Gulf International Services Q.P.S.C. (GISS) Q4 FY2025 Earnings Call Transcript & Summary

Hello, everyone. Welcome to Gulf International Services Company Conference Call. Please note that this call is being recorded. I'd now like to hand the call over to Bobby Sarkar from QNB.

Thank you, Eli. Hi, hello. 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 2025 Results Conference Call. So on this from QatarEnergy's Privatized Companies Affairs Group, we have Abdulla Al-Hay, who is the Manager of Privatized Companies Affairs. We have Sami Mathlouthi, who's Assistant Manager and Financial Operations; and Rashid Al-Mohannadi, who's the Head of IR and Communications. So we will conduct this conference with management first reviewing the company's results followed by a Q&A. I would now like to turn over the call 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 DIS, I would like to mention that this call is subject to the disclaimer on the Slide #2, and no media representatives should be attending this call. Moreover, we will move right now to the results. On Tuesday, 3rd of February 2026, GIS published its results for the year ended 31st December 2025, and today in this call, we'll go through these results and provide you on an update on key financial and operational highlights. Today on this call, along with me, I have Mr. Abdulla Al-Hay, Manager of Privatized Company Affairs; Mr. Sami Mathlouthi, Assistant Manager for the Financial Operation. We have structured our call as follows. At first, I'll provide you with a quick insight into the ownership structure of GIS, its competitive advantage, and overall government structure by covering Slides 6 till 8 and Slide 28 and 29 of the IR deck. Secondly, Sami will brief you about the latest business update and dividend proposal. Then Sami will take you into the GIS key financial and operational performance matrices. Later, I will provide you with segmented performance update 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, whereby GRSIA has 21.9% stake and is considered to be the largest shareholder. As detailed on Slide #5, QatarEnergy provides most of the head office functions through a service level agreement. The operation of GIS subsidiaries are independently managed by their respective Board of Directors, along the senior management team. The BOD structure is detailed on Slide #7 of the IR deck. In terms of the competitive advantages, as detailed on Slide 8, all of GIS group companies are strategically placed, having a significant market share in their respective business sector within Qatar. For example, the drilling business is holding the majority of market share in the offshore drilling in Qatar. Similarly, the aviation business of GIS is the sole provider for helicopter services in Qatar Oil and Gas sector, and being one of the largest operator on the MENA region. In terms of the insurance business, it is one of the leading medical insurance provider in Qatar. For catering, the transaction of Amwaj with Shaqab and Atyab has established a local champion in the catering services. All of this is supported by experienced senior leadership, having expertise in their relevant business segment. In terms of the governance structure of GIS, you may refer to Slide 28, 29 of the IR deck, which covers various aspects of GIS code of corporate governance in details. I will now hand over to Sami.

Thank you, Rashid. GIS delivered strong financial performance for the year 2025, supported by group-wide strategic initiatives and operational enhancement across key segments. Notable achievement, included disciplined execution of growth initiatives in drilling, aviation and insurance have strengthened the long-term earning visibility and operational resilience. The Drilling segment delivered steady performance, supported by the full contribution, full year contribution of the 3 previously acquired Jackups and continued progress on strategic contract awards. Key milestones included securing the contract for 2 new oil service lift boats, scheduled to commence operation in 2027, alongside multiple offshore contract renewals and the expansions that enhanced medium- to long-term utilizations. Onshore operations remained disciplined with completed contracts under evaluation for the deployment in line with market conditions. The Aviation segment maintained strong momentum through domestic contract renewals and international expansion, including aircraft mobilization to Libya and a new multiyear government contract in Kuwait. Fleet modernization advanced meaningfully during the year with 6 out of 10 AW139 helicopters delivered under the existing renewal program. In addition, 5 new AW139 helicopters were secured with delivery expected in 2027, 2028, alongside the acquisition of two AW189 helicopters scheduled for delivery in third quarter 2027, strengthening offshore and multi-mission capabilities. The insurance segment delivered solid performance driven by growth in medical and general insurance disciplined underwriting and resilient investment returns. Al-Koot maintained its A- S&P credit rating and continued progressing towards its planned Qatar Stock Exchange listing representing a key strategic milestone to unlock shareholder value. In light of the group's full year performance, the Board of Directors has proposed a cash dividend of QAR 0.1 per share. This proposal reflects the Board's confidence in GIS underlying financial strength while carefully balancing the group growth ambition, capital investment requirements and ongoing obligation to sell existing debt, ensuring a prudent and sustainable capital allocation approach. Now we can move to the performance overview. GIS has reported results for the year ended 31st of December 2025, with a net profit of QAR 678 million, marginally down against last year. We also reported earnings of QAR 0.365 per share compared to QAR 0.383 per share in the last year. Key drivers of this growth included the full consolidation of Gulf Drilling and Gulf Jackup from 25th of June 2024, improving overall drilling contribution, higher MRO revenue, and flying hours in aviation for offshore operation and the increased insurance premium, supported by new medical contracts. As a result, the group achieved an EBITDA of QAR 1.5 billion for 2025, representing a 9% increase compared to QAR 1.4 billion in last year. This strong performance was primarily driven by robust revenue growth across core business segments. On a quarter-on-quarter basis, revenue for Q4 2025 was lower than the previous quarter. This growth was mainly driven by lower revenue performance across drilling and aviation. Drilling witnessed a reduction in revenue during the current quarter, mainly due to lower asset utilization as 2 onshore rigs and 1 offshore rig went off contract during the end of the previous quarter, while another offshore rig conducted a planned maintenance in the current quarter. Moreover, the Aviation segment experienced a reduction in revenue in the current quarter due to lower revenue experienced from the MRO segment. Net profit for Q4 2025 decreased compared to the previous quarter. This reduction was mainly driven by overall reduction in revenue in addition to higher general and administrative expenses from the Drilling segment and lower investment income from the insurance segment due to unfavorable movement in investment portfolio. As of 31st of December 2025, the group maintained a solid financial position with total assets of QAR 11.6 billion, total debt slightly declined to QAR 5.4 billion, primarily due to partial repayment of existing loan facilities within the drilling segment. Now I will hand over to Rashid.

Thank you, Sami. Let's proceed with the segment review dealing with the Drilling segment. The Drilling segment delivered 9% revenue growth in 2025, driven by a strong offshore performance, following the acquisition of the 3 Jackup rigs and the full consolidation of GulfDrill and Gulf Jackup. Higher utilization in the lift boat and barge activity, along with increased onshore rig move and ancillary service revenues rather supported the top line growth. However, profitability declined by 11%, reflecting higher finance costs associated with the new borrowing to fund direct acquisition, alongside increased general administration expenses linked to operational optimization and integration initiatives. In addition, the absence of one-off gains related to the Seadrill transaction recorded in the prior year, weighed on the year-on-year profitability, despite solid underlying operational performance. On a quarterly basis, net profit declined sharply by 97%, driven by low level resulting from reduced asset utilization. This followed the expiry of contracts for 2 onshore rigs and 1 offshore rig towards the end of the prior quarter, in addition to the planned maintenance on another offshore rig during the period, which collectively weighed on the revenue performance. Profitability was further impacted by higher general and administration expenses, reflecting ongoing consultancy costs related to operational optimization initiatives as well as recognition of one-off accrual provision during the quarter. Now we can move to the Aviation segment. The segment recorded 2% revenue growth year-on-year, driven by higher flying hours and improved performance in the MRO business, supported by increased third-party engine repair activities. Despite the top line growth, the net profit declined marginally by 3% year-on-year, reflecting margin pressure and higher operating costs. Gross margin contracted due to elevated operational expenditure, while general and administration expenses increased, mainly driven by higher consultancy fees and administration overheads. Finance costs also rose following increased borrowings related to the acquisition of AW139 aircraft, while finance income declined amid lower return on cash and investment balances. These headwinds were partially offset by strong revenue performance, lower foreign exchange losses and one-off reversal of doubtful debt provisions. However, the combined impact of cost escalation and margin compression outweighed the positives, resulting in lower overall profitability for the period. On a quarter-on-quarter basis, revenue in Q4 declined by 2% compared to the previous quarter, mainly due to lower revenue from MRO segment. This was partially offset by improved revenue from domestic and international operations supported by higher flying hours. Despite the revenue decline, profitability remained broadly in line with the previous quarter as the impact was largely offset by one-off reversal of doubtful debt provision on age receivables, together with higher net monetary gains recorded by RSA, Turkey. Now we can move to the Insurance segment. The Insurance segment delivered 12% revenue growth for year ended 31st December 2025, driven by higher premium income from medical insurance line, supported by the award of a new contract. Net earnings recorded a modest year-on-year increase by 1%, reflecting stable operating fundamental and disciplined execution. Performance was underpinned by stronger insurance revenue, supported by sustained underwriting disciplines. This was partially offset by lower investment income attributed to a softer interest rate environment and reduced dividend income. From equity investment, in addition, higher general administrative expenses weighing on the overall profitability, despite these pressures, the segment maintained a resilient performance, highlighting the strength of its underlying operation and its ability to navigate changing market condition while sustaining profitability. On a quarter-on-quarter basis, revenue in Q4 increased by 10% compared to the previous quarter, driven by higher earned premiums and improved pricing on selected contract upon renewal. However, segment profitability declined in Q4 mainly due to lower investment income resulting from unfavorable fair value movement and investment portfolio, alongside an increase in general and administration expenses. We can conclude our segmental review with Catering. The Catering segment recorded a 3% increase in its share of revenue year-on-year driven by higher revenue from catering and related support services following the mobilization of the new contracts alongside improved pricing on selected contract. The segment share of net profit increased by 11%, supported by improved revenue performance. On a quarter-on-quarter basis, the segment share of revenue decreased modestly by 1%, while profitability increased by 36%. This improvement was driven by lower direct costs and reduced general and administration expenses, resulting from reversal of decommissioning and credit loss provision during the quarter. These nonrecurring reversals contributed positively to the earning. With that, we conclude our presentation, and we can now open the floor for the Q&A.

[Operator Instructions] Your first question comes from the line of Rabi Musa of QIC.

Three questions from my side. The first one, can you provide the average day rates for your offshore and onshore fleet? The second one is on the investments and fleet expansion. Can you provide any insight going forward for 2026 and 2027? And the final one is on CapEx. Can you provide guidance on your CapEx for 2026?

Thank you for the question. I will start with the first one regarding the average day rates. So the average day rates, I will take it on different categories of drilling rigs. So the first category, it's the rigs which are owned by GDI and under the full ownership of GDI. So the average for these rigs, I think, it's between, I would say, USD 74,000 and USD 76,000 per day. For the onshore rigs, so that's another category, the average is ranging, I would say, between USD 19,000 and USD 21,000 per day. And then the final category is relating to the offshore rigs, which are under Gulf Jackup and GulfDrill. The average is, I would say, between USD 110,00 and USD 215,000 per day. So that's for the first question. Regarding the second question and third question, I think, these are almost similar investment and fleet expansion. I will start with GDI. I think, in GDI, we have already announced in -- that we have acquired 2 service lift boats. So these lift boats are planned to be up and running in 2027, 2028. So they are under construction now. So we officially started the construction. So normally, it takes around 2 years from the date of ordering those lift boats. So that's the first expansion. I think, in terms of CapEx, CapEx, it's -- we have the normal CapEx, which is not including any addition of, let's say, the major investments in rigs or the other components like the helicopters or the aircraft. And we have the other part, which is relating to the normal, I will say, long-term maintenance of some of the aircraft or the strategic spare parts that we deploy to maintain the rigs or to maintain the helicopters. So I think, in total, majority of the CapEx during the year of 2025, it's around QAR 400 million to QAR 500 million. I think, we will maintain the same level of investment. In the helicopter side, we already announced the acquisition of the 6 aircraft-s out of the 10 helicopter we have ordered that as part of the first batch of investments. And on top of that, we are acquiring as well another 5 new AW139 aircrafts, in addition to the 2 AW189 aircrafts. I think, these are the major investment and CapEx plan for the next period. And if there is any additional investments planned in the drilling sector or in the helicopter sector, this will be announced on a quarterly basis.

Your next question comes from the line of Nikhil Phutane of CBFS.

Well, my question is related with your drilling in terms of overall planned and unplanned maintenance. So suppose you can just give us a gist about what has been, say, end of September and how it moved across in fourth quarter in terms of both GDI and onshore/offshore. And what is happening, say, till January 2026? How many rigs have come online, if possible? Can you just give us an idea about all this?

So I will -- I think, this will probably cover additional aspects of your question regarding the expiry of certain contracts on the onshore rigs as well. I will shed some light on that as well. So by the third quarter and fourth quarter, an additional 2 onshore rigs, they came out of contract in addition to an additional one, which was not renewed since last year. So in total, at the moment, we have 3 onshore rigs, which are not contracted until Q4 2026. So probably, this will be extended for another quarter until we reach agreement on the extension of these rigs with existing customers or a different customer. So discussions are ongoing to place those 3 rigs. And then we will disclose any updates on that side during Q1 2026 disclosure. So that's on the onshore side. On the offshore side, there are 2 parts. So the first part is relating to one of the offshore rigs that we don't own. That's one of the leased offshore rigs. That rig has operated until September 2025. And beyond that, so it has not been renewed. So that has 2 phases. So first, we are not renewing the contract with the client in terms of revenue generation. And at the same time, we were not renewing as well the other leg of the transaction, which is the leasing of that contract. So at the moment, so basically, we are saving the cost of the leasing, but at the same time, we are losing the opportunity of that revenue coming in. So the impact -- the total impact of that has taken place during Q4 2026, the same -- Q4 2025. The same will continue over the next year 2026, unless we find probably a way to place that rig. And then we will discuss in that case, the leasing as well with drilling provider. Our own rig, which was stopped during end of Q3, beginning of Q4, that was mainly for maintenance. So now, it started operation starting from November 2025. It's fully operational, and it had been renewed for an extended contract of around 4 to 5 years. So -- and that rig is operational and working without any issue.

Okay. Regarding -- I mean, you mentioned about same will continue on the lease. So I wanted to know the one-off accrual provision that you've made it for the quarter. So what is that regarding? Is it same thing? Or it is something different? And what has been the quantum size for this in the last quarter value-wise?

Yes. We are not renewing the contract. So the contract has expired by end of Q3 2025. So if there is any renewal of leasing, that will be announced. So what you see in the financials, that will be the winding up of the previous lease agreements due to moving some of the rigs to be under the full ownership of GDI and for that specific rig, so any extra accruals has been reversed during Q4 2025.

Okay. So, I mean, it has been reversed. So what has been the value? Can you get an idea?

Which value you mean?

I'm talking about the one-off accrual provisions that you have made for the quarter, which you have mentioned in your drilling. So what has been that -- I mean, what has been the value for that?

I think, it's relating to the accrual that you are referring to. It's not relating to the lease itself. So it's relating to some accruals that took place in GDI, which are relating to some expenses for year-end relating to personnel payment. So it's around QAR 13.1 million, in addition to some accruals of expenses relating to consultancy fees amounting to around QAR 14.7 million.

Okay. Wonderful, sir. And -- okay, so coming to your aviation, sir, I mean, the international operations have done better than the domestic. I am talking about in the fourth quarter. So I mean -- and we've also seen there is some kind of a seasonal pattern over the last 2 to 3 years. So what do we expect in the first quarter? Are we going to be seeing again coming down to normal levels, of what we have seen in the past?

Yes, I think, it's correct. So now, if you can see, I think, the impact of accrual has diminished in Gulf Helicopters during Q4, as we are trying to streamline those accruals on a monthly basis. The only issue is relating to the operation itself. So what we have seen in the MRO business, there is a decline of almost QAR 26 million in the MRO business during Q4 compared to the previous quarter. And this has specific operational reasons. So first of all, so this is relating to the operation itself. And then the second reason, which probably you will see sometimes in Q1, some of the invoicing instead of taking place in Q4 will be only approved in the second quarter, which is in Q1, and we cannot accrue those kind of revenues because we don't have, let's say, the agreement with the customer. This -- so accrual of expenses is much easier compared to the accrual of revenues. So unless you get the full confirmation from the customer, making sure that all the order has been closed then you cannot accrue those kind of revenues, which in most of the cases, will be taken during the next quarter, which is a timing issue. So -- but the good news for the MRO business, we have signed a new agreement in Kuwait. That's an agreement for a few years. So that will have an impact starting from Q1 2026.

Okay. So do we expect in the first quarter itself because of the invoicing taking place in Q1, the run rate could again come back to the normalized level, say, in the first half of 2025, which we saw?

Yes. I think, it will come back to its normal level. The impact of invoicing itself is not huge. So just a correction, I think, of a few millions. But I think, we expect the return to the normal operation through the new contract that we have signed with the Kuwaiti client.

Okay. And concerning, again, a one-off reversal in your doubtful debts in your aviation. So what has been the -- what are these amounts? And can we expect anything, further reversal is expected in 2026.

I think, that -- it's already, I think, explained in the financial statement. It's around QAR 22 million. So that's relating to some of the provisions that were made for different accruals for bad debt, but the good thing is that the management have done their efforts, they collected those amounts and those provisions and accruals, they don't have any sense to be included as part of the financial statement. And hence, we have reversed those amounts of QAR 22 million to be included as part of 2025, since we have collected those amounts.

Okay, sir. And one more, if I may, on that question. In terms of the main important thing on lower dividend payout this time around, sir. Can you just tell us what could have been the reason behind giving us a lower dividend payout at this time?

Yes. I think, it's -- first of all, the dividend, it's the Board decision. It has been taken on wise, let's say, reasons. So the Board before taking any decision for distribution of dividend, they will look at the engagement of the company, they will look at the accumulated loan of the company, they will look at the expected payments of loans during the year. And they will look as well at the political situation around in the region. So all of this will be taken into consideration. And always, we would like to have some buffer in terms of at the head office to -- in case there is any issue at one of the company level. So the head office can interfere and then we can support our group companies through paying part of the loans, or through supporting part of the growth or the investments that are taking place during the next year. I think, if you look at the financial statement, there is around QAR 320 million of expected payment relating to the loan. We have announced already some investment and growth CapEx for helicopters for the drilling as well. So based on all of that, I think, it's more conservative and more prudent for the Board. So I'm not speaking basically on the decision of the Board itself, but I'm assuming that the Board has taken this decision based on the aspect I have highlighted today.

Okay, sir. And lastly, on your Al-Koot IPO, I mean, anything progress. Can you just elaborate on that also?

Yes. So in terms of the IPO, the IPO is progressing. We haven't -- we've done -- we're right now at a stage where we are doing the due diligence for the IPO with all the related consultants. Once we reach a major milestone in the IPO, we'll announce it, but we are targeting to finalize it when things are ready. So hopefully, by Q1 or Q2, we'll announce to the market if there is something solid on the day of IPO or the target to IPO date.

Question comes from the line of Metehan Mete of Waha Capital.

I just wanted to ask you on the Drilling segment. Like given that the one, the rig has expired, you also ended the lease contract, what's the run rate profitability that you are looking at the drilling segment? I assume it will be lower than the QAR 248 million net profit on the Drilling segment that you achieved in the year 2024? That's my one question. And the second question is, when do you think that the consulting fees that are expensed under the SG&A will be ending. I think, these are related to the IPO that you just like to mention. And the third question is, on the Aviation segment, despite the flat profitability, I see that given that the one-off reversal that you posted, the profit is kind of stayed flat. But without it, it would have shown a decline. Just want to understand, are you facing any cost pressures on that business that's likely leading to the profit decline? Technically, flat revenue should also lead to a flat bottom line for the business.

Yes. I will start with the first question regarding the revenue streamline. I think, if you are referring to 2024, I think, it's normal that part of the business, especially on the onshore side. So we have 3 offshore -- onshore rigs that are not operating in Q4 2025. So if this will continue, definitely, it will have some impact on the net profits. Probably, it's not similar to the impact that probably we could have from the offshore rig, which is the least one, which will not be renewed. So that has much higher impact on the net profit. So I think, it will definitely have some impact on the net profit. So that's for the first question. Regarding the second question for consultancy. So far, consultancy, most of the work has been done in 2025. So part of the work will be completed as well in 2026. So this is a major transformation project, taking place at GDI, mainly for -- to improve and to optimize the cost to make sure that we have the correct cost structure and to improve our policies and procedures in terms of supply chain, in terms of inventory, in terms of purchase of inventories, all of this. So, so far now, the big part has been completed in 2025. Only a small part, which is probably representing QAR 4 million to QAR 6 million will be there during the next year. So that's regarding consultancy fees. Regarding aviation, I think, the one-off that took place, it's regarding the -- as I mentioned, regarding the reversal of bad debt. So that's due to the efforts taken by the management to collect those QAR 22 million, which were in the beginning, considered to be difficult debt to be collected. But, I think, with all the efforts of the management, this has been closed. And then I think, it has been part of the net profits of this year. So probably, this will not be replicated during next year. But I think, the main impact, I would say, from the aviation, it's not relating to that reversal, but it's mainly relating to the decline in the revenues and the decline in the contribution of the MRO business in the fourth quarter. I think, once that will stabilize in addition to some additional costs that have took in place in Q4 relating to the maintenance of aircrafts, I think, with that, we will have a very stable net profit. If I will say some of the uncontrolled costs will remain without impact on the net profit of the company. And when I say uncontrolled, that's mainly relating to the impact of foreign exchange, which is sometimes will have a huge impact on the net profits of Gulf Helicopter, in addition to the impact of the hyperinflation, IAS 29. So for this year, we have been very lucky because the impact is positive, around QAR 20 million compared to, which is exactly the same amount as last year. But those impacts, we cannot control, it's not under the control of the management, and they are basically variable compared to the latest exchange rate available and the latest rates available in the market, especially in Turkey.

So is it fair to expect that like the stabilized profitability of the Drilling segment will be above QAR 220 million? Or do you think it will be above around QAR 200 million?

We normally don't comment on the expected net profits for the company. So during the calls, we mainly concentrate on the performance of the company during that specific quarter. We provide some highlights about the CapEx, about some of the indicators of the performance of the company, but we don't provide any expected net profits.

Your next question comes from the line of [indiscernible] Capital.

I have 3 questions. The first one on the Aviation segment. Could you please give like an indication of the cost of the aircraft acquisitions that to be expected in 2026 and 2027. What is the CapEx outlay for the -- to the aircraft acquisition? And the second question is for the Drilling segment. From the current onshore and offshore rigs, any of them would have a contract expiring this year and not renewed yet. Also on the lifeboats, can you please also shed light -- shed some light on the day rates for the lifeboats? And finally, my final question is on the Insurance segment. Do you expect an impact from the Qatari -- the ensuring of Qatari citizens on Al-Koot, if any? That's all.

Thank you. For the Aviation, I think, for the CapEx, so we can expect the acquisition price is, I would say, between EUR 12 million to EUR 15 million for each aircraft. So depending on the technology that will be used depending on many other aspects because it's not only the aircraft itself, but sometimes additional technologies, additional finishing or additional accessories will increase the price of the acquisition, but the average price is between EUR 12 million and EUR 15 million for each aircraft for the AW139. The AW189, it's more expensive. And I will say it's 10% to 15% more expensive compared to the AW139. So that's regarding the aviation investment for the offshore rigs that we have. So again -- so based on the -- what I have explained in the beginning, for the rigs, which are 100% owned by GDI under direct GDI ownership, so we have only 2 rigs, which are expiring by Q4 2026. Most of the other rigs have been extended. So we are working together with our customers or with new customers to renew those rigs. So discussions are ongoing regarding the tail and regarding the prices, and we will provide additional disclosures during the next quarters if we reach agreements regarding the renewal of those rigs. So all the other rigs, I mean, the offshore rigs that are under the ownership of Gulf Jackup, they have been renewed until mid-2027 and until Q3 2027. So -- and again, those rigs as well will be discussed for renewals. Probably starting from 2026, we will start the negotiation with our customers to renew those rigs for addition of that. So that's for the second question. In terms of day rates, I think, we provided in the beginning of this call, the average day rates per category, what is already, we say it's ranging from 74 million to 76 million for the ones, which are owned by GDI and between 110,000 and 115,000 for the ones on the Gulf Jackup. And for the onshore rigs, it's, I would say, between USD 19,000 and USD 21,000. That's for the third question. Last question regarding the insurance segment. Definitely, if we are -- if you will be winning that contract, for the insurance of the mandatory insurance for Qataris. So definitely, this will have an impact on the business of Al-Koot. So as you know, so the business of insurance is based on 2 main aspects. So the first one is underwriting itself. So normally, the underwriting is not especially in the medical line of business. So it's -- I think, you will get some profits. And on top of that, so most of the profit as well, you get from the investment income based on the revenues or the premium that you will be collecting, so with having all Qataris part of that medical insurance. So this will have a good impact on Al-Koot performance at the top line, in addition at the net profit side as well and the investment side.

Just on the lifeboats, how do we account for those? Is there a day rate for the lifeboats?

Yes. In the lift boats, yes, we have day rates for the lift boats. So at the moment, the average day rates, I would say, between USD 25,000 and USD 35,000.

Question comes from the line of Advaita Nair of Aventicum Capital Management.

Thank you for the call, firstly. I had a couple of questions from my side. So regarding the Insurance segment and the QAR 400 million reversal in the past service estimates, could you provide a bit more color on what specific events triggered this downward revision, and that's particularly coming from the energy insurance portfolio as well as the other lines. Secondly, could you help us reconcile the 96% rig utilization in Q4 despite the return of that offshore rig to...

Yes. I think, adjustment in the insurance business are mainly based on actuarial calculations that are taking place to correct what will be the expected claims in the future. So based on that, so the company will undertake some calculations for -- to calculate the expected claims. And if there is any overprovision or the provision is not enough, so basically, they will adjust those expected claims based on the reports from external party, which is the acturials.

Okay. Understood. And just one final question from my side. So for the acquisition of the 5 additional helicopters, the AW139 unit. Will they be financed with the existing loan facilities or will new debt arrangements be required?

We -- the company has already entered into a credit facility with one of the local lenders. So that credit facility is a long-term facility, and it's based on 20% equity, 80% loans. So that's the structure that we are using for the acquisition of aircrafts.

Next question comes from the line of Aqsa Shaikh of Decimal Point.

Yes. The questions have been already answered.

Your next question comes from the line of Ejayan Al-Ahbabi of AI Rayan Investment.

Sorry, my question was already asked.

Your next question comes from the line of Ildar Khaziev of HSBC.

This is Ildar Khaziev from HSBC. Just a quick question about the mechanics of renewing the contracts in the offshore drilling segment. Do you kind of engage with your key customer directly or participate in public tenders? What's the process usually there?

Definitely, we do engage directly with our customers. And for the mechanics of renewals of these agreements, so it can take months from the initiation of discussion until the closing of the agreement. So this will be through sometimes tenders, but sometimes direct awards, sometimes extension of existing contracts or sometimes it's -- the contract itself will have some options to extend where the customer will avail those options. So -- but there are lots of interaction with the customer. So those through e-mails, meetings, calls, and it's directly with the company. So we don't use any brokers. We don't use any middleman. So it's all direct through GDI.

Your next question comes from the line of Nikhil Phutane of CBFS.

Just a follow-up question on your helicopters. I mean, you mentioned about 6 aircrafts out of 10, you have already got it, another 5 AW1s are coming up. So can we know how it will pan out quarter-wise, the first quarter, second quarter of 2026?

So I think, we don't have exactly every quarter, so how many aircrafts will be coming? But what I can say is so by 2028, we will have most of the aircrafts here. So and then remaining probably in 2029, 2030, an additional 2 aircraft will be added from the AW139. So I think, what you can probably calculate. So you can take, 2027, 2028, will be the peak time for the delivery of those aircrafts.

Your next question comes from the line of Rabi Musa of QIC.

Just a follow up on the Aviation question. So you just said by 2028, we will see most of the helicopters than acquisition of the helicopters done?

Yes, that's correct, yes.

And 6 out of the 10 aircrafts have been already acquired.

Yes, it has been already acquired and delivered.

Yes. So we have 4 more to come till the year-on-year, it will be in patches before. Maybe we'll get one in every year out of this contract. And then the other 5 aircraft contract we announced just now, it will be by 2027, 2028. And then the AW189 will be coming in third quarter '27.

Third quarter 2027?

Yes. This is for the AW189, the 2 aircraft.

Just to add on this. So I think, when we say they are expected to arrive for example, in Q3 or Q4 2027, it doesn't mean they will start to be operational on that specific quarter because based on our previous experience, there will be some, I think, I would say, 3 to 6 months for testing, for getting the licenses for those aircrafts. That's a process that we do at Gulf Helicopter, where I think, the delivery of the aircraft doesn't mean that the start of the operation.

Yes, cost of revenues, yes.

Your next question comes from the line of Nafez Alabbas of Ajeej Capital.

My question is regarding the Drilling segment. I understand the clarification that you guys have provided, and thank you very much for that, but I mean, our -- weren't we under the impression that there will be more demand for drilling activity? I mean, as these nonrenewals, are they being won by more other competitors or like the total production or overall country operations are like in terms of drilling operations are declining?

Thank you for the question. I think, I will answer your question was giving a few highlights on what's happening in the market. So what we see in the market, it's basically a very flat demand of rigs during 2025, and probably, this will be extended up to 2026. So in the market we have seen in Saudi Arabia, so some of the offshore rigs have been terminated -- early terminated, and that has added some pressure on the pricing, some pressure as well on the availability of rigs. And as you know, demand and supply will dictate the price and the day rates for these rigs. I think, the -- what we see from the political tensions in the region from some, I think, of the development in the region, this has an impact on the oil and gas service companies, including our companies. So I think, we have been impacted, I will say, mainly at the onshore side. So offshore, so far, I think, things are fine, except that offshore rig, which we don't own, which is leased, which has not been renewed. So otherwise, I think, most of our rigs has been deployed. Day rates are still fine and are still serving the purpose of GDI. So we are not seeing a huge impact or a huge decline in our day rates so far. But the market itself is not increasing. The market is still flat, and we don't see a huge demand coming in the region.

Next question comes from the line of Rabi Musa of QIC.

Just a final follow-up on the Aviation segment. What you have seen before, how long does it take between the time the helicopter is delivered and the time it starts operations like 1 quarter, 2 quarters?

Based on the past, it's taking from 1 to 2 quarters.

I don't have any pending questions as of the moment. I'd now like to hand back to Bobby Sarkar for final remarks.

Thank you, Eli. If we have no further questions, we can end the call for today. I want to thank Sami and Rashid for taking the time to go over the presentations and answer all our detailed questions. Thank you very much. We'll pick this up next quarter.

Thank you. Thank you.

Thank you. Thank you so much.

Thank you for attending today's call. You may now disconnect. Goodbye.