Tribune News Network
Doha
Gulf International Services (GIS) on Sunday announced that the company reported a net profit of QR415 million in the first nine months of 2023 with earnings per share of QR0.223.
The Group’s revenue for the nine-month period ended 30 September 2023 amounted to QR2.6 billion, with an increase of 18 percent compared to the same period of last year.
Revenue growth from the aviation, drilling, and insurance segments led to an overall increase in the Group revenue. Catering revenue of QR312 million is presented separately as part of discontinued operations as per IFRS 5 requirements.
The Group reported an EBITDA of QR803 million for the nine-month period ended 30 September 2023. Growth in the Group’s revenues coupled with an increase in finance income and hyperinflationary accounting in one of the overseas operations led to an overall increase in net earnings.
On the other hand, the Group’s direct costs increased by 7 percent, mainly linked to increased commercial activity.
The 9M-23 Group’s finance cost significantly increased by 34 percent to reach QR 163 million, as a result of persistently higher interest rates. However, further, to concluding the refinancing deal, the third quarter of this year witnessed a decline in finance costs compared to the previous quarter.
Overall, the Group’s 9M-23 financial performance is resilient, with strong revenue growth and healthy margins.
Revenue for Q3-23 increased by 5 percent compared to Q2-23, mainly on account of better revenue reported from the aviation segment due to growth in the domestic, international and MRO segments. The insurance segment also contributed positively to the quarterly revenue growth supported by new contracts added during the quarter.
Growth in revenue was slightly offset by negative movement in the topline from the drilling segment due to planned maintenance for two offshore rigs.
Net profit for the third quarter of 2023 decreased by 30 percent compared to the second quarter of 2023. This reduction in the Group’s net profit was mainly attributed to lower profitability from the aviation segment due to a negative inflationary impact of QR3 million during the third quarter of 2023 compared to a positive inflationary impact of QR40 million in the previous quarter.
Whilst the drilling segment reported losses due to a reduction in revenue during the quarter. The Group’s total assets increased by 6 percent during the current reporting period compared to last year and stood at QR10.3 billion as of September 30, 2023. Cash and short-term investments stood at QR1.2 billion, up by 7 percent compared to December 31, 2022.
Total debt at the Group level amounted to QR4.38 billion as of 30 September 2023. GIS’ recent debt restructuring is a significant achievement that will facilitate the company’s strategic repositioning and enhance its long-term growth prospects.
By gradually reducing its debt levels and lowering its borrowing costs, GIS will improve its financial flexibility and profitability. This will enable the company to invest more in its core business, pursue new growth opportunities, and strengthen its competitive position.
The drilling segment reported a revenue of QR978 million for the nine-month period ended 30 September 2023, up by 3 percent compared to the same period of last year.
The revenue growth was mainly driven by higher asset utilisation from the onshore segment due to the deployment of GDI 8 which was off-contract during the previous year. This was partially offset by lower revenue from the lift boat and barges segment due to the lift boat going off-contract during the previous quarter.
The segment reported a net loss of QR23 million for the nine-month period ended 30 September 2023, compared to a net loss of QR40 million for 9M-22. This loss reduction was primarily due to growth in segmental revenue and improved financial performance from the Joint venture with Seadrill. However, increased finance costs resulting from higher interest rates prior to the loan restructure partially offset these gains.
On a quarter-on-quarter basis, the segment reported a net loss of QR 2 million compared to a net profit of QR 1 million in the previous quarter. The loss reported was mainly due to lower revenue on the back of the planned maintenance of two offshore rigs during Q3 2023. Lower profitability was partially offset by the reduction in finance costs during the current quarter.
The aviation segment achieved a total revenue of QR 799 million for the nine-month period ended 30 September 2023, marking a notable 16 percent growth compared to the corresponding period in the prior year.
This increase can be primarily attributed to heightened flying activity witnessed within both domestic and international operations, coupled with robust revenue expansion across the maintenance, repair, and overhaul (MRO) business as well as the growth in revenue in international locations, notably Turkey and Angola.
During this period, the aviation segment achieved a net profit of QR340 million, marking an impressive 26 percent increase compared to the performance in 9M-22. This remarkable profit rise can be largely attributed to the aforementioned revenue expansion, coupled with higher finance income and positive inflationary impact in relation to the IAS 29 adjustment.
The segment revenue for Q3-23 against Q2-23 increased by 10 percent, mainly driven by higher revenue from the domestic segment due to the price increase adjustment recorded in the current quarter in addition to higher revenue from RSA supported by higher flying hours and new contracts mobilising in Lebanon and UAE.
The Q3-23 profitability decreased by 25 percent compared to the previous quarter mainly impacted by a negative inflationary impact of QR3 million during Q3 compared to positive inflationary impact of QR40 million in the previous quarter.
During the nine-month period ended 30 September 2023, the insurance segment reported a notable 38 percent increase in revenue compared to the corresponding period in the previous year, amounting to QR 855 million.
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 of 80 percent in comparison to the corresponding period of the preceding year, reaching QR83 million. 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.
Notably, an increase of QR16 million was observed in investment income for the nine-month period ended 30 September 2023 as compared to the same period in 2022.
This increase 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 a quarter-on-quarter basis, the segment revenue for Q3-23 increased by 12 percent. However, segmental profitability for Q3-23 declined by 31 percent, mainly due to higher net claims reported and lower investment income as compared to the previous quarter.
The catering segment reported a revenue of QR312 million, reflecting a reduction of 21 percent compared to the corresponding period of the previous year. The revenue reduction was mainly due to the completion of FIFA World Cup-related contracts, non-renewal of certain contracts within the catering segment, and lower occupancy levels experienced from the accommodation segment.
The segment reported a net profit of QR2 million for the nine-month period ended 30 September 2023, compared to a net profit of QR 1 million for 9M-22. This improvement in profitability was mainly due to higher finance income.
On a quarter-on-quarter basis, segmental revenue witnessed a marginal reduction of 1 percent compared to the previous quarter. On the other hand, the segment reported a net profit of QR0.1 million for the current quarter.