Gulf International Services (GIS), one of the largest services groups in Qatar, yesterday reported 16 percent growth (y-o-y) in the group’s total revenue at QR832m for the first three months of this year ended March 31, 2020 compared to the corresponding period last year.
The group has averaged an EBITDA (earnings before interest, tax, depreciation and amortisation) of QR156m; and posted a net profit of QR8.7m for the first quarter, a decline of 65 percent compared to the same period last year. Earnings per share (EPS) stood at QR0.005 compared to QR0.014 for the same period in 2019.
Sheikh Khalid bin Khalifa Al Thani, Chairman of the Board of Directors at GIS, said: “GIS continued the journey towards repositioning its segments led by the group’s focus on high utilisation of assets, combined with a commitment to expand market share and rationalising its operating costs, so as to build solid foundations of revenue and profit growth.
This strategy has particularly helped all the segments to contribute to the group’s performance which translated into improved group revenues. However, the bottom line profitability was impacted by the market volatilities affecting the investment portfolio amid unprecedented dual headwinds of COVID-19 and oil price decline”.
He added: “In response to limit the spread of COVID-19 pandemic and ensure our operations remained resilient, our subsidiaries implemented several measures to ensure safety of employees and business continuity. Going forward, GIS group companies will continue to strive to maintain market share with an eye on growth, stressing on industry benchmarked cost competiveness, which could drive to add profitability and lead towards shareholder value creation.” The group’s financial results reflected continued growth in the net income, with exception of the insurance segment.
The aviation segment showed strong operational and financial performance owing to the market expansion strategy. Similarly, the drilling segment demonstrated a strong recovery due to rationalisation of operating costs and general & administrative expenses. Going forward, the drilling segment will continue to work on identifying further cost saving avenues in the future, where the new joint venture is expected to bring additional growth on the topline.
Operating profits declined by 31 percent to QR53m for the first quarter, compared to QR77m for the same period last year. The finance cost decreased by 15 percent to QR51m compared to QR60m for the same period in 2019. The group’s total assets rose 3 percent during the current reporting period at QR11bn, compared to the fourth quarter of 2019. On the liquidity front, the closing cash, including short-term investments, stood at QR1bn, up by QR94m.
The total debt at group level stood at QR4.8bn as of March 31, 2020. The drilling segment witnessed an improvement compared to last year. Drilling revenues for the period saw a marginal increase of 2 percent to reach QR290m.
Looking ahead, the drilling segment is uniquely placed to unlock solid growth opportunities, mainly due to the North Field expansion project for which GIS’s joint venture has been awarded a contract to provide six premium jack-up rigs, where the jack up rig “GulfDrill Lovanda” has already commenced operations at the end of the quarter, while other jack-up rigs will commence operations in various phases during this year.
Revenue within the insurance segment rose to QR231m for the first quarter, up by QR40m, or 21 percent, compared to the same period last year. However, the segment net profit declined by QR62m, reaching a net loss of QR45m compared to the first quarter of 2019.
The segment net profit was severely impacted by negative unrealised mark-tomarket movement in the investment portfolio, as a result of the current market volatility amid COVID 19 outbreak. Aviation segmental revenue totaled QR185m for the first quarter, with an increase of QR45m, or 32 percent, which translated into a 63 percent growth in segment net earnings at QR58m.
Going forward, the aviation segment will continue to focus on key international markets. Also, the segment acquisition of a 49 percent stake in Air Ocean Maroc in 2019, is set to spur further growth, which is currently looking at opportunities in Morocco, Western Africa and South of Europe.
The Group’s catering segment witnessed growth in revenues by 19 percent to QR135m for the first quarter; registering growth in profits by 94 percent to QR8m compared to the same period last year. GIS will host an IR earnings call with investors to discuss its first-quarter results, business outlook and other matters yesterday at 1:30pm Doha Time.
The IR presentation that accompanies the conference call will be posted on the publications page of GIS’s website.
