Gulf International Services (GIS), yesterday reported a net profit of QR41m for the nine-month period ended 30 September 2021, with an earnings per share of QR0.022.
Group’s revenue for the nine-month period ended September 30, 2021 amounted to QR2.2bn, with a marginal reduction of 1% compared to the same period last year. Revenue growth from insurance and aviation segments, was entirely offset by a negative growth in revenue from both drilling and catering segments.
Group reported an EBITDA of QR417m, and recorded a net profit of QR41m for the nine-month period ended 30 September 2021. The decline in Group revenues led to a decline in net earnings. Moreover, direct costs increased by 3% negatively affecting Group’s profitability and was mainly due to increase in activity within drilling and aviation segments coupled with increased claims within insurance segment, partially offset by direct cost reduction noted in catering segment.
Group’s finance cost declined by 27%, to reach QR96m, compared to QR131m for the same period last year, against a backdrop of lower interest rates. Similarly, general and administrative expenses declined by 1% on account of continued optimization programs.
Moreover, the performance of Group’s investment portfolio was positively impacted due to recovery in capital markets, and a recovery amounting to QR38m was noted on account of unrealized gains on revaluation of investment securities, when compared to the same period of last year.
Rig day-rates for the offshore fleet improved during Q3-21, as the new day-rates took effect starting from July’21 and led to improved financial performance for the segment during Q3-21. Within onshore fleet two suspended rigs were deployed and commenced operations during Q3-21, after a year of suspension since COVID-19 outbreak. Moreover, all the five Gulfdrill JV rigs remained fully operational since Q2-21.
Aviation segment continue to witness improved performance with better flying activity within both domestic and international operations on account of ease of restrictions, coupled with successful renewal of some international aviation contracts. Also, additional contributions from MRO business continued to support segment’s financial performance.
Insurance segment managed to build up its strong performance, achieved throughout the period by further expanding both the medical and general lines of businesses, where successful renewal of major contracts and additional coverage for major contracts within the energy line of business were main highlights.
Catering segment continue to remain under pressure with restrictions mandated since the start of pandemic in relation to food delivery, transportation and manpower accommodation. This has affected segment’s performance in terms of lowered revenues, coupled with additional layer of costs incurred in order to comply with the requirements leading to negative margins for the segment since pandemic. However, despite stiff market challenges faced during the period, the segment was able to win new contracts within manpower line of business.
Revenue for Q3-21 represented an increase of 12% compared to Q2-21, mainly on account of growth in revenue from aviation, insurance and drilling segments, partially offset by a decline in revenue from catering.
Net profit for Q3-21 amounted to QR42m with an increase of 783% compared to Q2-21. This was mainly linked to recovery in losses within drilling segment, coupled with continued momentum from aviation segment.
Group’s total assets increased by 2% during the year, to reach QR10.2bn as at 30 September 2021, compared to last year. Cash and short term investments stood at QR763m, up by 10% as compared to 31 December 2020. Total debt at Group level amounted to QR4.4bn as at 30 September 2021. Current levels of debt continue to impact the Group’s net earnings.
Drilling segment reported a revenue of QR 716m for the nine-month period ended 30 September 2021, down by 1% compared to last year. Revenue was mainly impacted by rigs’ suspension within onshore fleet carried forward since last year until 1H-21, where two of the suspended rigs had commenced operations during Q3-21. In addition, rig day-rates remained depressed during first half of the year and impacted revenue growth on a year-on-year basis.
Aviation segment reported a total revenue of QR 528m for the nine-month period ended 30 September 2021, with an increase of 8% compared to the same period of last year.
Revenue within the insurance segment for the nine-month period ended 30 September 2021, increased by 1% as compared to the same period last year, to reach QR745m. Catering segment reported a revenue of QR258m, with a decline of 19% as compared to the same period of last year. GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters on Wednesday, 3rd November 2021 at 1:30pm Doha time
