On 21 November, Medserv plc issued an Interim Directors’ Statement explaining its progress so far this year and the potential business pipeline for the future.
Medserv stated that despite the tough trading conditions, it is still expecting its revenues for the year to be close to the revised forecasted amount of €38 million. However, Medserv stated that this could improve if the projects earmarked to commence in the last quarter of the year materialise.
Medserv indicated that turnover and profitability of METS Oman is expected to surpass forecasts and METS U.A.E is expected to reach the budgeted profit. On the other hand, METS Iraq registered a loss but it has just completed a restructuring plan which allows it to remain fully functional and work at break-even from October 2016. In addition, the synergies being created through the acquisition of METS is starting to deliver new revenues for Medserv and the first contract for pipe testing was successfully completed.
The work levels for the Malta base are expected to be high in the next three years. Meanwhile, Medserv is awaiting the adjudication of a second tender for logistic support offshore Libya.
In Cyprus, the base in Larnaca remains in a mothballed position and discussions are ongoing with both clients and local authorities on the future of shore base services. Likewise, the operation in Portugal is also in mothball mode and drilling operations are now expected to commence in the first quarter of 2017.
With regards to potential new business, the outcome of the tender for business offshore Trinidad should be known by the end of the year. Medserv has also been accepted on the vendor list of a further two companies with operations offshore Trinidad which will allows it to participate in tenders expected to be issued in 2017. Medserv announced that it set up an office in Trinidad to explore business opportunities in the Caribbean region.
Similarly, Medserv has also been accepted on the vendor list of two International Oil Companies (IOCs) operating offshore Egypt and the first tender in which Medserv may participate in is expected to be issued in November 2016. Medserv confirmed that it established an office in Cairo, Egypt. Furthermore, Medserv is also following its main IOCs by starting to investigate the opportunities offered by the market in Iran.
Overall, the Company explained that the initiatives taken to date have not only reduced the shortfall in performance but also placed it in a position to perform strongly next year.