Gulf International Services (GIS), with interests in oil and gas drilling, insurance, helicopter transportation and catering services, has posted QR44mn net profit in 2019 against QR98mn net loss the previous year.
Underpinned by 20% revenue growth, its net profitability strengthened amid better operating metrics in drilling, as well as expansion in the insurance and aviation segments, its spokesman said, adding the group’s total revenue reached QR3bn.
“The improved financial and operational results presented today are evident of the group’s ability to effectively build market share through targeted expansion, cost optimisation and efficiency,” said Sheikh Khalid bin Khalifa al-Thani, chairman of GIS.
Qatar’s North Field Expansion (NFE) project, which aims to significantly raise the nation’s total natural gas production capacity to 126mn tonnes by 2027, will provide many opportunities for the group to capture significant market share in oil and gas services, which will drive future gains, GIS said, adding it will deploy the retained funds to capture the present and future opportunities.
Its drilling arm saw revenues at QR1.2bn, up QR22mn. It was able to reduce direct costs by QR35mn and general and administrative expenses by QR23mn. As a result, its net loss shrank 61% to QR102mn in 2019.
“Looking ahead, the drilling segment is uniquely placed to unlock solid growth opportunities, mainly due to the NFE project for which GIS’s joint venture has been awarded a contract to provide six premium jack-up rigs, which will commence operations in various phases in 2020,” it said.
Its insurance revenue surged 92% to QR830mn; even as net profit fell 70% to QR16mn, mainly on higher claims. To minimise the risks associated with medical cover, it entered into a reinsurance model, wherein the claim settlement exposure would be optimised.
“Going forward, the insurance segment would continue its efforts to enhance its market share and to re-price its current contracts in medical business, to better manage the claims and rationalise the claim exposure to enhance the overall segment profitability,” the spokesman said.
The aviation segment’s revenue grew 8% to QR586mn, translating into a 2% jump in net earnings to QR143mn. Growth mainly came from its global division, which secured short-term contracts in Angola, Spain, Oman, Kuwait, Cyprus and South Africa, as well as, its Turkish subsidiary, Red Star Aviation, which added to the revenue growth over 2018.
“Going forward, the segment is well positioned to unlock future growth in terms of increased demand envisaged due to the NFE project which would lead to grow the fleet domestically. The aviation segment will continue to focus on key international markets, which provides opportunities in oil and gas aviation service sector.
Also, the acquisition of a 49% stake in Air Ocean Maroc is set to further spur growth, which is currently looking at opportunities in Morocco, Western Africa and South of Europe.
The group’s catering segment saw revenues rise 7% to QR431mn, while profits fell 50% to QR12mn, due to the absence of favourable one-time items from the previous year.
“Looking ahead, Qatar’s catering services market is expected to grow at a positive rate through to 2024. This will be mainly driven by the NFE project and FIFA 2022 World Cup in Qatar, where a high volume of visitors are expected. This will further increase demand for catering and accommodation services in the hospitality sector, where Amwaj is well positioned to act on these opportunities,” the GIS spokesman said.
