MedservRegis plc - Full-Year Results

On 28 April 2023, MedservRegis plc published its Annual Report and Financial Statements for the year ended 31 December 2022. It is important to highlight that these financial results are not fully comparable with the financial statements covering the twelve-month period ended 31 December 2021. While the Consolidated Statement of Financial Position as at 31 December 2021 represented the consolidation of both the former Medserv Group and the acquired Regis Group, the Consolidated Statements of Profit or Loss, Other Comprehensive Income, and Cash Flows only included a six-month contribution of the former Medserv Group – i.e. from 1 July 2021 to 31 December 2021 – given that the share-for-share exchange was concluded on 25 June 2021.

Performance Overview

During 2022, revenue amounted to €66.9 million, which is 22% higher than the updated forecasts published in November 2022. The company explained that the increase was mainly due to additional drilling offshore Cyprus towards the end of the year and an improved performance in the Middle East. ‘Integrated Logistics Support Services’ (ILSS) accounted for 64% of revenue while ‘Oil Country Tubular Goods’ (OCTG) represented 35% of income, while the remaining 1% was generated from the photovoltaic farm.

On the expenditure side, net operating costs amounted to €67.9 million. As a result, MedservRegis reported an operating loss of €0.94 million. Excluding depreciation and amortisation charges amounting to €9.68 million as well as €2.66 million in impairment losses related to property, plant, equipment, and intangible assets, adjusted EBITDA amounted to €11.4 million which is just under the forecasted EBITDA of €11.6 million and translates into an adjusted EBITDA margin of 17%.

After accounting for net finance income of €0.94 million, a tax credit of €0.52 million, and a loss of €0.03 million attributable to non-controlling interests, the net profit attributable to shareholders amounted to €0.58 million.

The Statement of Financial Position as of 31 December 2022 shows that total assets increased by 0.6% to €151.7 million. Meanwhile, total liabilities increased by 3.9% to €91.4 million. Shareholders’ funds dropped by 4% to €57.6 million which translate into a net asset value per share of €0.5670 (31 December 2021: €0.5906) largely reflecting adverse foreign currency exchange movements (directly accounted for in equity) which offset the profit registered during the year under review.

Outlook

Looking forward, the Directors anticipate that the Group’s performance in 2023 should be broadly in line with that registered in 2022 with improved results in some regions. The Group forecasts another year of growth and margin expansion. Turnover and profitability are expected to continue to improve over that registered in 2022. Inflation will impact the Group’s cost structures and where possible the Group is hedging against this impact.

Moreover, the Group’s strategy is to continue its growth trajectory and increase market share and profitability on the back of the significant energy projects scheduled to be developed in the Group’s core geographical markets (Mediterranean, Africa and Middle-East) in the next five years. The Directors also noted that the Group remains poised for achieving further profitability without the need of significant additional capital expenditure as its operational reach in Africa, Europe, Middle East and South America is presenting unprecedented opportunities for both ILSS and OCTG business segments.