GIS reports QR54mn net profit in 2021

Gulf International Services (GIS) – which is the umbrella organisation of Gulf Drilling International (GDI), Gulf Helicopters, Al Koot and Amwaj – is back in the black, reporting a QR54mn net profit in 2021 against QR319mn net loss in 2020.

Gulf International Services (GIS) – which is the umbrella organisation of Gulf Drilling International (GDI), Gulf Helicopters, Al Koot and Amwaj – is back in the black, reporting a QR54mn net profit in 2021 against QR319mn net loss in 2020. With the current post-pandemic recovery phase and current year’s financial performance, the board decided against paying dividend for 2021 as it would bring an additional burden on the group’s liquidity position and may create obstacles to its future plans of achieving long-term sustainability, while reducing reliance on external sources of finance, according to a company statement. The group’s revenue amounted to QR3.1bn, showing an increase of 3% compared to 2020. Revenue growth from insurance, aviation and drilling segments was mainly offset by fall in revenue from the catering segment. The group’s finance cost declined 21% year-on-year to QR129mn, on the back of lower interest rates and repayment of some loans. General and administrative expenses fell by 7% on account of continued optimisation initiatives. The performance of group’s investment portfolio was positively impacted by a recovery in capital markets, and a variance amounting to QR23mn was noted on account of unrealised gains on revaluation of investment securities. Total assets remained relatively flat at QR9.9bn at the end of December 2021. Cash and short-term investments stood at QR698mn, up 1% on a yearly basis. Total debt at group level was QR4.3bn in 2021. 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. The GDI's revenue grew 10% to QR1bn in 2021, mainly driven by comparably higher newly implemented rig day-rates for the offshore fleet, which took effect from July 2021. In addition, two of the suspended rigs commenced operations during the third quarter, which positively added to the segment’s topline. Moreover, the deployment of three additional rigs as part of Gulfdrill joint venture's fleet during the second quarter of 2021, had a positive impact on segment’s revenue trajectory, amid higher management fees. The segment improved its bottom-line as its net loss was brought down to QR201mn in 2021 against QR453mn in 2020. The reduction in losses was mainly attributed to growth in segmental revenue and a decline in the segment’s finance cost. “As we enter a post-pandemic recovery phase, our group companies demonstrated resilience. Our strategic alignment with our customers within the drilling segment was a key achievement and new contracts won internationally for the first time in the segment’s history," GIS board opined. The aviation segment reported a 5% yearly jump in total revenue to QR722mn, mainly due to higher flying activity recorded within domestic and international operations, coupled with growth in revenue noted across all the businesses. The segment’s net profit reached QR221mn, representing a year-on-year jump of 91%, mainly on account of revenue growth. Revenue within the insurance was up 1% to QR988mn. The growth in premiums from general insurance line of business, almost entirely offset against decline in premiums from medical line of business. The segmental net earnings increased by 16% year-on-year to QR60mn, mainly supported by a robust recovery within the segment’s investment portfolio on the back of recovery in capital markets. "Owing to our aggressive market penetration strategy within the insurance segment, we successfully enhanced our presence within general insurance line of business and small and medium enterprises sector within medical insurance," the board said. The catering segment reported a revenue of QR361mn, a decline of 11% on a yearly basis, mainly due to ongoing Covid-19 related restrictions which resulted in lower number of meals being served across majority of catering locations. The segment reported a net loss of QR15mn in 2021 compared to a net loss of QR10mn in 2020, mainly due to lowered margins and declining revenues.