Doha, Qatar: Gulf International Services (“GIS” or “the Group”; QE ticker: GISS), yesterday reported a net profit of QR281m for the six-month period ended 30 June 2023, with an earnings per share of QR0.151.
The debt restructuring deal with the lenders has been successfully concluded for GDI, pending further legal documentation. With a new long-term tenor of 25 years and a 35 percent balloon, the restructuring debt deal will enable GDI to gradually deleverage its financial position over the debt tenor.
Commenting on the restructuring, Gulf International Services Company said: “We are pleased that GDI has restructured its debt with its lenders, achieving one of its main capital strengthening priorities in a sustainable manner. This restructuring is expected to provide financial flexibility with an improved liquidity position and allow investment opportunities, along with an immediate realized savings on borrowing cost.”
The Company further added, “This demonstrates clear progress of our financial and operational turnaround objectives, including strengthening the Group’s balance sheet and accelerating our progress to maximize enterprise value. The company would like to thank all our stakeholders, each of whom have played an important role in this transaction.”
The drilling segment further reduced the losses experienced in the previous period by enhancing asset utilization and improving the performance of the joint venture with Seadrill. Additionally, during Q2-23, the onshore rig GDI-4 secured a contract with key client. The rig is scheduled to become operational in Q3-23.
Moreover, Al-Safliya lift boat was also awarded a new contract in Saudi Arabia, coupled with an improvement in the day rate. These new contracts will further enhance the company’s asset utilization and overall financial performance.
Moving forward, the company will diligently work to maintain an optimal utilization level, prioritizing safety and performance standards without any compromise.
Some of the Joint venture rigs have been successfully extended for a duration of 2 years, accompanied by major enhancements in the day rates. The new day rates will come into effect upon the conclusion of the current contract tenor of each rig.
The Aviation segment continued to experience enhanced business performance due to increased flying hours within both domestic and international operations. Also, contributions from the MRO segment continue to support the segment’s performance.
During Q2 2023, new medium-to-short term contracts have been awarded to cover diverse regions. The company have demonstrated its ability to establish and maintain a strong business relationship across multiple markets. This expansion will reinforce the aviation segment global reach and position Gulf Helicopters as a trusted partner in providing services in various countries.
The Insurance segment continued to achieve its primary objective of expanding its medical line of business and augmenting its market share by securing new medical contracts, resulting in enhanced premium growth. The performance of the segment’s investment portfolio remained wavered due to volatilities in capital markets.
Group’s revenue for the six-month period ended 30 June 2023 amounted to QR1.7bn, an increase of 17 percent compared to the same period of last year. Revenue growth from the aviation, drilling and insurance segments led to an overall increase in the Group revenue.
Catering revenue of QR216m is presented separately as part of discontinued operations per IFRS 5 requirements.
Group reported an EBITDA of QR 581m and recorded a net profit of QR281m for the six-month period ended 30 June 2023.
The growth in Group revenues and hyperinflationary accounting in one of the overseas operations led to an overall increase in net earnings. On the other hand, the Group’s direct costs increased by 9 percent, mainly linked to inclined commercial activity.
1H-23 Group’s finance cost increased by 93 percent to reach QR132m, against a backdrop of higher interest rates and one-off loan amortization cost.
Net profit for Q2-23 increased by 112 percent compared to Q1-23. Notable growth in Group’s net profit was mainly supported by the growth in bottom-line profitability from the aviation and drilling segments.
Group’s total assets remained flat and stood at QR10bn as at 30 June 2023 compared to previous year. Additionally, cash and short-term investments declined by 2 percent to reach QR1.12bn as of June 30 2023, compared to December 31, 20
The recently concluded debt restructuring is expected to facilitate a gradual deleveraging, resulting in lower borrowing costs.
This pivotal achievement in restructuring plays a significant role in realizing GIS’ overall strategic repositioning and lays solid foundations for the Group’s continued growth and prosperity.
The drilling segment reported a revenue of QR666m for the six months ended 30 June 2023, up by 5 percent compared to 1H-22.
Revenue growth has been linked to new rig day rates implemented for one of the offshore rigs and higher utilization within the onshore fleet due to the deployment of GDI-8, which was off-contract during the previous year.
The Aviation segment reported a total revenue of QR498m for the six-month period ended 30 June 2023, reflecting a notable growth of 13 percent when compared to the corresponding period of the previous year.
This increase is attributed to increased flying activity observed in both the domestic and international operations. In terms of flying hours, the total flying hours experienced a year-on-year growth of 29 percent, the domestic operation witnessed an increase of 17 percent, while international operation witnessed strong increase of 76 percent.
The international segment predominantly driven by the Turkish subsidiary, which benefited from increased flying activities and greater number of aircrafts, as well as augmented flying hours in Angola and Libya operations.
Revenue within the insurance segment for the six-month period ended 30 June 2023 increased by 34 percent compared to 1H-22, reaching QR548m.
The increase in revenue was mainly linked to winning new contracts within the medical line of business and the growth in premiums from the general line of business.
GIS will host an IR earnings call with investors to discuss its financial results, business outlook and other matters on Thursday, 17th August 2023, at 1:30 p.m. Doha time.
The IR presentation accompanying the conference call will be posted on the ‘financial information’ page within the GIS website Investor Relations section.
