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GDI's "hi-spec premium" jack-up rig "Al Khor." Gulf International Services' profit jump was jacked up by its drilling business.

Gulf International Services (GIS) has registered a robust 70% year-on-year jump in net profit to QR781.4mn in the first nine months of this year, mainly jacked up by its drilling business.

"This year-on-year improvement was driven by the ambitious growth plans across all segments, especially in the drilling segment (Gulf Drilling International, or GDI)," a GIS spokesman said.

The favourable year-on-year positive net profit variance in the drilling segment of QR 284.2mn, 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, however, impacted by operating cost increases, as the subsidiary registered a modest QR7.6mn reduction in year-on-year net profit to close at QR179.9mn.

Profit in the insurance segment reached QR90.2mn, an increase of QR12.6mn, 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 87mn, up 77%, 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 the clients.

GIS group revenue grew 60% to QR2.7bn; however, on a like-for-like basis, management reporting revenue - assuming proportionate consolidation - was QR3.1bn, an increase of 32%, versus the same period of 2013.

The group's share in revenue from GDI for the first nine months of 2014 was QR1.2bn, a significant year-on-year increase of 97%. This 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 segment revenue rose by a moderate 4% to QR479.5mn as there was an increase in the number of helicopters in the fleet and the success of Gulf Helicopters' proactive business development strategy, which resulted in operations in several new territories; but were mitigated by the end of its long-term relationship with the National Health Authority for providing helicopter emergency medical service.

The group's insurance subsidiary reported 6% rise in gross insurance revenue to QR547.7mn and the main contributor was the medical line of business, which reported a year-on-year increase of 21% and now constitutes about 43% of Al Koot's annual revenue. Results in the core energy line shrank by a minimal 3%, in line with Qatar Petroleum's reduced capital expenditure activity.

Amwaj Catering Services contributed QR815.3mn to group revenue, representing the second largest segment of group revenue. Compared to last year, the segment revenue improved 14%, due to the expansion of the core industrial catering and manpower contracting services.

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Publication:Gulf Times (Doha, Qatar)
Date:Oct 20, 2014
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