Gulf International Services (GIS) yesterday reported a net profit of QR83m for the three-month period ended March 31, 2022, with an earnings per share of QR0.045.
The Group’s revenue for the first quarter of the year reached QR835m, an increase of 18 percent from QR705m during the same period last year. Revenue growth from the aviation, drilling and catering segments led to an overall increase in the Group revenue. This was partially offset by a negative contribution in revenue from the insurance segment.
GIS reported an EBITDA of QR198m, an increase of 77 percent from QR112m during the same period in 2021. The growth in Group revenues led to the overall increase in net earnings. On the other hand, the Group’s direct costs increased by 7 percent mainly linked to inclined commercial activity.
The Group’s total assets remained relatively flat during the year and stood at QR10.1bn as at March 31, 2022, an increase of 2 percent from QR9.9bn during the previous quarter. Cash and short-term investments stood at QR837m, up by 20 percent compared to QR698m in December 2021.
Total debt at Group level amounted to QR4.3bn as at March 31, 2022. Current levels of debt continue to weigh on the Group’s net earnings, as finance cost is one of the key cost ingredients, and specifically limits drilling segment’s ability to accomplish the required profitability. Group’s management is in continuous discussion with different key stakeholders to restructure the debt with an aim to provide greater flexibility to manage liquidity and ease pressure on the Group’s financial position.
During the first quarter of 2022, the Drilling segment entered international markets with two new contracts for liftboats. New contracts were won in KSA and Maldives for liftboats, building international footprints for the segment, while enhancing asset utilisation.
The Drilling segment reported a revenue of QR321m for the first quarter of 2022, up by 62 percent compared to Q1 2021. The segment reported a net loss of QR10m for Q1 2022, compared to a net loss of QR72m during the same period last year. Reduction in losses was mainly attributed to growth in segmental revenue.
The Aviation segment continues to witness improved set of performance with better flying activity within both domestic and international operations. Also, contributions from MRO and international business continue to support the segment performance.
The Group’s Aviation segment reported a total revenue of QR206m for the first quarter of 2022, with an increase of 25 percent compared to Q1 2021. The increase was mainly attributed to higher flying activity recorded within both domestic and international operations, coupled with growth in revenue noted across the international operations, mainly from the Turkish subsidiary.
The segmental net profit reached QR79m, representing an increase of 59 percent compared to Q1 2021, mainly on account of growth in revenue.
The Insurance segment managed to build up its strong performance by further expanding its general line of business. However, medical insurance business witnessed loss of certain contracts. Efforts are underway to explore new opportunities within domestic retail and SME markets. Also, performance of the segment investment portfolio remained strong, on the back of surge in capital markets.
Revenue within the insurance segment for three-month period ended March 31, 2022 decreased by 24 percent compared to Q1 2021, to reach QR195m. Decline in revenue was mainly linked to loss of two insurance contracts within medical line of business. This decline was partially offset by growth in premiums from the general insurance line of business, on account of new contracts and renewals of existing contracts. On the contrary, segmental net earnings increased by 22 percent compared to Q1 2021, to reach QR19m.
The Catering segment improved its performance on the back of realisations from the new contract won during last year. Additionally, certain contracts have been renewed within manpower segments, with broader scope improving overall service volumes for the segment. Moreover, the segment was able to improve its profitability margins, as industry specific pandemic-linked restrictions gradually started to subside.
The catering segment reported a revenue of QR113m, an increase of 31 percent compared to the same period last year. Revenue increase was mainly due to the growth in revenue within the manpower segment, on the back of realisations from a new contract won during last year. The segment reported a net profit of QR100k for the three-month period ended March 31, 2022, compared to a net loss of QR500m for Q1 2021, mainly due to higher revenues.
GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters today at 2:00pm Doha time. The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at GIS’ website.
