MedservRegis plc - Updated Financial Analysis Summary

On 18 June 2024, MedservRegis plc published an updated Financial Analysis Summary. The main highlights of the projected financial performance and position of MedservRegis for the 2024 financial year are as follows:

  • Revenues are expected to drop by 13.5% to €64.0 million compared to €74.9 million in 2023 reflecting the absence of the one-off income generated in Morocco last year that will not be repeated in 2024. In fact, income from the Integrated Logistics Support Services (ILSS) segment is expected to fall by about 20% to €35.8 million. The decline will be partially offset by an anticipated 3% growth in income from the Oil Country Tubular Goods (OCTG) segment to about €28 million. From a geographical perspective, the Mediterranean region is expected to be the principal income generator representing 44% of revenues, while the Middle East is expected to generate 41% of income, with the remaining revenues expected from Sub-Sahara & East Africa (14%) and South America (1%).
  • In line with the lower revenues, EBITDA is forecasted to fall by 16.4% to €14.6 million (2023: €17.5 million).
  • MedservRegis is anticipating a 26.4% decrease in net finance costs to €4.56 million from €6.19 million in 2023 reflecting the impact of lower bank borrowings. Furthermore, MedservRegis explained that net finance costs can be materially affected by foreign exchange movements. In view that the reduction in finance costs is expected to be sharper than the reduction in EBITDA, the interest cover is expected to improve to 3.53 times from 2.83 times in the previous year.
  • Total debt is expected to drop by 2.8% to €68.8 million, including €17.1 million in lease liabilities. As a result, the company’s gearing ratio (calculated as total debt divided by total debt plus equity) is projected to ease to 53.9% compared to 54.9% as at the end of 2023.
  • Considering an expected cash balance of €20.6 million as at 31 December 2024, Medserv is anticipating a net debt position of €48.2 million. Consequently, the net debt-to-EBITDA multiple is expected to remain at the 3 times level.