Tribune News Network
Doha
Gulf International Services (GIS) reported a robust financial performance for the first half of 2024, with a net profit of QR356 million, reflecting a 27 percent year-on-year increase. The company, which operates in drilling, insurance, aviation, and catering segments, attributed its success to improved operational efficiency, strategic initiatives, and favorable market conditions.
For the six-month period ending 30 June 2024, GIS achieved a revenue of QR 2.1 billion, a 9 percent increase compared to the same period in 2023. The Group’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to QR613 million, up from QR581 million in the first half of 2023. Earnings per share also saw a notable rise to QR0.192, compared to QR0.151 in the previous year.
The Group’s financial performance in the second quarter of 2024 was particularly strong, with net earnings growing by 21 percent compared to the first quarter. This improvement was primarily driven by enhanced profitability in the drilling and insurance segments, supported by a constructive business environment.
The drilling segment, managed by Gulf Drilling International (GDI), was a major contributor to GIS’s overall success. The segment reported revenue of QR725 million for the first half of 2024, marking a 9 percent increase from the previous year. The segment’s net profit reached QR90 million, a significant turnaround from the net loss of QR22 million reported in the first half of 2023.
Key drivers of this performance included improved day rates for offshore rigs, lift boats, and barge operations, as well as higher asset utilization. GDI also benefitted from a strategic debt restructuring that reduced finance costs by 43 percent, coupled with a one-off income of QR14 million from the Seadrill transaction.
GDI’s strategic initiatives included the acquisition of three jack-up rigs, which strengthened its position as Qatar’s largest drilling service provider. Additionally, GDI secured a four-year contract extension for several onshore rigs and won a new three-year contract for one of its lift boats, which is expected to positively impact future revenues.
The segment’s quarterly performance was also impressive, with a net profit of QR72 million in Q2-24, up from QR 18 million in Q1-24. This improvement was largely due to higher utilisation of lift boats and the consolidated reporting of Gulfdrill following its acquisition.
The aviation segment, represented by Gulf Helicopters Company (GHC), also delivered strong results. The segment’s revenue for the first half of 2024 reached QR 571 million, reflecting a 15 percent increase compared to the same period in 2023. This growth was driven by increased demand for helicopters supporting offshore oil and gas services, both in Qatar and internationally.
The total flying hours for the segment grew by 6 percent year-on-year, with domestic flying hours increasing by 5 percent and international operations, particularly in Turkey, experiencing a 7 percent rise. GHC’s domestic operations also benefited from the mobilization of aircraft from international operations to the domestic fleet, contributing to fixed revenue components.
Despite these gains, the aviation segment’s net profit declined by 18 percent to QR188 million compared to the first half of 2023. This decrease was primarily due to the inflationary impact related to IAS 29 adjustments and higher operational costs associated with scheduled aircraft maintenance. The segment also faced challenges from hyperinflation in Turkey, which led to net monetary losses and revaluation losses on foreign currency exchange.
In line with its fleet upgrade strategy, GHC signed an aircraft acquisition contract to add five new helicopters, with an option for an additional five. The first four helicopters are expected to be delivered in the second half of 2024, further enhancing GHC’s operational capabilities.
GIS’s insurance arm, Al-Koot Insurance and Reinsurance, demonstrated strong performance in the first half of 2024, with revenue reaching QR607 million, an 11 percent increase compared to the same period last year. The growth was largely driven by the renewal of major contracts within the energy and medical lines of business, as well as the addition of new clients in the general line of business.
Al Koot’s net earnings for the first half of 2024 saw a significant increase, reaching QR 77 million, up from the previous year. This growth in profitability was supported by improved revenue, the recovery of the segment’s investment portfolio, and higher finance income from fixed deposits. The investment income for the first half of 2024 increased by 36 percent compared to the same period in 2023, largely due to unrealized gains on revaluation of held-for-trading investment securities.
Quarter-on-quarter, the insurance segment’s performance was mixed. While revenue in Q2-24 decreased by 8 percent due to the expiration of certain insurance policies, the segment’s profitability improved by 47 percent compared to the previous quarter. This improvement was driven by lower net claims and reduced reinsurance costs.
Al-Koot continues to maintain its leadership in Qatar’s medical insurance sector and its dominant position in the local energy insurance market. The company’s strong financial strength and issuer credit rating of ‘A-’ with a stable outlook further underscore its resilience and marketstanding.
The catering segment, managed by Amwaj, reported a revenue of QR203 million for the first half of 2024, a slight decrease from the QR216 million reported in the previous year. Despite the revenue decline, the segment’s net profit increased significantly to QR11 million, driven by the recent merger with Shaqab and Atyab.
The segment faced challenges in the second quarter of 2024, with revenue decreasing by 10 percent compared to the first quarter. This decline was mainly due to the completion of contracts related to the Asian Cup and shutdown services. However, the merger’s positive impact on profitability suggests that the segment is well-positioned for future growth.
As of 30 June 2024, GIS’s total assets increased by 13 percent, reaching QR11.6 billion. This growth was primarily driven by the acquisition of rigs previously leased by Gulfdrill. However, the Group’s cash and short-term investments decreased by 14 percent to QR 1.1 billion, mainly due to dividend payments for the financial year 2023.
The Group’s total debt stood at QR5.5 billion as of 30 June 2024, reflecting a 24 percent increase compared to the previous period. This increase was mainly due to an additional loan obtained to finance the purchase of the three offshore rigs from Seadrill.
Looking ahead, GIS remains focused on sustaining its growth momentum through strategic initiatives across all segments. The Group plans to continue pursuing opportunities to expand its market share, enhance operational efficiency, and drive long-term profitability.
