MedservRegis plc - Interim Report
On 18 May, Medserv plc issued an Interim Directors’ Statement updating the market on its financial performance during the first quarter of 2016.
The Directors noted that the low price of oil has inevitably led to increased demands from clients for discounts on the Company’s services. Nonetheless, Medserv remains very busy and is continuing with its efforts to identify areas in which it can gain additional cost efficiencies.
Overall, Medserv is anticipating that total revenues for 2016 to exceed that of 2015 but profits are to remain stable around the post-tax profits in 2015 amounting to €4.5 million.
The announcement further explained that the Malta base, including the Company’s offices, warehouses and open areas, are almost fully utilised. Moreover, Medserv has been awarded two contracts in respect of the replacement of an offshore storage facility permanently lying offshore Libya. Additionally, there are a number of contracts relating to other projects in the renewal or final negotiation stage. In the meantime, the Company expects exploration activity offshore Libya to recommence in July of this year.
With respect to the recent acquisition of the METS Group, the Directors explained that the integration of METS within Medserv is proceeding well. As Medserv moves into the more technically advanced areas of essential engineering services, the indications being received suggest a strengthening demand for METS core services of inspection, storage and repair of premium Oil Country Tubular Goods (OCTG) pipe. METS business remains particularly strong in Oman and is expected to continue at these levels or improve during the year. In contrast, METS Iraq and METS UAE have experienced a slowdown in the first quarter of this year, but the business pipeline is indicating an improvement in the second quarter of this year.
The activities of Medserv Cyprus remain at an extremely reduced level whilst the Company is awaiting the decisions of its main customer ENI on their future drilling programme offshore Cyprus. In the meantime, a bid has been submitted for a contract to be awarded by another international oil company (IOC) who intend to drill from the Port of Limassol as an alternative to the Port of Larnaca. Additionally, the Government of Cyprus have announced a new bidding round for areas delineated for exploration drilling.
In addition to the above, Medserv is awaiting the conclusion of the international tender issued by a major IOC relating to the provision of a comprehensive supply base in Trinidad as well as for another contract related to an exploration well offshore Portugal.
Going forward, Medserv is continuing to study how it can penetrate other markets including Egypt and Iran.