supply record and practical experience that can be relied upon to attract new customers inside and outside Saudi Arabia.
He pointed out that reducing dependence on imports is linked to the ability of the local industry to produce a wider range of goods, components and services that were previously imported, which increases the value added locally, while acknowledging the continued need for some imports in the early stages of developing industries.
Al-Salloum added that the expansion of local production creates jobs in multiple fields, including technicians, engineers, and workers in quality, operation, and maintenance. He pointed out that the sustainability of these jobs is linked to the factories’ ability to diversify their clients and not rely on one project or entity.
Liquidity and continuity of demand are challenges facing factories
For his part, Consultant Engineer Abdulaziz Aba Al-Rous, CEO of A&BC Company for Manufacturing Safety Tools and Materials, said that the Saudi industrial sector received government support and incentives that contributed to enhancing confidence in investment and expansion, but factories still face daily challenges related to liquidity and continuity of demand.
He explained that implementing a large order requires the factory to purchase raw materials and pay wages and production costs before collecting its dues, which puts it in front of a financing gap between starting implementation and receiving the value of the supply. Increasing production capacity also requires investing in equipment and attracting qualified technical workers, in addition to assuming ongoing operational obligations.
The advisor pointed out that the clarity of future demand, the availability of long-term contracts, and the regularity of payment of dues are factors that help establishments plan and expand, and benefit from the available support and incentives, instead of working according to intermittent requests that make it difficult to determine production and investment needs.
Abba Al-Rous pointed out that opportunities for small and medium factories to enter the supply chains of major projects exist, but they vary according to the nature of the product, the size of the request, and the factory’s ability to adhere to specifications, quantities, and delivery dates.
He added that the “Etimad” platform allows establishments to view government competitions, and preferring the national product, in accordance with the applicable controls, contributes to enhancing the competitiveness of local factories. But the challenge with large companies often starts from the stage of registration and qualification as an approved supplier, before reaching an actual supply opportunity.
Aba Al-Rous explained that the factory may have a good product and suitable production capacity, but it faces long qualification procedures, or orders in quantities and payment terms that exceed its financial capacity. Therefore, he sees the importance of granting small and medium enterprises initial orders commensurate with their capabilities, then increasing the volume of business based on the quality of implementation and commitment to delivery, which allows the factory to prove its ability and allows the buyer to evaluate its actual performance.
Qualification and financing requirements determine expansion opportunities
Regarding the obstacles that prevent factories from entering into supply contracts, Al-Salloum said that the challenges of financing, production capacity, qualification requirements, and the possibility of entering into supply contracts are related to each other. A factory may have a good product but lack the experience necessary to qualify as a supplier, or it may obtain a contract but not have sufficient liquidity to implement it.
He pointed to the Public Investment Fund’s announcement in September 2026 of the launch of the “Tawreed” company, to provide financing products for supply chains, including early payment for approved invoices. He explained that these solutions can improve cash flows for factories, but they do not replace the need for financing prior to issuing the invoice, so that the facility can purchase raw materials and begin production.
Al-Salloum stressed that quality, safety and compliance requirements are necessary, but the requirements for experience, financial solvency and guarantees should be proportional to the size of the contract and the nature of its risks, so that qualification requirements do not turn into an obstacle for smaller factories. He also called for providing these facilities with the opportunity to prove their capabilities through smaller orders before moving on to larger contracts.
For his part, Aba Al-Rous explained that small and medium factories are able to provide multiple products for major projects, including metal products, electrical components, packaging materials, and safety supplies, in addition to maintenance and manufacturing services upon request.
