Doha: Gulf International Services (GIS), yesterday reported a net profit of QR266m for the nine-month period ended September 30, 2022, showing an increase of 545 percent compared to QR41m during the same period last year. Earnings per share grew to QR0.143 from QR0.022 during the same period in 2021.
The Group’s revenue for the nine-month period ended September 30, 2022 amounted to QR2.7bn, with an increase of 19 percent compared to QR2.2bn during the same period last year. Revenue growth from aviation, drilling and catering segments led to an overall increase in the Group revenue. However, this was partially offset by negative growth noted in revenue from the insurance segment.
The Group reported an EBITDA of QR624m, registering a 49 percent growth from QR418m during the same period in 2021.
Growth in the Group’s revenues 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.
Group’s finance cost for 9M-22 had significantly increased by 28 percent to reach QR123m, as a result of persistently higher interest rates. Foreign currency revaluation losses from GHC’s Turkish subsidiary also contributed negatively to the Group’s profitability. On the other hand, general and administrative expenses remained flat on a year-on-year basis.
Moreover, performance of the insurance segment’s investment portfolio was negatively impacted, amid volatilities in capital markets, and a decline of QR39m (-74 percent) was noted on account of investment income versus 9M-21. This decline was mainly linked to unrealised losses booked on revaluation of held for trading investment securities.
Revenue for 3Q-22 increased by 3 percent to QR927m compared to QR903m in 2Q-22, mainly on account of better revenue reported from aviation, catering and drilling segments, which was slightly offset by negative movement in topline from the insurance segment.
Net profit for 3Q-22 increased by 16 percent to QR98m compared to QR85m in 2Q-22. This growth in the Group’s net profit was mainly attributed to positive growth in profitability from aviation, catering and insurance segments, while drilling segment’s losses slightly increased on a quarter-on-quarter basis.
Revenue for 3Q-22 increased by 14 percent to QR927m compared to QR815m in 3Q-21, mainly on account of higher revenue growth achieved by aviation, catering and drilling segments, which was slightly offset by negative revenue growth reported by the insurance segment.
Net profit for 3Q-22 increased by 134 percent to QR98m compared to QR42m in 3Q-21. This growth in the Group’s bottom-line profitability was mainly linked to continued growth achieved by the aviation segment, amid better flying activity. Additionally, catering and drilling segments also reported recovery in the bottom-line, mainly due to healthier business dynamics. However, insurance segment’s net earnings decreased due to a decline noted in the segmental revenue, coupled with lower investment income reported mainly on account of unrealised losses booked on revaluation of held for trading investment securities.
The Group total assets increased by 6 percent during the current reporting period compared to December 31, 2021 and stood at QR10.5bn as at September 30, 2022. Cash and short-term investments stood at QR1.0bn, up by 50 percent compared to December 31, 2021. Growth in cash and cash equivalents is mainly attributed to an overall increase in the Group’s profitability, coupled with improved business dynamics.
Total debt at the Group level amounted to QR4.29bn as at September 30, 2022. Current levels of debt continue to weigh on the Group net earnings, as finance cost is one of the key cost elements and specifically limits the drilling segment’s ability to accomplish its desired profitability. GIS management is in continuous discussions with the key stakeholders to restructure the debt, with a target to achieve greater flexibility to manage its liquidity and ease pressure on the Group’s financial position.
The drilling segment reported a revenue of QR950m for the nine-month period ended September 30, 2022, up by 33 percent compared to 9M-21.
The aviation segment reported a total revenue of QR689m for the nine-month period ended September 30, 2022, with an increase of 31 percent compared to 9M-21. The increase was mainly attributed to higher flying activity recorded within domestic and international operations, coupled with growth in revenue noted across all the operations, including MRO business and international locations; especially Turkey and Angola. The segment’s net profit reached QR262m, representing an increase of 50 percent compared to 9M-21, mainly due to growth in revenue, despite material impacts of currency devaluation from the Turkish subsidiary.
Revenue within the insurance segment for the nine-month period ended September 30, 2022 decreased by 15 percent as compared to 9M-21, to reach QR632m. The decline in revenue was mainly linked to loss of two insurance contracts within the medical line of business, since the start of current year. The decline was partially offset by growth in premiums from the general insurance line of business, on account of renewals of existing contracts with wider coverage and scope.
The catering segment reported a revenue of QR394m, with an increase of 53 percent compared to 9M-21. Revenue increase was mainly due to the growth noted in revenue within the manpower segment on the back of realisations from a new contract won during latter part of last year.
In accordance with the proposed amendments to the Articles of Association approved during the Company’s Extraordinary General Assembly meeting held in March 2022, the Board of Directors can decide on the foreign ownership limit, as per applicable laws and regulations, and may increase the foreign ownership limit up to 100 percent. Accordingly, a decision was made by the Company’s Board of Directors at its meeting held in April 2022 to increase the ownership limit for non-Qatari shareholders to 100 percent.
Pursuant to a decision made by the Council of Ministers in its meeting held on October 12, 2022, it was approved to increase the percentage of ownership of the non-Qatari investor in the Company’s capital up to 100 percent. All necessary measures will be taken in this regard with the relevant authorities GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters on Thursday, November 3, 2022 at 1:30pm 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.
