Gulf International Services, one of the largest service groups in Qatar, whose scope of work includes drilling services for the oil and gas sector, insurance, helicopter transportation and catering services, announced a net profit of 49 million Qatari riyals for the nine-month period ending on September 30, 2020, the group achieved success thanks to Its continuous efforts towards the strategic reorganization process since the last decline in the activities of the oil and gas sector, and it showed signs of early recovery from the beginning of 2019 until the first quarter of 2020. Despite this, and since the Coronavirus pandemic began to spread and with its entry into the second quarter of 2020 The group faced a number of macroeconomic challenges, as crude oil prices fell significantly and strict closure measures were imposed, which limited the level of economic activities in various global markets.
These adverse macroeconomic conditions increased competition in the market, affected the performance of the Group’s business activities, and imposed pressures on commercial prices as a result of the decline in operating levels. The drilling sector was the most affected sector, as intense competition regarding the operation of assets exacerbated the market conditions, and the activities of the drilling sector declined due to fluctuations in crude oil prices, with limited demand and low level of economic activities.
In the face of these market conditions, many companies have significantly curtailed their exploration and development activities, which has affected the demand for drilling services. Gulf Drilling International was not immune to these conditions facing the sector, as it witnessed a decline in its asset operating levels and its daily rates were re-priced to lower rates, which negatively affected revenue growth and margins.
However, despite the basic external factors beyond the group’s control, all sectors have made efforts to address these difficult circumstances and mitigate risks to business and operating activities so that they can achieve profits. The drilling sector continued its efforts towards cost rationalization in all possible areas of work, in order to achieve financial flexibility while ensuring that safety and performance standards were not compromised.
Among the major achievements of the drilling sector, the second drilling rig, West Castor, has been successfully commissioned as part of the joint venture operations, Gulf Drill, as it commenced operations in mid-August 2020, while the Luvanda drilling rig has already commenced operations as of From March 2020. It is expected that additional drilling rigs will start operating in various stages during the fourth quarter of 2020 and over the next year, which will provide opportunities for the sector to achieve strong growth in the future, and the aviation services sector witnessed a significant improvement in the level of financial performance. This performance has been enhanced compared to the same period last year by achieving significant growth in revenues, as the sector has maintained the level of its margins compared to the same period last year thanks to the suitability of its operational costs, and the insurance sector continued its efforts to increase insurance premiums, and succeeded in renewing additional contracts During this year at better prices.
Moreover, new clients have been added to the medical insurance segment since the beginning of the year, thus continuing to make progress in the sector in terms of increasing its market share in the medical insurance segment.
The catering sector succeeded in winning new contracts to provide catering and manpower services, as well as achieving higher occupancy levels in the camps. Commenting on the group’s financial and operational performance for the nine-month period of 2020, the company’s management stated the following: “Despite the adverse circumstances at the level of Macroeconomic, however, the Group has continued to reorganize its sectors through its commitment to increasing market share and focus on rationalizing its operating costs and ensuring that its assets are efficiently operated to lay strong foundations for growth.