On 18 November, Medserv plc published its Interim Directors’ Statement updating the market on its performance during the second half of the year.
The announcement made reference to the statement in the 2015 half-year report in which the Directors had anticipated that the results for the second half of this year would not match those of the first half. However, the results for the third quarter of this year have exceeded budgets. The better-than-expected performance reflects the high levels of activity at the Malta base including the arrival of large amounts of material in preparation of increased drilling activity offshore Libya. Moreover, Medserv’s Libyan branch continued to provide essential administration and support services to the offshore Libyan activities.
Additionally, the Cyprus base, whilst continuing to generate revenue from its services to ENI, has the potential to expand its activities following the recent discovery of the mega gas field offshore Egypt (close to Cypriot waters) by ENI which has increased interest in the area.
In the meantime, the Group is developing its engineering services arm. In this respect, the Group is holding an Extraordinary General Meeting (EGM) on 3 December seeking shareholder approval for the acquisition of the METS Group (comprising three companies: Middle East Tubular Services Limited, Middle East Tubular Services (Iraq) Limited and Middle East Tubular Services LLC) for a consideration of USD46 million. This acquisition will provide the Medserv Group with an expanded blue chip client base, entry into a new geographical region and a business with a focus on delivering essential but non-critical logistics as well as engineering services in the oil and gas sector in the Middle East.
In conclusion, the Directors noted that the better-than-expected third quarter results confirm that Medserv has responded well to the challenging environment in the oil and gas industry given the lower level of prices for these commodities. The Directors also noted that whilst the process to acquire the METS Group is progressing well, the Company is also pursuing business opportunities in Egypt and Trinidad although these are still at an early stage.