DOHA: Gulf International Services (GIS), one of the largest diversified services groups in Qatar, has reported a net profit of QR44m for the year 2019, up 144 percent from a net loss of QR98m in 2018 underpinned by strong revenue growth.
The Group’s total revenue for the year ended December 31, 2019 surged 20 percent from 2018, to reach QR3bn as compared to QR2.5bn in the previous year, following significant expansion in premiums from insurance business and international expansion of aviation business.
The GIS Group reported an EBITDA of QR724m for the financial year ended December 31, 2019.
The GIS is one of the largest diversified services groups in Qatar with business interests in oil and gas drilling, insurance, helicopter transportation and catering services.
The operating profits of GIS increased by 152 percent from 2018, to reach QR247m as compared to QR98m in last year. The improved profitability for the year is an outcome of boosted revenues, lowered general and administrative costs and no requirement for impairment provisioning.
Sheikh Khalid bin Khalifa Al Thani, Chairman of the Board of Directors, said: “GIS made significant progress in 2019 toward repositioning the Group on a more solid foundation of revenue and profit growth. The improved financial and operational results presented today are evident of the Group’s ability to effectively build market share through targeted expansion, cost optimization and efficiency. Going forward, GIS group companies will continue to strive to maintain market share with an eye on growth, stressing on industry benchmarked cost competitiveness, which could drive to add profitability and lead towards shareholder value creation.”
2019 was an exceptional year for GIS, where efforts were made to reposition the Group that not only improved the cost base of subsidiaries, with an objective to be competitive, but also the Group’s improved performance was underpinned by success across all the Group subsidiaries, where new contracts were won, resulting in improved revenues and asset utilisation.
GIS is well-positioned to build momentum as all of the Group’s subsidiaries are looking ahead to growth in revenue and profits. The realisation of Qatar’s North Field Expansion (NFE) project, which aims to significantly raise the nation’s total natural gas production capacity from 77 million tonnes per annum to 126 million tonnes per annum by 2027, will provide many opportunities going forward for the Group to capture significant market share in oil and gas services, which will drive future gains at GIS.
The finance cost increased by 5 percent, to reach QR237m in 2019 as compared to QR225m in 2018. Due to a large debt position mainly at the Group’s drilling segment level, the operating profits are negatively affected by the overall finance cost size, which leaves the Group with a reduced net earnings base, overshadows the alleviated business performance. The Group aims to optimize levels of funding at a competitive financing arrangement, with a core objective of reducing overall finance cost, which could ultimately lead to optimizing finance costs, improved profitability and enhance shareholder value.
Revenue for the fourth quarter reached QR773m, representing a 1 percent increase compared to the third quarter of 2019. Net profit for the fourth quarter of 2019 advanced 70 percent to reach QR9m compared to QR5.3m in the third quarter of 2019.
The Group’s total assets also rose 4 percent during the year to reach QR10.8bn as at December 31, 2019. On the liquidity front, the closing cash, including short-term investments, stood at QR908m up by QR19m and total debt of QR4.7bn as of December 31, 2019, down by QR309m compared to the last year. During the year, the Group paid QR548m towards debt servicing for principal repayment and interest payout as compared to QR374m in 2018.
