GIS reports revenue of QR2.2 bn for first nine months of 2021

Tribune News Network Doha Gulf International Services (GIS) on Thursday announced that the company reported a net profit of QR41 million for the first nin...

Tribune News NetworkDoha Gulf International Services (GIS) on Thursday announced that the company reported a net profit of QR41 million for the first nine months of 2021 with earnings per share of QR 0.022.The oil and gas industry continues to witness positive signs of recovery with constructive macroeconomic drivers, on the back of effective vaccination campaigns linking to improved activity with strong oil prices, bringing opportunities for future exploration and related services industries.Post-pandemic recovery for the Group remained uneven, with aviation and insurance segments reporting persistent improved set of results, while the drilling segment remained under pressure until the first half of the year, whereas the latest strategic realisations within the drilling segment resulted in an improved set of results for the segment during the third quarter of 2021.According to the company, rig day rates for the offshore fleet improved during the third quarter of 2021, as the new day rates took effect starting from July this year and led to improved financial performance for the segment during the third quarter of 2021.Within the onshore fleet, two suspended rigs were deployed and commenced operations during the third quarter of 2021, after a year of suspension since the COVID-19 outbreak. Moreover, all the five Gulfdrill JV rigs remained fully operational since the second quarter of 2021.The aviation segment continues to witness improved performance with better flying activity within both domestic and international operations on account of ease of restrictions, coupled with the successful renewal of some international aviation contracts. Also, additional contributions from MRO business continued to support the segment’s financial performance. Moreover, the Turkish subsidiary and Moroccan venture added one new aircraft each during the year, in order to meet increased demand from the market. This was in addition to a new helicopter (AW139) being added during the year to the domestic fleet, as a back-up to existing operations.The Group’s Insurance segment managed to build up its strong performance, achieved throughout the period by further expanding both the medical and general lines of businesses, where successful renewal of major contracts and additional coverage for major contracts within the energy line of business were main highlights. Additionally, the segment continued to expand its footprints within the domestic SME market, specifically within the medical line of business and added new clients during the period.The catering segment continues to remain under pressure with restrictions mandated since the start of the pandemic in relation to food delivery, transportation and manpower accommodation. This has affected the segment’s performance in terms of lowered revenues, coupled with an additional layer of costs incurred in order to comply with the requirements leading to negative margins for the segment since the pandemic. However, despite stiff market challenges faced during the period, the segment was able to win new contracts within the manpower line of business.The Group’s revenue for the nine-month period of 2021 amounted to QR 2.2 billion, with a marginal reduction of 1 percent compared to the same period last year. Revenue growth from insurance and aviation segments was entirely offset by negative growth in revenue from both drilling and catering segments.The Group reported an EBITDA of QR417 million. The decline in Group revenues led to a decline in net earnings. Moreover, direct costs increased by 3 percent negatively affecting the Group’s profitability and were mainly due to an increase in activity within drilling and aviation segments coupled with increased claims within the insurance segment, partially offset by direct cost reduction noted in the catering segment.The Group’s finance cost declined by 27 percent to reach QR 96 million compared to QR 131 million for the same period last year, against a backdrop of lower interest rates. Similarly, general and administrative expenses declined by 1 percent on account of continued optimisation programmes.Moreover, the performance of the Group’s investment portfolio was positively impacted due to recovery in capital markets, and a recovery amounting to QR38 million was noted on account of unrealised gains on the revaluation of investment securities when compared to the same period of last year.Revenue for the third quarter of 2021 represented an increase of 12 percent compared to the second quarter of 2021, mainly on account of growth in revenue from aviation, insurance and drilling segments, partially offset by a decline in revenue from catering.The net profit QR42 million for the third quarter of 2021 was an increase of 783 percent compared to the second quarter of 2021. This was mainly linked to recovery in losses within the drilling segment, coupled with continued momentum from the aviation segment.The Group’s total assets increased by 2 percent during the year, to reach QR10.2 billion as of September 30, 2021, compared to last year. Cash and short term investments stood at QR763 million, up by 10 percent as compared to December 31, 2020. Total debt at the Group level amounted to QR4.4 billion as of September 30, 2021. Current levels of debt continue to impact the Group’s net earnings.The drilling segment reported revenue of QR 716 million for the nine-month period, down by 1 percent compared to last year. Revenue was mainly impacted by rigs’suspension within the onshore fleet carried forward since last year until the first half of 2021, where two of the suspended rigs had commenced operations during the third quarter 21. In addition, rig day rates remained depressed during the first half of the year and impacted revenue growth on a year-on-year basis.This segment reported a net loss of QR159 million for the nine-month period of 2021, compared to a net loss of QR120 million for the same period of last year. The increase in losses was primarily attributed to negative growth in revenue. However, this was partially offset by a decline of QR 31 million in segment’s finance cost compared to the first nine months of 2020, on account of lower interest rates. On quarter-on-quarter basis losses for the segment declined with improved revenues.The aviation segment reported total revenue of QR 528 million for the nine-month period with an increase of 8 percent compared to the same period of last year. The increase was mainly attributed to higher flying hours recorded within both domestic and international operations, coupled with growth in revenue noted across all the businesses within the segment.Segment’s net profit reached QR175 million, representing an increase of 13 percent compared to the first nine months of 2020, mainly on account of revenue growth.Segment revenue for the third quarter of 2021 against the second quarter of 2021 increased by 10 percent, mainly due to improved flying activity coupled with better results from the Turkish subsidiary. The third quarter profitability improved by 2 percent in comparison to previous quarter’s net earnings, in line with positive revenue growth.Revenue within the insurance segment for the nine-month period increased by 1 percent as compared to the same period last year to reach QR745 million. Growth in premiums from the general insurance line of business was entirely offset against a decline in premiums from the medical line of business.Segmental net earnings increased by 44 percent as compared to the same period last year, to reach QR50 million. Strong growth in net profits was mainly supported by strong recovery within the segment’s investment portfolio on the back of a recovery in capital markets. Unrealized gain on revaluation of investment portfolio contributed QR38 million positively towards segment’s net earnings for the nine-month period ended September 30, 2021, in comparison to the same period of last year.In terms of claims, there had been an increase noted during the first nine months of 2021, especially within the medical line of business driven by ease of restrictions enabling more visits to hospitals and doctors’ consultations.Segment revenue for the third quarter of 2021 against the second quarter of 2021 increased by 17 percent, mainly due to policy renewal within general insurance line of business. On the other hand, third-quarter profitability marginally improved by 3 percent in comparison to the third quarter of 2021, mainly on the back of improved segmental revenue which was offset by higher claims and reinsurance costs.The catering segment reported a revenue of QR258 million, with a decline of 19 percent as compared to the same period of last year. This was mainly due to ongoing COVID-19 related restrictions that resulted in a lower number of meals being served across the majority of catering locations. This was in addition to the loss of some contracts within both manpower and catering contracts, which adversely affected the overall growth.The segment reported a net loss of QR19 million for the nine-month period compared to a net loss of QR 4 million for the same period last year, mainly due to lowered margins and declining revenues.On a quarter-on-quarter basis, the catering segment continue to report a declining trend, where revenue for the third quarter of 2021 marginally decreased by 1 percent due to the loss of a catering contract during the current quarter, while profitability remained negative on account of depressed margins.