DOHA: Gulf International Services (GIS), the largest services group in Qatar, recorded a net profit of QR1.4bn for the full-year 2014, an increase of QR0.7bn, or 108.3 percent, on a year-on-year basis. The improvement in net profit was driven by the ambitious growth plans across all segments, especially in the drilling segment.
The group’s revenue for the 12 months ended December, 2014 touched QR3.9bn, representing a significant increase of QR1.6bn, or 69.7 percent, over the same period last year. However, on like-for-like basis, management reporting revenue was QR4.3bn, an increase of QR1.0bn, or 32.4 percent, from a year ago.
The group’s share in revenue from Gulf Drilling International Company in 2014 was QR1.8 bn, a significant increase over 2013 of QR0.9bn, or 100 percent. This performance was driven largely by the offshore sector, which contributed over 80 percent of total revenue. The group also benefitted, in the third quarter of 2014, from favourable contract extensions for the onshore drilling rigs, GDI-1, GDI-2, GDI-3 and GDI-4.
Aviation segmental revenue increased by a moderate QR25.7m, or 4.2 percent, to total QR644.2m. The insurance subsidiary registered gross insurance revenue for the financial year ended December 31, 2014 of QR735.5m, a commendable QR28.5m, or 4 percent, 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 17.6 percent and now constitutes approximately 42 percent of Al Koot’s annual revenue. Results in the core energy line shrunk by a minimal 3.5 percent, in line with a softening of global insurance rates.
AMWAJ Catering Services Ltd contributed QR1.1bn to group revenue, and now represents the second largest revenue segment. Compared to last year, the company grew by QR118.6m, or 12.1 percent, due to the expansion of core industrial catering,and camp management services.
The favourable year-on-year positive net profit variance in the drilling segment of QR440.6m, or 179.1 percent, 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, Dukhan and Rumailah operations, and to higher daily rates received for the extension of four onshore rig contracts in the third quarter of 2014. For the eight-month period from the buyout to date, the additional shareholding in GDI has added QR0.2bn of incremental net profit to the group, and compares favourably to the QR0.6bn purchase consideration paid. This incremental profit represents an annual return on investment of circa 50 percent and allow GIS to recover its investment in almost two years.
Aviation segment earnings for the year ended December 31, 2014 were impacted by operating cost increases, as the subsidiary registered a modest QR6.8m reduction in year-on-year net profit to close at QR231.1m. Profit in the insurance segment for the financial year reached QR162.4m, a moderate increase of QR8.4m, or 5.5 percent, as strong medical revenue growth and gains on the company’s investment portfolio were partially offset by increased major insurance claims.
Net profit in the catering segment for 2014 was QR118.9m, up by QR56.4m, or 90.2 percent, as the subsidiary benefitted from its business expansion strategy, improved margins due to reduced operating costs and the provision of shut-down related services in the plants of clients.
The board of directors in their meeting held on January 7, 2015 proposed a total annual dividend distribution for the year ended December 31, 2014 of QR1bn, equivalent to a payout of QR5.50 per share, and representing 72.5 percent of the group’s net profit. This total dividend distribution equates to an increase of 243.7 percent versus the previous year’s dividend distribution, and is almost equal to the accumulated distributions of all previous years.