Gulf International Services (GIS), one of the largest diversified service groups in Qatar, reported a net profit of QR54m for the six months period ended 30 June 2020.
During the first half of 2020 (1H-20), the Group witnessed an improvement on the topline performance evidenced by revenue growth and improved net margins. The Group’s bottom line profitability witnessed a strong improvement compared to last year.
The aviation segment continued to build up on the strong financial performance with superior revenues and quality earnings. The insurance segment continued its efforts in improving premiums and was successfully able to renew additional contracts during Q2-20, with superior pricing terms. Moreover, new clients added to the medical segment during Q2-20, continuing its momentum of expanding market share within the medical line of business.
Also, with recovery of financial markets, coupled with strategic re-allocation of the investment portfolio, aided a recovery of 172 percent on the unrealised investment revaluation losses made in Q1-20. The catering segment has also successfully won new catering and manpower contracts, with higher occupancy levels at the site camps.
The momentum in drilling segment was affected by lower rig utilization rates, which mainly affected the segment’s performance in Q2-20, offset by the realizations of NFE project where the first rig already commenced its operations starting from late March 2020 and bringing additional revenue streams for the segment.
Commenting on the Group’s financial and operational performance for the first half of 2020, Sheikh Khalid bin Khalifa Al Thani, Chairman of the Board of Directors, said: “Despite the macroeconomic challenges posed to the Group due to the spread of COVID-19 pandemic and recent deterioration of oil market, GIS continued the journey towards repositioning its segments led by the Group’s focus on high utilization of assets, combined with a commitment to expand market share and rationalizing its operating costs, so as to build solid foundations for revenue and profit growth. This strategy has particularly helped all the segments to contribute to the Group’s performance, which translated into the Group’s improved financial performance.
In response to limit the spread of COVID-19 pandemic and ensure our operations remained resilient, our companies implemented several measures to ensure safety of our employees and business continuity.
Going forward, GIS group companies will continue to strive to maintain market share, with an eye on growth, and would diligently chase the industry benchmarks, in term of cost competiveness, which could drive future profitability and lead towards shareholder value creation.”
Group’s revenue for the first half of 2020 grew by 6 percent, to reach QR1.6bn, compared to the same period last year, driven by strong growth across all the business segments, with an exception of drilling segment.
The Group reported an EBITDA of QR359m during the period. The QR54m net profit posted during the first half of 2020 reflected an increase of 84 percent, compared to the same period last year.
Net profit continued to reflect the growth across all segments. The aviation segment showed strong operational and financial performance owing to the market expansion strategy. Similarly, the drilling segment demonstrated a moderate recovery due to rationalization of operating costs, including general & administrative expenses. However, topline performance of the drilling segment was largely impacted by the lower rig utilization rates, due to travel restrictions imposed to contain the spread of COVID-19 pandemic which affected the crew repatriation process, which led to a reduction in revenues compared to last year.
Operating profits improved by 41 percent, to reach QR193m in 1H-20, as compared to QR 137m for the same period last year. The increase in profitability was mainly attributable to the improved revenue compared to last year.
Finance cost also decreased by 21 percent, to reach QR98m in 1H-20, as compared to QR125m in 1H-19, on the back of the declining interest rates.
Revenue for the second quarter, represented a 13 percent reduction compared to the first quarter of 2020, mainly impacted by macroeconomic headwinds, due to the COVID-19 lockdowns leading to lowered economic activity. The drilling segment revenue reduced by 20 percent compared to Q1-20, which was mainly due to the lower rig utilization rates. P14
