Gulf International Services (GIS) is expected to witness acceleration in momentum in the drilling segment in 2022 and onward, QNB Financial Services (QNBFS) has said in a company report released on Sunday.
“We expect earnings to continue to improve in 2022 with the drilling segment achieving profitability or near-profitability,” QNBFS said.
“We stay longer-term positive on GIS. Despite lacking a dividend-related catalyst that generally benefits Qatari companies, we expect improving financial performance to drive stock price performance over the next 12 months.
“Moreover, we continue to believe the progress made in costs reduction thus far should dovetail recovery in market fundamentals as we move forward. Favourable updates on debt restructuring, which was put on the back burner due to COVID-19, could also please equity investors,” it said.
The report said, “Overall revenue of QR844.4 million in the fourth quarter of 2021 was in-line with our estimate of QR814.4 million. Drilling revenue of QR303.6mn was higher than our estimate of QR276 million.
“As expected, the significant top-line growth was driven by new higher day rates becoming effective for the seven offshore rigs from July 2021, along with the resumption of two onshore rigs that had been idling for a year due to COVID-19 from the third quarter of 2021. Moreover, all five offshore rigs are operating under the GulfDrill JV in the NFE project from the third quarter of 2021 onward.”