MedservRegis plc - ‘COVID-19’ Market Update

On 7 April 2020, Medserv plc issued an announcement providing an update on how ‘COVID-19’ is impacting its business and operations. In this respect, Medserv explained that although the ‘COVID-19’ is presenting many operational challenges, all of the Group’s facilities continue to remain operational. Nonetheless, the ‘COVID-19’ pandemic coupled with the downward pressure on the price of oil are adversely impacting the oil and gas industry in general, particularly exploratory offshore drilling projects. As a result, the majority of offshore drilling exploratory projects have been postponed (rather than cancelled), including projects involving services offered by Medserv. Meanwhile, demand for Medserv’s services to the development and production facilities both offshore and onshore remain ongoing and consistent, particularly in the Middle East.

Overall, it is expected that Medserv’s EBITDA for the 2020 financial year will be negatively impacted, although the company’s objective is to preserve liquidity and ensure that it continues to register positive EBITDA. Immediate measures are being adopted with the aim of reducing costs and delaying capital expenditure. Moreover, in all countries in which the Group operates (namely Malta, Cyprus, Egypt, the United Arab Emirates, Oman and Iraq), Medserv will benefit from the varying schemes adopted by the respective Governments to mitigate the significant economic and financial repercussions from the ‘COVID-19’.

Based on the company’s mitigation plans put into immediate effect, Medserv confirmed that it has sufficient resources and funds to maintain all its payment obligations as they arise and fall due throughout the course of 2020.

Publication of the 2020 Audited Financial Statements

Medserv also explained that it is currently undergoing its audit of its financial statements for the year ended 31 December 2019. Given the prevailing unprecedented environment, the company’s auditors have requested an extension of one month to finalise the audit engagement in view of difficulties in collating audit evidence. As a result, the 2020 audited financial statements will now be published by 31 May 2020 which is also in line with the circular published by the Malta Financial Services Authority on 27 March 2020.