GIS H1 net profit rises 58% to QR463.7mn

Registering growth across all portfolios of its business, particularly drilling operations, Gulf International Services (GIS) posted a record half yearly net profit of QR463.7mn, up 58% on QR170.6mn in H1, 2013.

GIS, the largest service group in Qatar, with interests in a broad cross-section of industries, ranging from insurance, re-insurance, fund management, onshore and offshore drilling, accommodation barge, helicopter transportation, and catering services, closed the first half (H1) of this year with a record revenue of QR1.59bn.

In a statement here yesterday, HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada, also chairman and managing director of Gulf International Services said, “These record results can be mainly attributed to the ambitious growth plans in all segments, but most notably within the drilling segment where significant progress was made towards completing that segment’s medium-term business expansion strategy.”

Al-Sada said, “Gulf International Services continued its excellent progress from the first quarter. I am confident that with the company’s strong fundamentals and exciting and ambitious capital investment plans, the company will continue to grow and meet shareholders’ expectations.”

Gulf International Services chief co-ordinator Ebrahim al-Mannai, “Significant achievements were noted during the second quarter of 2014 in three critical areas — increasing GIS’ ownership interest in Gulf Drilling International, business development initiatives and extensions for expiring onshore drilling contracts. With regard to increasing the group’s equity interest in GDI, GIS completed the buy-out of Japan Drilling Company Limited’s 30% shareholding in Gulf Drilling International for a total consideration of $157.7mn, resulting in GDI becoming a 100% subsidiary of GIS with effect from May 1, 2014. The buy-out contributed an additional profit of QR40mn for two months period that ended in June.

“Secondly, progress was made by the subsidiary with respect to several business development opportunities: of the three assets expected to be placed into operation during the current year, the first, a conventional jack-up rig, ‘Msheireb’, was accepted by Occidental Petroleum and commenced operations in May, 2014. The second, a new accommodation lift-boat, Rumailah, has recently been received and will be utilised by Maersk Oil Qatar following its delivery to them in July, 2014.  The third asset, a high specification jack-up rig, Dukhan, is still under construction in Singapore and is on schedule to be utilised by Qatar Petroleum upon its expected delivery to them in the fourth quarter.”

In addition, during the quarter, orders were also placed for two, new custom-built land drilling rigs, GDI-7 and GDI-8, following the signing of long-term contracts with Qatar Petroleum for the provision of onshore drilling services. These rigs will take up to 12 months to be constructed in the United States, and are scheduled to be placed into service in the third and fourth quarters of 2015, respectively.

And, most recently, GDI announced the purchase of another, high specification, premium offshore rig following the awarding of a new, five-year contract with Qatar Petroleum for the provision of further offshore services. This latest addition is expected to commence operations in the second quarter of 2016.

Al-Mannai said, “With these three new assets, GDI expects to have a total of 21 assets under operation by mid-2016, up from nine at the beginning of 2012. At that point, GDI’s fleet is projected to be comprised of ten offshore rigs, eight onshore rigs, two lift-boats and one accommodation barge.

“In the third area —  extensions for expiring onshore drilling contracts —  negotiations were successfully concluded with new, five-year term, enhanced contracts being signed during the quarter for four of the subsidiary’s five onshore rigs.

 “Gulf Helicopters recently placed firm orders for 15 AW-189 helicopters —  AgustaWestland’s latest generation aircraft. Subject to prevailing market conditions, it is expected that 11 aircraft will be deployed in the next five years to bring the total count to 54, with the first two helicopters expected to be delivered in the third quarter of 2014.”