MedservRegis plc - Updated Financial Analysis Summary

On 26 June 2023, MedservRegis plc published an updated Financial Analysis Summary. The main highlights of the projected financial performance and position of MedservRegis for the 2023 financial year are as follows:

• Revenues are expected to ease by 4.7% to €63.8 million, as the growth in income from the Oil Country Tubular Goods (OCTG) segment (+6.1% to €24.8 million) is expected to be offset by lower revenues from the Integrated Logistics Support Services (ILSS) segment (-10.4% to €38.5 million) and the PV farm (-12.1% to €0.46 million). From a geographical perspective, the Mediterranean region is expected to be the principal income generator representing 44% of revenues, while the Middle East is expected to generate 39% of income, with the remaining revenues expected from Sub-Sahara & East Africa (16%) and South America (1%).
• Despite the lower revenues, EBITDA is forecasted to surge by 26.6% to €14.4 million driven by the growth and improved margins expected to be achieved from the OCTG segment.
• MedservRegis plc is anticipating net finance costs of €4.27 million. As such, the interest cover in 2023 is expected to be around 3.4 times. Meanwhile, in 2022 the Group accounted for net finance income of just under €1 million as the foreign exchange gains and interest receivables outweighed the finance costs.
• In terms of financial position, total assets (-4.5%) and total liabilities (-8.4%) are expected to drop to €144.9 million and €83.7 million respectively.
• The Group’s total debt is expected to drop by 10.7% to €65.1 million, which includes €15.4 million in lease liabilities as MedservRegis envisages to continue reducing its borrowings. As a result, the company’s gearing ratio (calculated as total debt divided by total debt plus equity) is projected to ease to 51.5% compared to 54.7% as at the end of 2022. Furthermore, the net debt-to-EBITDA multiple is expected to strengthen to 2.80 times compared to 4.69 times in 2022.