Gulf International Services (GIS) – the holding entity of Gulf Drilling International (GDI), Gulf Helicopters and Al Koot – has reported a net profit of QR281mn in the first half (H1) of 2023, with earnings per share of QR0.151.
The net earnings witnessed 105% jump on an annualised basis owing to growth in revenues and hyperinflationary accounting in one of the overseas operations.
Group’s revenue was QR1.7bn, an increase of 17% against the same period of 2022, due to the aviation, drilling and insurance segments.
The group’s finance cost rose 93% to QR132mn in H1-2023, against a backdrop of higher interest rates and one-off loan amortisation cost. However, amid concluding the refinancing deal, the second half of the year is expected to witness a decline in finance costs.
Total assets remained flat QR10bn at the end of June 2023. Additionally, cash and short-term investments fell 2% to QR1.12bn. The groups’ total debt stood at QR4.38bn as of June 30, 2023.
The drilling segment’s revenue was QR666mn, up 5% compared to H1-2022, linked to new rig day rates implemented for one of the offshore rigs and higher utilisation within the onshore fleet due to the deployment of GDI-8, which was off-contract during the previous year.
The segment reduced the net loss by QR1mn to QR22mn in H1-2022, on growth in topline and enhanced financial performance from the joint venture with Seadrill.
This was partially offset by increased finance costs resulting from higher interest cost and one-off loan amortisation cost.
The debt restructuring deal with the lenders has been successfully concluded for GDI, pending further legal documentation. With a new long-term tenure of 25 years and a 35% balloon, the restructuring deal will enable GDI to gradually deleverage its financial position over the period.
“We are pleased that GDI has restructured its debt with its lenders, achieving one of its main capital strengthening priorities in a sustainable manner. This restructuring is expected to provide financial flexibility with an improved liquidity position and allow investment opportunities, along with an immediate realised savings on borrowing cost,” a GIS spokesman said.
The aviation segment’s revenue was QR498mn, growing by 13% on a yearly basis, on increased domestic and international flying operations.
The total flying hours saw a yearly growth of 29% with domestic operations increasing by 17% and international operations by 76%.
The segmental net profit rose 35% to QR229mn, due to higher in revenue and finance income as well as lower losses from currency revaluation and positive inflationary impact in relation to IAS 29 adjustment.
The insurance revenue grew 34% to QR548mn, due to new contracts within the medical line of business and the growth in premiums from the general line of business.
The segment net earnings increased significantly to QR63mn, supported by improved revenue coupled with strong recovery of the segment’s investment portfolio, with an increase of QR13mn (+161%) on account of investment income for H1-2023 versus H1-2022.
The catering segment’s revenue was QR216mn, a 13% year-on-year reduction, due to the completion of FIFA World Cup related contracts, non-renewal of certain contracts within the catering segment, and lower occupancy level experienced from the accommodation segment.
However, the segment reported net profit of QR2mn against net loss of QR5mn in H1-2022, on better margins due to lower manpower-related costs compared to last year.