GIS Declares Record Third Quarter Results

GIS Declares Record Third Quarter Results

20-10-2014

GIS DECLARES RECORD THIRD QUARTER RESULTS

  • Highest third quarter year-to-date revenue and net profit on record
  • Revenue closed at QR 2.7 billion - an increase of 60%
  • Net profit up more than 70% to QR 781 million
  • Drilling profit up by QR 284 million following buy-out of overseas drilling partner, deployment of new drilling assets, and negotiation of enhanced contract extensions
  • Gulf Helicopters expands its fleet to 47 helicopters
  • Insurance revenue grows to cross the QR 500 million mark
  • Amwaj adds new catering contracts, net profit grows by 77%

DOHA, QATAR - Gulf International Services (“GIS” or “the group”; QE: GISS), the largest service group in Qatar, with interests in a broad cross-section of industries, ranging from insurance, re-insurance, fund management, onshore and offshore drilling, accommodation barge, helicopter transportation, and catering services, announced its financial results for the nine months ended September 30, 2014 with revenue of QR 2.7 billion and net profit of QR 0.8 billion.

Financial Results

Revenue

Group revenue for the nine months ended September 30, 2014 was QR 2.7 billion, representing a significant increase of QR 1.0 billion, or 60.0% over the same period last year; however, on a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR 3.1 billion, an increase of QR 0.7 billion, or 32.3%, versus the same period of 2013.

The group’s share in revenue from Gulf Drilling International Company for the first nine months of 2014 was QR 1.2 billion, a significant increase year-on-year of QR 0.6 billion, or 96.7%.  This performance was driven largely by the offshore sector, which contributed 81.5% of total revenue, with the deployment of Al-Jassra and Leshat offshore rigs in the second and fourth quarters of 2013 respectively, Msheireb offshore rig in the second quarter of 2014, a new accommodation lift-boat, Rumailah, in the third quarter of 2014, and to favourable extensions for three rolled-over offshore contracts covering the rigs Al-Doha, Al-Zubarah and Al-Rayyan during 2013.

Aviation segmental revenue for the first nine months increased by a moderate QR 16.3 million, or 3.5%, to total QR 479.5 million, as an increase in the number of helicopters in the fleet (2014, Q3: 47 helicopters versus 2013, Q3: 43 helicopters) and the success of GHC’s proactive business development strategy which resulted in operations in a number of new territories, were partially mitigated by  the end of its long-term relationship with the National Health Authority for providing a helicopter emergency medical service.

The group’s insurance subsidiary registered gross insurance revenue for the period ended September 30, 2014 of QR 547.7 million, a resolute QR 30.0 million, or 5.8%, improvement on the same period of 2013.  The main contributor to this growth was the medical line of business which reported a year-on-year increase of 21.4% and now constitutes approximately 43% of Al Koot’s annual revenue.  Results in the core Energy line shrunk by a minimal 2.9%, in line with Qatar Petroleum’s reduced capital expenditure activity.

Amwaj Catering Services Limited contributed QR 815.3 million to group revenue, representing the second largest segment of group revenue.  Compared to last year, the segment improved by QR 101.7 million, or 14.3%, due to the expansion of the core industrial catering and manpower contracting services.

Net Profit

Net profit for the year-to-date closed at QR 781.4 million, a significant year-on-year increase of QR 322.2 million, or 70.2%.  This year-on-year improvement was driven by the ambitious growth plans across all segments, especially in the Drilling segment.

The favorable year-on-year positive net profit variance in the Drilling segment of QR 284.2 million, or 174.7%, was driven primarily by the additional profit attributable to the buyout of the interest held by its overseas drilling partner, the commencement of Al-Jassra, Leshat, Msheireb and Rumailah operations, and to higher daily rates received for the extension of three offshore rig contracts in 2013.  Aviation segment earnings were impacted by operating cost increases, as the subsidiary registered a modest QR 7.6 million reduction in year-on-year net profit to close at QR 179.9 million.  Profit in the Insurance segment reached QR 90.2 million, an increase of QR 12.6 million, or 16.2%, as strong gains on the company’s investment portfolio were partially offset by increased major insurance claims.  Net profit in the Catering segment was QR 87.0 million, up by QR 37.8 million, or 76.9%, as the subsidiary benefitted from its business expansion strategy, improved margins due to reduced operating costs and the commencement of shut-down related services in the plants of our clients.

Conclusion

GIS is confident that with each of the group companies’ strong fundamentals and exciting and ambitious capital investment plans, the group will continue to grow and meet shareholders’ expectations.

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