(The Group’s Comments) Gulf International Recorded Net Loss of QR 98.27 Million in 2018

Ø  Profit: Gulf International Services Co. turned a loss in the last quarter of 2018 of about QR 98.27 million, compared to a profit of about QR 84.98 million in the same period of 2017, noting that the results of the company end of September 2018 showed profits of QR 39.46 million, but the fourth quarter of 2018 witnessed a loss of about QR 137.7 million. The reasons for this loss can be explained by the following:

1.      Operating costs are higher than sales, especially the costs associated with insurance and reinsurance activity as well as the aviation activity.

2.      Losses from the reevaluation of some excavators of QR 113.2 million and the write-offs of equipment at about QR 36 million.

3.      The cost of financing increased by QR 53 million due to higher interest rates.

Ø  Comprehensive income: The total comprehensive income amounted to QR 115.79 million in the last quarter of 2018, but the company recorded losses of investment valuation of QR6.0 million and foreign exchange losses of QR11.5 million.

Ø  Revenue: Although the company recorded a loss for 2018, its revenues increased by 4.8% to reach QR 2,519 million, compared to QR 2,403 million by the end of 2017. Revenues were generated from several sources, including drilling (45% of total revenues), aviation services (22%), catering (16%) and insurance and reinsurance activities (17%). Despite higher revenues as mentioned above, higher expenses resulting from revaluation losses led to a loss in the last quarter of 2018.

Ø  Assets: amounted to QR 10,157 million by the end of 2018, compared to QR 10,428 million at the end of 2017, a decrease of 2.6% due to the write-offs and write-down of certain property and equipment, as well as the impairment of financial investments as a result of the company's adoption of IFRS 9.

Ø  Market ratios: The Company’s PE Ratio is negative, while the book value is at a multiple of 0.78 times.