Gulf International Services Q.P.S.C. (GISS) Earnings Call Transcript & Summary

Hello, and welcome to the Gulf International Services conference call. I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Mr. Bobby Sarkar to begin the conference. Bobby, over to you.

Thank you, operator. Hi. Good afternoon, everyone. This is Bobby Sarkar, Head of Research at QNB Financial Services. I wanted to welcome everyone to Gulf International Services Fourth Quarter and Year-End 2023 Results Conference Call. So on this call from QatarEnergy's Privatized Companies Affairs Group, we have Abdulla Al-Hay, who is the Manager for Privatized Companies Affairs; we have Sami Mathlouthi, who's Assistant Manager in Financial Operations; we have [Saud Abdul Ghani] , who is the senior financial management analyst; and we have Rashid Al-Mohannadi, who's the Head of IR and Communications. So we will conduct this conference with first management reviewing the company's results followed by Q&A. I would like to now turn the call over to Rashid. Rashid, please go ahead.

Thank you, Bobby. Good afternoon, and thank you all for joining us. Before we go into the business and performance updates of GIS, I would like to mention that this call is purely for the investors of GIS and no media representatives should be attending this call. Moreover, please note this call is subject to GIS disclaimer statements as detailed on Slide #2 of the IR deck. Moving on to the call, on Wednesday, 14th of February 2024, GIS published its results for the year ended 31st December, 2023. And today, in this call, we'll go through these results and provide you an update on key financial and operational highlights. Today on this call, along with me, I have Mr. Abdulla Yaqoob Al-Hay, Manager of our Privatized Company Affairs. I have Mr. Sami Mathlouthi, Assistant Manager in Financial Operations and I have Mr. [ Saud Abdul Ghani ], Senior Financial Management analyst. We have structured our call as follows: at first, I will provide you with a quick insight on GIS ownership structure, competitive advantages, and overall governance structure by covering Slides 6 till 8 and Slide 29 and 30 of the IR deck. Secondly, Sami will take you into the GIS key operational financial performance [ of business ]. And lastly, I will provide you with segmented performance and review. And finally, we'll open the floor for the Q&A. To start with, as detailed on Slide #6 of the IR deck, the ownership structure of GIS compromises of QatarEnergy with 10% stake being the parent shareholder, whereas the GRSI with 22% stake is the largest shareholder. As detailed on Slide #5 of the IR deck, QatarEnergy provides most of the head office functions through a service level agreement. The operation of GIS subsidiaries are independently marked by their respective Board of Directors, along with senior management team. The BOD structure details can be found on Slide #7 of the IR deck. In terms of the competitive advantages, as detailed on Slide #8 of the IR deck, all of GIS group competitors are strategically placed having a significant market share in their prospective business sectors within Qatar. For example, drilling business is the only Qatari onshore drilling service provider and have more than 50% market share in the offshore drilling service in Qatar. Similarly, the aviation business of GRS is the sole provider of helicopter services and Qatar oil and gas service sector and being one of the largest operator of the MENA region. In terms of the insurance business, it's one of the leading medical insurance providers in Qatar. For the catering the merger of AMWAJ has established a permanent local champion in the catering services. All of this is supported by an experienced senior management having expertise in relevant business segments. In terms of the governance structure of GIS, you may refer to Slide 29 and 30 of the IR deck, which covers various aspects of the GIS code of corporate governance in detail. I will now hand over to Sami.

Thank you, Rashid. We are pleased to announce that the group revenue for the year ended 31st of December 2023 amounted to QR 3.5 billion with an increase of 17% compared to last year. Revenue growth from aviation, drilling and insurance segments led to an overall increase in the group revenue. The group reported an EBITDA of QR 898 million and recorded a net profit of QR 392 million for the year ended 31st of December 2023. Growth in the group revenue coupled with the increase in finance income contributed positively to the group profitability. However, the group results were partially impacted by net monetary losses arising from the accounting impact of hyperinflation from [indiscernible] Turkish subsidiaries. On the other hand, the group direct cost increased by 19%, mainly linked to increased commercial activity. Moreover, performance of the insurance segment, the investment portfolio witnessed a recovery compared to the previous year and an increase of QR 55 million was noted on account of investment income compared to last year. This increase was mainly linked to unrealized gains on revaluation of held-for-trading investment securities and higher finance income supported by higher interest rates. In light of the positive net profit results and after the board consideration of operating, investing and financing needs of the group businesses, we are pleased to announce the Board recommendation to distribute dividend for the year 2023, equating to payout of QR 0.15 per share, representing a payout of 71% for the year 2023 net earnings. The dividend recommendation will be subject to AGM approval on 10th March 2024. Now we can move to the quarter-over-quarter comparison. Revenue for Q4 2023 decreased marginally by 1% compared to Q3 2023, mainly on account of lower revenue reported from the Aviation segment due to lower revenue from the international and MRO segment. This was partially offset by higher revenue growth from the Drilling segment due to higher asset utilization and higher revenue from the insurance segment, supported by new contracts added during the quarter. Net loss reported during Q4 2023 of QR 23 million with a reduction of 117% compared to the previous quarter. This reduction in the group net profit was mainly attributed to lower profitability from the Aviation segment due to reduction in revenue, increase in G&A expenses and net monetary losses arising from the accounting impact of hyperinflation from [indiscernible] Turkish subsidiary amounting to QR 40 million in Q4 2023. Whilst the drilling segment reported higher losses compared to the previous quarter, mainly due to higher G&A expenses duly relating to accounting treatment in addition to higher finance costs due to one-off upfront fees relating to the debt restructure and lower [indiscernible] profit from joint venture. Moreover, loss of QR 27 million was reported as a result of disposal of [AMWAJ] subsidiaries. Now I hand over to Rashid to cover the segmental results.

Thank you, Sami. We can now move into the segmental review and start with the Drilling segment. As detailed on Slide #17, the drilling segment reported a revenue of QR [ 1.3 ] billion for the year ended 31st December 2023, up by 3% compared to last year. The revenue growth was mainly driven by higher asset utilization in the [commercial] segment due to deployment of GDI-8, which was off contract during the previous year and the commencement operation of GDI-4 during the late Q3 of this year, which also contributed positively to the revenue growth. Within the offshore segment, the revenue increase was supported by improved utilization from Al-Wajba, this was partially offset by lower revenue from the[ left port ] and border segment due to remain going off contract during the first half of the year. However, the lift boat [indiscernible] was contracted with a new client expected to commence operation during the first quarter 2024. The segment reported a net loss of QR [ 358 ] million for the year ended 31st December 2023 compared to the net loss of QR 90 million for last year. Significant reduction in net loss was primarily driven by growth in segmented revenue and improved financial performance from the joint venture with Seadrill. However, the increased finance costs resulting from higher interest rate prior to the loan structure in addition to one-off upfront fee related to the debt restructuring and partially offset these gains. On a quarter-on-quarter basis, the company reported a net loss of QR 14 million compared to a net loss of QR 2 million in the previous quarter. Higher loss reported was mainly due to the higher G&A expenses purely related to the year-end provision and increased staff costs in addition to higher finance costs as a result of one-off upfront fee related to the debt structure. Moreover, the joint -- the share of profit from the joint venture with Seadrill experienced a reduction due to the amortization of maintenance cost over the remaining term of the extended agreement. Overall, the result was partially offset by improved revenue compared to the previous quarter due to two offshore rigs coming to operation after undertaking a planned maintenance during Q3 of 2023. Moreover, GDI-4 for revenue realization during the current quarter commenced operation during later part of third quarter of 2023. Now we can move to the Aviation segment, as detailed on Slide #20. The Aviation segment recorded a total revenue of QR 1 billion for the year ended 31st December 2023, marking a notable increase of 13% compared to the corresponding period in the previous year. The growth in revenue can be driven to -- or can be primarily attributed to the increased flying operation, both domestically and internationally as demonstrated on Slide 21. Furthermore, the growth was observed in maintenance, repair and overhaul business segment, which contributed positively to the overall increase. Significant revenue expansion also occurred in international location in Turkish and Angola being particularly halted for their substantial contribution to the positive financial performance. During the period, the Aviation segment achieved a net profit of QR 343 million, marking a marginal increase of 10% compared to the preceding period and previous year and also marketing this year as the best year in GHC history. This increase in profit can be largely attributed to the revenue expansion, coupled with higher finance income and lower losses reported a revaluation of foreign currency exchanges. Bottom line profitability was mainly impacted by the net monetary losses arising from accounting impact of hyperinflation from Gulf Helicopter and Turkish subsidiary as compared to the positive impact on the previous year. Moving into the quarter-over-quarter, the segment revenue for Q3 2023 versus the previous quarter decreased by 21%, mainly driven by lower revenue from International segment and in particular, Turkey and Libya. Moreover, the MRO segment also experienced a reduction in revenue as compared to the previous quarter. Q4 profitability decreased by 96% compared to the previous quarter, mainly impacted by the revenue reduction, higher G&A expenses and net material losses amounting to QR 40 million recorded in the current quarter. This is arising from the accounting impact of the hyperinflation in Turkey. And now we can conclude the segmental review of the insurance segment, as detailed on Slide 23 of the IR deck. The revenue within the insurance segment for the year ended 31st December 2023, increased by 33% as compared to the previous year, to reach QR 1.2 billion. The notable increase in revenue was mainly linked to the acquisition of the new contracts in the medical line of business and the expansion of premiums in the general line of business. Similarly, the net earnings for the segment experienced a substantial increase of 52% compared to the last year, the reaching QR 103 million for the fiscal year ended 31st December 2023. The significant growth in bottom line profitability can be attributed to the augmented revenue stream, coupled with the robust investment income. The recovery of the unrealized losses and gains recorded in the revaluation of the held for trade investment securities in addition to the higher finance income, delivering the fixed deposit further contributed to the overall increase in the investment income. On a quarter-over-quarter basis, the segment revenue for Q4 increased by 4% due to the new contract from the medical business. However, the segmental profitability for Q4 declined marginally by 14% due to the higher net claims supported compared to the previous quarter. I think that concludes our presentation. And now we can open the floor for the Q&A.

[Operator Instructions] Our first question comes from the line of Nafez Alabbas from Ajeej Capital.

Congralutions on the results. My first question comes on the margins of the drilling entity on the quarterly basis. I understand you mentioned a number of one-offs. But I mean, going forward, what should we expect? Should we take Q4 as, let's say, the benchmark or should we expect some of these one-offs not to occur again, like for example, if you can again explain the reason for the higher G&A expenses. I mean I understand you mentioned provisions but should we expect the same level of provisions going forward? Or do you think it was just because of the end of the year and then it will normalize lower? I mean we just want to better understand where the margins for the company are going.

Thank you for the question. I think in terms of margins, we cannot take Q4 as a reference for the future because, as you know, end of year, you will have for accounting reason, you'll have a lot of adjustment that needs to be performed. For example, you are expecting some accruals that you will do during the year. But then at the end of the year, you have the real cost that will be paid, for example, like bonus for employees, you will adjust that. The same thing, there are some activities at accounting level like inventory stock takes, like provision that you have taken. But during 31st of December after you make the stock trade, you will make some adjustment to the consumption of spare parts that we have used during the process. These are like more one-off, but you will see them very often at Q4 for most of the companies. That's one of the reasons for this change in some of the accruals that we have made for GDI. Same thing in the specific quarter, you will see that there is an allocation of specific fees relating to the interest rate. So as you know, so we have done the [indiscernible] for the interest. And one of the loans has been restricted again in line with the previous one that we have already announced, starting from 14th of March. And for that, we have a one-off fees. We're selling to management fees for that specific loan that we have to book in Q4, and this will not be repetitive and it will not be affected in the next quarter. In addition to that, we have the share of profit from the joint venture that we have with Seadrill. We have a portion of the costs that are relating to the maintenance of two of the offshore rigs at that time. They have been allocated for Q4 as well. So I think this is a combination of many effects. Some of them will be repetitive for the next quarters, but most of them, they will not be repetitive for the next quarter.

I see. Thank you very much for that. But I mean, just as a reference, is there, let's say, if we take all of these out, what should we expect the margin to be -- I mean a rough estimate would be useful. And my last question, if you allow me, Seadrill was putting these rigs that are in the joint venture on held for sale since their first half results. Is there any update on the negotiations there? Is there a potential for you guys to absorb them? What is the outlook there?

I will start with the second question, then I will come back to your first question. Regarding Seadrill, I think this has been already known. It has been communicated to the market since May, I think 2023. So far, there is no transaction that has been taking place. Internally, yes, we will be discussing with Seadrill, they are our partner. And these are like more commercial discussions at this stage, we cannot disclose the content of these discussions. But we are discussing and we will disclose this to the market whenever we reach an agreement with our partners on the way forward or if there is another partner will take part of these rigs. We will disclose that to the market either from our side and from the Seadrill side as well. Regarding your first question in terms of the margin, we don't give expectation in terms of future margins. But what we can say, if you eliminate the impact of the interest rate, that will be different compared to what we have seen in 2023, you will have some kind of clarity on what will be the margin in the future. But as you can see, if you look at the other impacts in terms of free cash flow, in terms of the EBITDA margin that the company is doing, I think it's all in a positive level.

Our next question comes from the line of Lee Beswick of QNB.

Can you tell me the renewal schedule for rigs, please? When the contracts are due for renewal?

One offshore rig is due for renewal end of December 2024. And we have four onshore rigs, which are due for renewal during 2024. Some of them end of the year and some of them during the middle of the year. But we have only one offshore rig and four onshore rigs.

So one offshore and four onshore. Is that?

Yes.

In 2024, Okay. And is it 2025?

2025, we have, I think we have three offshore rigs coming in 2025 and the remaining renewals will be 2026 and 2027.

Our next question comes from the line of Mark [ Congress ] of TFI.

Yes, I just wanted to understand better the fall in Q4 in the Aviation segment. The profit in the previous year was QR 111 million in this quarter, it was only QR [ 4 million]. And you explained QR 40 million was because of hyperinflation accounting. Given that the flying hours were actually up, could you just elaborate on why the margins were so much -- QR 67 million lower?

I think -- okay. Thank you for the question. I think we have highlighted in the press release as well, the impact in the helicopter services. The main impact is from the application of [IAS 29] which is related to the hyperinflation. Can you hear me?

We can, the interference is coming from Mark [ Congress' ] line. I've just temporarily muted it.

Okay. That's fine. So since May 2022, so the Turkish economy has been under the hyperinflation application of [ IAS 29 ] due to having 3 years of consecutive devaluation of the Turkish Lira. So today, at the end of each quarter, we need to make the calculation of the IAS 29. And this hyperinflation, it's out of our control, and it's based on the level of your assets and your profit and loss items at the end of each quarter. So based on that, we evaluate the impact of the decline in the Turkish Lira and to be impacted in the translation of the financial statement of the Turkish subsidiaries. The impact for this quarter is QR 40 million, and this is mainly due to the change in the estimation on the way how we calculate the impact of IAS 29 in two main components. The first one is the share capital. So the initial estimation that we are making but we calculate the impact of hyperinflation based on taking the consumer index at the closing period, which is 31st of December 2023 compared to the prior period. So after a discussion with the auditors of the discussion was international expense. We changed the estimation, and this will be calculated based on the index on 31 December 2023 against the full impact starting, for example, in the share capital from 2014. And that made a huge difference in terms of the way how we calculate the impact of IAS 29 in Q4 compared to what we have done in Q3. So if I give you just an example, if you have used the same estimation that has been applied in Q3 2023, it will end up for the positive variance with more than QR 20 million. But now I think based on the -- this is a very specific challenge that we have and the application of the hyperinflation IAS 29 is very specific. It hasn't been applied in many countries. And even the auditors, they have to refer to international expertise, where now they are confirming the treatment compared to what has been reported previously. That's one of the impacts that I highlighted. The other impact is relating to increase in G&A expenses. One is relating to withholding taxes that we need to -- that we have new contracts, we need to disclose those contracts and we pay withholding tax on these contracts, that's another impact. The second impact that we have is reduction from the MRO business. And for this, the MRO business, it's mainly relating to the timing of disclosing some of the revenues. The service has been completed but the revenue cannot be recognized before you have the invoices and before you have the agreement on the invoices. And this will be done in Q4 2020 -- Q1 2024, and the other impact is coming from the reduction in revenue from the [red star business] in Turkey, which has been reduced by around QR 9 million. I think it's a combination of all of these together, have impacted the performance of the red star business in Turkey and hence, the performance of the Helicopter business in total.

Hello. I don't know if I'm still muted.

You are unmuted now, sir.

Okay. Can I just ask one more question? And that is on the -- on the ongoing finance cost. In Q3, your finance cost was somewhere -- interest payment cost was around QR 30 million but in Q4, it was QR 40 million. Where do you think the rate will settle for this upcoming year? And also will you benefit from rate cuts in the second half in terms of your interest payments, just trying to get an idea where they should stabilize.

I think you will see a stabilization during -- starting from Q1 2024. So 2023, it's not clear, I think, even for the shareholder, how to calculate the impact of the interest rate. So in 2023, we have in addition to the interest rate that we are paying on the loans. We have some one, of course, that we have to pay on the structure of those loans which are equal in total. So in addition to the unamortized finance cost to around $6.9 million -- so that's around, I would say, AR 25 million on top of the interest of the normal interest that we are paying on the loans. This one, of course, will not be seen during next year. And next year, we will have only the net impact relating to the restructured loans in itself only. So you will not see the impact of these one-off fees, that has been paid, and we will not have the unamortized finance cost that has been added to the loan itself. So you can expect from Q1 2024 to see more stabilization of interest, which I think it will have a great saving compared to 2023.

Our next question comes from the line of [ Anders Doses Baltics ] from Alpha Itel Investment.

So in regard to insurance, now your prepared remarks agree with your peer group effectively, the current situation is one of intense price competition, low margin. And I would like to ask what is the economic rationale of expanding further at this point of time, what exactly economic returns are you anticipating from these new contracts in insurance.

I think the insurance business in the term, it's fragmented in two main drivers. So first driver is the premium that you will collect from your customers. And the second driver will be what you will do with those money that we will collect. That's the investment part. So I think the way how you describe why you are growing this business, I think you need to have some understanding of how the insurance business will work. So I think in terms of Alkoot, they were able to increase and the level of revenue to around QR 1 billion to 2 billion during 2023. And this, I think, if you are following up the company during the last previous years, and we have announced that. We lost too many contracts with a total value of premium of around QR 250 million. And the company now even without those two big customers, Alkoot has been able to replace those two big contracts by many other different contracts which are smaller, but the strategy of the business is to work with more selective customers where it's not only the idea to bring the premiums, but to generate money from those kind of contracts. And this can be seen in the net profit that the company has been able to make. Today, we are increasing the net profit from Alkoot from QR 68 million to QR 103 million was an increase of around 52%, and that increase is coming from two again, from two main drivers. One is underwriting. And the second impact is coming from the investment and you can see the level of investment income we have made during this year. It's QR 55 million against only QR 2 million, I think we have done last year. So I think the business or the insurance segment in itself, I think, is growing. It's doing prudently, and it's trying to manage its loss ratio at the level which are much, much lower compared to what we have seen during the last previous years.

So if I have a quick follow-up, please. So according to regulatory requirements, I assume this return that you mentioned, is effectively returned from risk-free fixed income instrument, correct? So like government bond or -- so effectively, you are not allowed to go to take on risk. It has to be a risk-free instrument that gives you a return.

No, I think we need to be compliant to different kind of ratios. That's as per the regulator. So one of them is the solvency ratio. And then we don't have any obligation in terms of returns. So I think the company can make any returns if it want. As long as you are compliant with the KPIs that the QCB is putting in place.

Our next question comes from the line of [ Nikhil] [indiscernible] from CBFS.

I'll be coming back to your aviation business, which has remained your cash cow for 2023. Yes, I mean, it has been mentioned previously in your call right now in terms of in drop in international operations. But we also see a steep drop taking place in your domestic operations. Secondly, as the question earlier mentioned about flying hours increase and also an additional one aircraft being added in Q4 -- still, what we see is that the rate of, you can say, per aircraft revenue is quite low. It's come quite low. And you mentioned about some contracts getting renegotiated. So I wanted to understand what are these contracts? How -- what has been the total share of your total revenues in the aviation, which has got renegotiated? That is one. Again, secondly, again, related to the Aviation, there is your bell series aircraft, which you have been amortizing over a period of time and which still carries around QR 20 million on your books. So could we see further impairment coming up in 2024?

I will start with the first question. So I think in terms of aviation, I think looking only at Q4, I think it's not -- I will not give you the right idea about the helicopter business because if you look at plus, the business has been able to grow its revenue. The business has been able to grow its net profit. Today, Gulf Helicopter have registered the highest net profit in slides since interruption. These are -- I think we need to look at these two aspects as well. So the business is growing. In terms of the renewal of the contract, I think we are in discussion with the customers who are renewing the contracts. I think we don't have any issue in terms of the renewal of the contract and then the rates, I think there is no issue with that. And if you look as well at the growth of the business in the third, the MRO business has been extremely doing well. But the Q4 will not give you a good idea about the performance of that specific business. So today, if you look at the MRO, the MRO has increased in terms of revenue for the matter down QR 23 million and today, it's making QR 241 million. The business is making great net profit as well. So the business, the MRO is contributing by QR 54 million. So in terms of our strategy, I think we are applying a diversified strategy where not all the revenues and the net profits are coming from only [indiscernible], so we are trying to spread as well the revenue and the generation of profits. And in our business, we are generating revenue and net profits from Qatar. And Qatar is not the only region where we are making profit from that. So from Doha, for example, you will see that the flaring hours has been increasing. And the same thing you can see. So flank hours in Doha is increasing by 14% from international locations, it's increasing by almost 20%. So I think in terms of, the business is diversified, the business is well protected, I think, against any additional risks or against economic risks from having concentration in one -- from one specific location. And I think it's much better not to look only at Q4 as a reference, but look at our performance for the whole year 2023. So that's in terms of the business from Qatar and from outside. In terms of next question, what is exactly the second question? The impairment of that aircraft, yes. So the total impairment that we have today, it's around QR 20 million. During this year, we had made another QR 8 million of impairment. So we have to talk about the impairment of those aircrafts. But you will see as well that during this year, we have sold two bad aircrafts during this year. The value which is much higher than the net book value of those two aircrafts. So as a management, we are working together, making sure that we have a plan. So these bad aircrafts are on sale. Some of them are on sale, some of them are used for spare parts as well. But whenever we have some aircraft, so we will make sure that when we sell them, we sell them at a place which is much higher than the net book value that it has and that the impact is not a use that will be taken in any year. So I think if you turn back in 2020, we have made an impairment of around QR 85 million for all the bad aircrafts that we have. But I don't think -- I think we have taken the big hit during this year 2020. But I think going forward, we will not see like the huge impact, so maybe QR 4 million to QR 5 million will be taken during this specific year, but it will not be impacting the performance of the company in itself.

Okay. Regarding your drilling segment, I mean you did mention the increasing provisions and also related to your staff cost. Just wanted to understand, I mean, just looking at the segmental retail, it looks like you mentioned about staff cost also including bonuses, which was given in fourth quarter. Am I right in that? So is that one-off which we could be seeing, which is not what to be seeing again in the first quarter? I mean the large increases took place?

I think we have mentioned for the Drilling segment, it's a combination of three main reasons. First one is G&A. So one of them is the provision for the staff bonus. So as you know, it's depending on the performance of the company, depending on the decision of the board. Sometimes you make some provision, for example, you are paying one month bonus, but at the end of the day, you decided to pay 0.5 or you decide to pay 1.5. At the end of the year, once the decision has been taken. So basically, you will adjust the accrual that we have made during the year. That's one of the things that we have, this will not be seen during the 3 first quarter of 2024. But in the fourth quarter, you will need to make that correct. The second thing, it could be relating to, as I said in the beginning, inventory accounting. So sometimes you will have some differences that you will need to book and as correction for the consumption of spare parts or consumption of consumables that you will need to take into consideration as well. We have seen as well the impact of the upfront fee relating to the restructuring of one of the loans, and that's amounting to around USD 1.6 million. In the first -- in the third quarter, we have made one relating to the first one. That's around USD 4.5 million. And during this quarter, we have booked another upfront fees regarding to the second loan that you will not see in the next year. And the last one is relating to the joint venture. So some of the maintenance that has been taken, but we have before the renewal of the agreements for the joint ventures -- there were some SPS, it's called like turnarounds for the factories. So we need to make a long-term maintenance, it takes 30 to 45 days. That has been done during Q3. But some of the costs relating to this maintenance will be depreciated or will be amortized over the period of the next agreement, and this has been taken place for Q3 and Q4 altogether in Q4. So basically, Q4 has taken part of the expenses that should have been recognized in Q3 but since the work has not been completed in Q3, you will need to make the full amortization in Q4. I think these are the main reasons for, I think this decline in profitability for Q4 2023 for the drilling segment.

Okay. One last question, if I may ask. I mean, this has got to do with your the newly formed joint venture. And then just given on the books in terms of your [indiscernible] I can understand for 9 months, share of profit of joint ventures was at around QR 23.6 million, which increased to QR 24.8 million. So am I right in understanding that the increase was around QR 1.2 million in the fourth quarter? Hello? Hello? [ Technical Difficulty ]

Hi team, your line is open. Please respond to the audience member's question. Mr. Rashid Hamad Al-Mohannadi, are you still on the line with us? Ladies and gentlemen, we apologize for the pause in today's presentation. Please remain on the line while we try to reestablish connection with the speakers. Ladies and gentlemen, please stand by once we reestablish the connection with the speakers. Once again, thank you for holding.

Hello?

Ladies and gentlemen, we apologize for the pause in today's presentation. We now have our presenters back with us. Please continue.

I apologize for the disconnect. Nikhil, can you repeat your question? I think we got disconnected in the middle of your question.

Mr. Nikhil [indiscernible] from CBFS. Your line is open if you're still connected.

Okay. Let's move on to the next question, if you have any.

We have no further questions at this time. I'll now hand the call back to Mr. Bobby Sarkar.

Okay. Great. Thank you, operator. If this is -- if we don't have any further questions, we can end the call for today. I want to thank Abdulla, Sami, Rashid and Saud for taking the time to answer our questions, and we will pick this up again next quarter. Thank you very much, guys.

Thank you. This concludes today's conference call. You may now disconnect.