Doha: Gulf International Services (“GIS” or “the Group”; QE ticker: GISS), yesterday reported a net profit of QR90m for the three-month period ended 31 March 2023, with an earnings per share of QR 0.049.
Group’s revenue for the three-month period ended 31 March 2023 amounted to QR837m with an increase of 18 percent compared to the same period of last year. All business segments witnessed growth in revenue. Catering’s revenue of QR119m is presented separately as part of discontinued operations as per IFRS 5 requirements.
The Group reported an EBITDA of QR230m and recorded a net profit of QR90m for the three-month period ended 31 March 2023.
Group’s direct costs increased by 18 percent mainly linked to inclined commercial activity. The rise in interest rate has also negatively impacted the profitability of the Group. 1Q-23 Group’s finance cost significantly increased by 128 percent to reach QR67m. GIS is committed to maintain its financial stability and growth, and it is taking proactive steps to address the impacts of the rise in interest on its profitability.
Moreover, performance of the insurance segment’s investment portfolio was negatively impacted, amid volatilities in capital markets, and a decline of QR28m(-71 percent) was noted on account of investment income2 versus last year. This decline was mainly linked to unrealized losses booked on revaluation of held for trading investment securities.
Group’s total assets remained flat compared to last year and stood at QR10.7bn as at 31 March 2023. Cash and short-term investments stood at QR1.04bn, down by 9 percent as compared to 31 December 2022. The decline in cash and short-term investments was mainly linked to payment of dividends for the financial year 2022.
Total debt at Group level amounted to QR4.29bn as at 31 March 2023. 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. GIS is already at its final stages of finalizing a deal to refinance the existing loan terms with the involved lenders, with an aim to provide greater flexibility to manage liquidity and ease pressure on the Group’s financial position.
Drilling segment reported a revenue of QR337m for the three-month period ended 31 March 2023, up by 5 percent compared to 1Q-22. Revenue growth has been driven by higher rig utilization which increased to 96 percent, including deployment of an onshore drilling rig (GDI-8) during 4Q-22. In addition, GDI noted higher revenue from the liftboat segment, as both the liftboats remained fully operational during 1Q-23 versus the same period of last year, where one of the liftboats became operational during mid of 1Q-22.
Aviation segment reported a total revenue of QR226m for the three-month period ended 31 March 2023, with an increase of 10% compared to 1Q-22. The increase was mainly attributed to higher flying activity recorded, within both domestic and international operations. Total flying hours increased by 33% on a year-on-year basis, where locally the flying hours increased by 23 percent, while within the international segment flying hours increased by 50 percent. Within international segment, the highest increase was reported from the Turkish operations, mainly as a result of local fleet expansion linked to better market penetration. Also, MRO business remained strong, despite a marginal decline in its topline. Segment’s net profit reached QR82m, representing an increase of 4 percent compared to 1Q-22, mainly on account of growth in revenue.
Revenue within the insurance segment for the three-month period ended 31 March 2023, increased by 44% as compared to 1Q-22, to reach QR 273 million. Increase in revenue was mainly linked to winning new contracts within the medical line of business.
Catering segment reported a revenue of QR119m, an increase of 4 percent as compared to 1Q-22. Revenue increase was mainly due to the growth in revenue within the manpower segment. The segment reported a net profit of QR5m for the three-month period ended 31 March 2023, compared to a net profit of QR0.1m for 1Q-22, mainly due to higher revenues.
GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters on Wednesday, 10 May 2023 at 1:30 p.m. Doha time. The IR presentation that accompanies the conference call will be posted on the ‘financial information’ page within the Investor Relations section at GIS’ website.
