Tribune News Network
Doha
Gulf International Services (GIS) on Wednesday reported a net profit of QR573 million for the nine-month period ended September 30, 2024, marking a 38% increase compared to the same period last year, with an earnings per share of QR 0.308.
GIS reported an increase in revenue for the nine-month period ended 30 September 2024. This growth was primarily driven by the aviation, drilling and insurance segments. The key contributing factors to this increase included improved day rates and higher asset utilization in the drilling segment, increased flying hours in the aviation segment and enhanced premiums in the insurance segment, supported by major contract renewals.
The Group achieved strong financial performance for the nine-month period ended 30 September 2024, with uptick in both EBITDA and net profit results compared to the same period of last year. This success was driven by revenue growth and a reduction in finance costs, primarily due to debt restructure in the drilling segment. Even with additional debt from acquiring new Jackup Rigs, the Group effectively managed to lower its finance costs, highlighting its strategic financial management.
On overall basis, the Group’s 9M-24 financial performance is robust, with strong revenue and net profits growth as well as healthy margins
Revenue for Q3-24 increased compared to the previous quarter, primarily due to of better revenue reported from the drilling and insurance segments. Drilling segment benefited mainly from the full consolidation reporting of Gulfdrill and Gulf Jackup following the transaction with Seadrill in addition to higher earned insurance premiums in Q3 compared to Q2 from the insurance segment.
Net profit for Q3-24 increased compared to the previous quarter. This growth was mainly driven by enhanced bottom-line profitability in the drilling segment due to higher revenues. However, this was partially offset by reduced profitability in the aviation segment, resulting from decreased revenue, and lower profitability in the insurance segment due to increased net claims and re-insurance costs.
The Group maintained robust total assets and cash reserves, despite a decrease in total cash due to the 2023 dividend payment and partial cash injection for the Seadrill transaction. The Group’s total debt increased as most of the Seadrill transaction was financed through additional loans.
The drilling segment reported a significant revenue growth for the nine-months ending 30 September 2024. This increase was mainly due to improved performance in the offshore rigs , lift boat and barge operation, supported by better day rates and higher asset utilization. Additionally, the recent acquisition of three Jack up rigs positively impacted revenue growth, as it allowed for the full consolidation of Gulfdrill and Gulf Jack up revenues.
The segment achieved a remarkable turnaround, reporting a strong net profit for the nine-month period ending 30 September 2024, compared to a net loss for the same period last year. This substantial improvement in bottom-line profitability is primarily driven by the growth in the segments topline, reduced finance costs, and one-off income from the transaction with Seadrill.
Quarter-on-quarter, the segment reported a growth in net profit compared to the previous quarter. The improvement is primarily due to an increase in revenue, which resulted from a full quarter of consolidated reporting for Gulfdrill and Gulf Jack up following their acquisition.This contrasts with the previous quarter, where only few days were consolidated.
The Aviation segment reported an increase in revenue for the nine-month period ended 30 September 2024, in comparison to the same period last year. This growth was primarily due to increased flying hours in both domestic and international segments. The domestic segment also benefited from the redeployment of aircraft from international segment, which boosted fixed revenues. Meanwhile, international operations, particularly those driven by the Turkish subsidiary, witnessed growth due to increased flying hours and an expanded fleet size.
The segment’s net profit declined compared to the previous period, primarily due to higher operational costs largely associated with the scheduled maintenance of certain aircrafts. Additionally, there was a lower inflationary effect gain recorded as part of IAS 29 adjustment compared to the previous year. Further contributing to the reduction in net profits were lower finance income due to decreased deposit rate and higher losses from foreign current revaluation. However, this decline in net profits was partially offset by an increase in the share of profits from the operations in Morocco.
The segment revenue for Q3-24 versus Q2-24 decreased mainly due to lower revenue reported from the MRO segment which was partially offset by improved revenue from international operations due to higher flying hours. Q3-24 profitability decline versus Q2-24 was offset by higher net monetary gain recorded in the current quarter as compared to the previous quarter which arises from the accounting impact of hyperinflation in Turkey.
The insurance segment reported an increase in revenue for the nine-month period ended 30 September 2024 compared to the same period last year. This upsurge in revenue was primarily attributed to the acquisition of new contracts in the medical line of business and the expansion of premiums in the general line of business.
Furthermore, the net earnings of the segment demonstrated a significant growth in comparison to the corresponding period of the preceding year. This enhancement in bottom-line profitability can be primarily attributed to the augmented revenue stream, complemented by the robust recovery of the segment’s investment portfolio. The increase in the investment income can be predominantly attributed to the recovery of unrealized losses and gains recorded in the revaluation of held-for-trading investment securities, in addition to higher finance income derived from fixed deposits.
On quarter-on-quarter basis, the segment revenue for Q3-24 increased compared to the previous quarter due to higher earned premium in the current quarter. However, segmental profitability for Q3-24 declined mainly due to surge in net claims reported and higher re-insurance costs which was partially offset by higher investment income.
The Catering segment reported a decrease in revenue compared to the previous year. However, the segment experienced a significant increase in net profit. This increase was primarily driven by the impact of the recent merger with Shaqab and Atyab, which enhanced the segment’s profitability despite the decline in revenue.
Quarter-on-quarter, the segment share of revenue for 3Q-24 moderately increased. However, profitability increase was mainly due to non-accounting of income tax during the current quarter.
GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters on November 5, 2024 at 1:30 p.m.