Gulf International Services (GIS) – a holding entity of Gulf Drilling International (GDI), Gulf Helicopters (GHC), Al Koot and Amwaj – has reported net profit of QR290mn in 2022, representing a more five-fold jump year-on-year.
The board has recommended a cash dividend of 10% or QR0.1 per share. From the initial public offering from February 2008 through 2016, the shareholders have received accumulated cash dividends of QR2.7bn, equivalent to QR16.6 per share, with an average payout ratio of 52%. In addition, shareholders have received a total of 63mn additional shares through three bonus issuances since inception.
The group’s revenue grew 19% to QR3.67bn, mainly due to aviation, drilling and catering sectors, even as this was partially offset by the negative growth in insurance revenue.
GIS' finance cost significantly grew 41% to QR182mn, on persistently higher interest rates. Net monetary losses from the accounting impacts of hyperinflation from GHC’s Turkish subsidiary (QR-11mn) also contributed negatively to the group’s profitability.
Total assets increased by 10% to QR10.9bn in 2022. Cash and short-term investments stood at QR1.1bn, mainly on an overall increase in the group’s profitability, coupled with improved cash flow generation.
Total debt at the group level was QR4.29bn in 2022. Current levels of debt continue to weigh on the group net earnings, as finance cost is one of the key cost elements and specifically limits the drilling segment’s ability to accomplish its desired profitability.
The drilling segment's revenue grew 26% to QR1.3bn in 2022, linked to comparatively higher rig day-rates for the offshore fleet since the July 2021. Also, redeployment of two onshore suspended rigs, along with commencement of operations of GDI-8, positively contributed to the segment’s topline performance for the current year.
Moreover, full deployment of Gulfdrill joint venture's fleet since the second quarter of 2021, had a positive impact on the segment revenue on account of comparatively higher management fees.
The segment saw significant reduction in net losses to QR90mn in 2022 from QR201mn in 2021, due to growth in segmental revenue, but partially offset by higher operating cost.
The aviation sector’s revenue grew 27% to QR915mn in 2022, on higher flying activity within domestic and international operations, coupled with growth in revenue across all the operations, including MRO business and international locations, especially Turkiye and Angola. The segment saw the highest net profit of QR310mn, a 40% increase on an annualised basis.
Revenue within the insurance shrank 9% to QR898mn, mainly linked to loss of two insurance contracts within the medical line of business, since the start of current year. The decline was partially offset by growth in premiums from the general insurance line of business, on account of renewals of existing contracts with wider coverage and scope. Nevertheless, net earnings rose 18% to QR71mn, supported by an overall 37% decline in claims.
The catering segment reported a 57% jump in revenue to QR568mn, driven by the growth within the manpower segment on the back of realisations from a new contract won during latter part of last year. Additionally, certain contracts were renewed within the manpower and catering segments with broader scope improving the overall service volumes for the segment.
The segment was back in black with it reporting a net profit of QR9mn in 2022 compared to a net loss of QR15mn in 2021, mainly due to higher revenues and better margins.
