Medserv plc - Interim Results

On 30 August, Medserv plc announced its 2011 half-year results revealing a substantial decline in turnover to €3.9 million compared to €7.2 million in the first six months of 2010. Despite the substantially lower levels of turnover, Medserv generated a gross profit of €797,913 (June 2010: €919,956), as profit margins on some of the activities carried out in the first half of the year were higher than expected due to the uncertainty in Libya.

In the first half of 2011, the Malta base performed a number of services related to the Libya crisis as it was seen as a reliable and safe haven for the relocation of oil field equipment and for facilitating the repatriation of staff employed by oil companies. The base situated within the Malta Freeport was also responsible for evacuating most of the workers situated on the oil platforms offshore Libya. Overall revenue from the Malta base amounted to €3.5 million (June 2010: €4.4 million).

On the other hand, the Misurata base remained non-operational during most of the first half of 2011. Revenue generated from the base in Libya only amounted to €427,240 against €2.8 million in the first six months of 2010. However Medserv confirmed that there is still a substantial amount of equipment owned by oil companies on the base in Misurata which remained undamaged during the political upheaval and for which storage is being charged. The assets situated at the Misurata base have to date not been seriously damaged and most of the damages can be easily repaired.

The Medserv Group registered a profit after tax of €141,137 during the first half of 2011 when compared to €147,753 generated in the same period last year in large part due to the strict cost controls adopted and the revised accounting estimates of the useful life of plant and equipment. Administrative expenses declined by 30% to €0.59 million with other expenses amounting to €32,190 compared to €107,783 in the first half of 2010.

In the 2011 Interim Report, the Directors also stated that the Group is ready to restart operations in Misurata as soon as it is safe to do so and when clients return. With regards to existing offshore oil and gas platforms, Medserv stated that these will probably be the first operations to restart and will be served mainly from the Malta base. Moreover, the Directors explained that it looks forward to restarting its planned programmes for drilling production wells in the offshore Bouri field when hostiles in Libya cease as well as to the commencement of existing planned programmes of international oil companies for which Medserv already has signed contracts.

Meanwhile, Medserv reported that negotiations with the Sicilian partners TEA Shipping SRL were successful and a number of business opportunities both for offshore mainland Italy and also for Sicily have been identified and a business plan has been formulated.

Medserv concluded by stating that although it remains uncertain about the eventual ceasing of hostilities in Libya, it remains well placed to benefit from the restarting of operations in the oil fields in Libya.

Medserv did not to recommend the payment of an interim dividend.

Download a copy of the 2011 Interim Report of Medserv plc