Gulf International Services (GIS) – one of the largest diversified service groups in Qatar with interests in drilling, insurance, helicopter transportation and catering services – has reported a 41% year-on-year surge in net profit to QR49mn in the first nine months ended September 30, 2020.
The group’s revenue saw a moderate 1% jump to QR2.3bn, driven by growth across the business, excepting drilling segment. The earnings-per-share (EPS) was QR0.026 at the end of September 2020 compared to QR0.019 for the same period last year.
The net profit growth was primarily on the aviation and insurance segments. The aviation showed strong operational and financial performance due to the market expansion strategy and the insurance segment continued to build on premiums owing to successful contract renewal and favourable pricing terms.
“Despite macroeconomic headwinds, GIS continued to reposition its segments led by the Group’s commitment to expand market share and focus on rationalising its operating costs, while ensuring effective utilisation of assets, in order to build solid growth prospects," said the GIS board.
The drilling segment netted losses of QR120mn, mainly on a 19% decline in revenue to QR723mn.
The topline was mainly impacted by premature rig suspension within the on-shore fleet, amid Covid-19 pandemic; however, the suspension is only for a temporary period and these rigs are expected to commence operations soon.
Moreover, the rig day-rates, with effect from July 2020, had been re-priced with lesser rates, amid sluggish demand outlook. The on-shore and offshore revenues fell 54% and 12% respectively.
The revenue reduction was partially offset by additional revenue streams from its joint venture, as two of the planned rigs have already commenced operations during the year.
Nevertheless, GDI has been successful in achieving the cost efficiencies on account of lowered operating costs, through numerous cost optimisation plans in the past two years.
The aviation segment reported revenue of QR490mn, up 13%, translating into net earnings of QR422mn against QR101mn the year-ago period.
The significant growth in profitability was supported by a one-off non-cash capital gain of QR268mn on transfer of land and building by Gulf Helicopters Company to GIS, as a part of distribution of dividends in kind.
Revenue within the insurance segment increased significantly by 23% to QR736mn, on the back of successful renewal of policies, along with improved pricing terms on all major accounts within the medical segment, which provided an assurance of continued revenue streams over the year. Moreover, the segment was further able to add new clients within its medical line of business.
The segment’s net profit was up QR29mn on significant improvement in premiums in addition to 19% lower net claims.
The group’s catering segment reported a 15% jump in revenue to QR317mn, amid successful expansion of core industrial catering and manpower contracting services and higher occupancy levels at Mesaieed and Dukhan camps.
GIS’ total assets stood at QR10.5bn. On the liquidity front, the closing cash, including short-term investments, stood at QR795mn. The total debt at group level stood at QR4.6bn at the end of September 30, 2020.