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Consolidated Statement of Financial Position
For the year ended 31 December 2022
MedservRegis p.l.c.Annual Report2022
MedservRegis p.l.c.
Annual Report
1
Contents
Page
Directors’ and Other Statutory Reports i
Financial Statements1
Independent Auditors’ Report
MedservRegis p.l.c.
Directors’ and
Other Statutory Reports
2022
MedservRegis p.l.c.
Directors’ and other Statutory Reports
Page
Chairman’s Statementi
CEO’s Statementii
Statement on Corporate Social Responsibilityiv
Directors’ Report vi
Statement of the Directors pursuant to Capital Markets Rule 5.68 xvii
Statement by the Directors on non-financial information xviii
Directors’ Statement of Compliance with the Code of Principles
of Good Corporate Governance xlv
Remuneration Statement and Report lvi
MedservRegis p.l.c.
Chairman’s Statement
For the Year Ended 31 December 2022
i
The year under review, 2022, can be described as a year of two ‘parts’. The two ‘part’ scenario was both anticipated and planned for. The first six months was a period of consolidation. The Group successfully completed the integration of the two companies, Medserv and Regis, restructured the management team as well as put in place new financing arrangements, creating a dynamic and financially sound Group with an extended geographically reach especially in the emerging markets. At the same time new operational plans were introduced to maximise our preparedness for the anticipated business growth in the second half of 2022.
The Financial Statements being reviewed in this report reflect the improved performance achieved during 2022. The recovery registered post the pandemic also reflects the new conditions being experienced in the Energy sector. The return to business of the global economy has created a sustained increase in demand for energy needed to fuel the increase in economic activity. The plans put in place by management have made it possible for our Group to react in a timely manner to offer our clients the urgent support needed in their renewed operations.
The disruption of flow from traditional suppliers of gas to the western markets has increased the necessity for International Energy Companies (IEC) to resume production more rapidly as well as increase their investments in exploration activity. This development further increased the demand for our services.
Our Group has responded well to this new demand. Stalled operations were reactivated through existing contracts and completely new business has been secured. This upturn in demand for fossil fuel, especially gas, is expected to continue in the medium to long term as it is by far the most reliable energy source needed to drive the economy. We are also excited about the increased investment being made by our core clients in alternate sustainable sources of energy. Our group is well placed to service these new operations going forward.
The improved results being reported for 2022 is a clear sign that the strategic decisions taken by the Board of Directors and executive management team have made it possible for our Group to return to financial positive territory. I would be amiss if I do not take this opportunity to thank the Executive Team led by our CEO, Dave O’Connor, for the extraordinary effort put in. I must also thank my colleagues the directors of the Board as well as all employees, contractors and all stakeholders for their contribution. Last and not least I would like to thank our shareholders and bond holders for their continued support.
Anthony S. Diacono
Chairman
28 April 2023
MedservRegis p.l.c.
CEO’s Statement
For the Year Ended 31 December 2022
ii
“Driving Growth and Profitability “
The past year has seen a major shift in the fortunes of the international energy companies registering record profits which we believe will provide substantial cashflow to continue to fund further investments in 2023 and beyond.
 
The outbreak of the war between Russia and the Ukraine in February 2022 created a scenario where we saw oil & gas prices rise dramatically at first and then to finally average at around the $100 per barrel mark for the year. Russia’s invasion of Ukraine created serious concern for European governments, due to their reliance on imports from Russia. This increase in the prices and the energy insecurity saw a rapid move to seek alternative sources away from Russia. Europe’s efforts to wean itself off supplies of Russian gas are already leading to action in Africa. Projects that had stalled are now being speeded up. More than 40% of all the natural gas discovered worldwide was found in Africa between 2010 and 2020. The African continent now holds 13% of world’s natural gas reserves.
 
Our Group Performance in 2022 has seen an increase in revenue in our Eastern Mediterranean and Middle East operations and small yet noticeable improvement in our Uganda operations with the start-up of activity by Total and CNOOC towards the end of 2022. Our Mozambique and Malta operations continued to be under pressure particularly Mozambique due to the continued force-majeure by TotalEnergies in the north of the country. Due to the ongoing political instability in Libya, our Malta business unit experienced very low level of Oil and Gas activity, however through their commitment and ability, managed to secure further non-oil and gas activity. Medserv Egypt‘s contract with IEOC (ENI) for the operations in Damietta were extended to the end of 2022 and a tender was issued for a new one-year contract commencing in January 2023 which was awarded to the Company. Operations were successful and IEOC also sub-contracted these facilities to Chevron for their one well campaign from this facility creating further operations for our team there.
The Company’s total revenues for year 2022 amounted to € 66.9 million. 2021 total revenues amounted to €29.9 million (due to mid-year merge with the Regis Group, only 6 months of Medserv revenues have been accounted in 2021 consolidated revenues).
Adjusted Earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) amounted to €11.4 million (2021: €5.3 million, same perimeter as above stated). A detailed analysis of the Company’s financial performance for the reporting year can be found in the Directors’ report.
As planned in 2021, the Group successfully reduced both the total debt and reduced the cost of borrowing. This was concluded in two steps, firstly in September 2022 with the early redemption of €7 million from the €20 million bonds maturing in 2023. This repayment was funded both with Group’s own cash and with a new lower interest rate facility negotiated with a Maltese bank. In December 2022, a new bond of €13 million was issued at a coupon of 5% per annum to permit the repayment of the remaining €13 million of the 2023 bond (at a coupon of 6% per annum).
Due to the need for governments to ensure their energy security we expect to see more projects reaching final investment decisions (FID) in 2023 particularly and in our opinion the development of natural gas infrastructure. It is our belief that the Mediterranean basin will be a very active area in the next three to five years with European markets seeking to replace Russian pipeline imports. The growing activity in that region bodes well for the continuation of operations at our facility in Cyprus and should also see further growth and activity in our operations in Egypt noting recent tenders submitted to Shell and Chevron.
MedservRegis p.l.c.
CEO’s Statement (continued)
For the Year Ended 31 December 2022
iii
Following the recent announcement by ENI of an $8 billion investment into Libya, we are forecasting that our Malta base will register a substantial upswing of activities supporting this five year mega offshore project in Libya. Likewise, we predict continued improvement of revenues in Uganda as TotalEnergies moves forward with their drilling operations and the development of the East Africa Pipeline. Unfortunately, and at the time of writing, TotalEnergies has yet to make a definitive announcement regarding the resumption of their projects in Mozambique. However, it is to be noted that recent small contracts have been awarded to civil contractors to commence with reparations and rebuilding of infrastructure at the Afunghi base, damaged during the insurgency in 2021. In Mozambique the Group together with a joint venture partner participated in a substantial multi-year tender issued by ENI Mozambique for provision of Logistics Shore Base & Integrated Logistics Services. Adjudication is expected by mid-year 2023 which if awarded to the Group will strategically improve its position in the country.
The Group is also pleased to report that in the first quarter of 2023 it was awarded a contract to provide shore base logistical services to ENI for their drilling campaign offshore Morocco. The shore base services will be performed from Agadir port, with hopefully further opportunities in that country moving forward.
Our Middle East operations through METS as noted in the above report had a successful year in 2022 and our goal is to consolidate this improvement and to move forward to seek further opportunities and grow the revenues in this region during the next two to three years. This will be achieved by investing in the expansion of our footprint into Abu Dhabi and other GCC states over this period, requiring capital and human resources investment.
We remain fairly confident of the Group’s prospects for the year ahead. The Group’s strategy is to continue its growth trajectory and increase market share and profitability. This is achievable based on the significant energy projects scheduled to be developed in the Group’s core geographical markets in the next five years.
The Group’s short to medium term earnings is expected to be derived from logistics and support services to the Oil & Gas industry. Medium to long term the Group is pursuing provision of its logistics services to green energy projects being developed onshore and offshore by both existing and new clients.
We believe that with strategic partnerships, government incentives, and the requirement to access to new markets, together with the continued importance of oil and gas in the global energy mix, the logistics activity to support these projects is poised for growth in the coming years, resulting in profits and resumption of dividend payments.
We thank our customers for their business and trust, our employees for their hard work and dedication, and our shareholders for their support.
David S. O’Connor
CEO
28 April 2023
MedservRegis p.l.c.
Statement of Corporate Social Responsibility
For the Year Ended 31 December 2022
iv
As the Company grows, from the Mediterranean and the Middle East, to now spanning the African continent, MedservRegis recognises the impact of its global reach and scale. As the Company broadens its geographic footprint, it does so with increased recognition of the responsibility to its network of stakeholders including partners, regulators, employees and the broader communities in which we all live and work.
COVID-19 response
MedservRegis renewed its focus on doing what was necessary, and more importantly what was right. Throughout the life-altering pandemic, it prioritised the safety and well-being of its employees and their families, customers, and partners. At the onset of the COVID-19 pandemic, the Company quickly developed robust health and safety protocols and aligned with the government directives and public health authorities’ guidance. At various MedservRegis bases, the Company offered reimbursement for COVID-19 testing for team members, including free rapid testing. The measured and methodical response to the pandemic, provided a good ground to the Company to safely bring employees back to the workplace.
Corporate governance
Maintaining integrity, ethical responsibility and reputation is a top priority at MedservRegis, one that is reliant on sound corporate governance. The Board of Directors sets high standards for the Company’s employees, officers and directors. In addition, it serves as the prudent fiduciary for the Company’s shareholders and is responsible for overseeing the management of the Company’s business. At MedservRegis, management ensures strict adherence to all applicable laws and practices fundamental to the business in every country it operates. As part of the Company’s risk framework, MedservRegis’ Financial Risk Committee reports quarterly to the Audit Committee and has oversight over risk management governance, risk management procedures and risk control infrastructure for the Company’s business and operations.
Environmental impact
Climate change is one of the defining issues of the time. MedservRegis strives for continual improvement of the environmental management system to conserve water and other natural resources, eliminate toxic and hazardous materials, prevent pollution, recover, reuse, and recycle materials. It addresses climate change by reducing the carbon footprint of its operations and services. The Company will continue to invest in conservation and work to reduce environmental footprint through renewable energy of photovoltaic panels, use water efficiently and responsible handling and disposal of hazardous waste.
Philanthropy
MedservRegis has engaged in a variety of philanthropic efforts to improve the local communities. The Company supports several global charitable organisations and have participated in volunteer opportunities related to environmental stewardship, reducing global hunger, promoting education and supporting equality.
In August 2022, Medserv (Cyprus) Ltd supported the wildfire victims in Greece by contributing and collecting money, food, medicine and other supplies to hundreds of homeless families, following the extensive destruction caused by the large-scale fires in Greece. Other donations were made towards voluntary, non-profit, charitable organisations who offer services and programs to cancer patients and their families including the Association of Cancer Patients and Friends (PASYKAF) in Cyprus and the Action for Breast Cancer Foundation in Malta.
MedservRegis p.l.c.
Statement on Corporate Social Responsibility (continued)
For the Year Ended 31 December 2022
v
During 2022, the promotion towards community development and contribution towards poverty alleviation was also present across the MedservRegis group. To mention a few, several non-profit organisations in Mauritius, including Ti Rayons Soleil, Livina Foundation and I61 Foundation, were supported and allocated Corporate Social Responsibility funding to uplift those oppressed of poverty and social injustice.
Looking ahead
The Company’s approach to Corporate Social Responsibility is rooted in its core values and is applicable to the planet, people, and communities. MedservRegis considers each a key stakeholder to its business and remains focused on embedding sustainability throughout the organisation and beyond. Whether it’s reducing the carbon footprint of customers, supporting the development and inclusion of the global workforce, or giving back to the communities, the Company continues to believe that long-term sustainability is not simply held responsible or good for the business, but is required.
MedservRegis p.l.c.
Directors’ Report
vi
The directors have prepared this directors’ report for MedservRegis p.l.c. ( “the Company”) in accordance with Article 177 of the Companies Act, 1995 (Chapter 386, Laws of Malta) (“the Act”) including the further provisions as set out in the Sixth Schedule to the Act together with the financial statements of the Company for the year ended 31 December 2022.
Board of directors
Anthony S. Diacono
Carmelo (a.k.a. Karl) Bartolo
Joseph Zammit Tabona1
Laragh Cassar
David S. O’Connor
Olivier N. Bernard
Keith Grunow
Monica De Oliveira Vilabril
Jean Pierre Lhote2
Principal activities
The Group’s principal activities, through its subsidiaries, consist of providing shore base logistics and engineering services to the offshore oil and gas industry and supply chain management for Oil Country Tubular Goods (OCTG) to support the onshore oil and gas industry. It also provides equipment, procurement, and specialised services to a wide range of customers, including national and international energy companies, drilling and mining companies, as well as product and equipment manufacturers and other heavy industry-related contractors across the globe, reaching the Mediterranean countries, Middle East, South America, South Africa and a number of emerging markets such as Mozambique, Uganda, and Angola.
The Group operates under three trading names, namely ‘Medserv’ in the Mediterranean basin, ‘METS’ being Middle East Tubular Services in the Middle East region and ‘Regis’ in sub-Saharan market.
Reverse acquisition
On 25 June 2021, Medserv p.l.c. completed a share for share exchange with Regis Holdings Ltd (Regis) that resulted in Regis controlling the Medserv plc group of companies. Following the transaction, the combined group changed its name to MedservRegis p.l.c. (hereafter the ‘Company’). From a legal and taxation perspective, the Company is considered the acquiring entity. However, for accounting purposes the transaction has been accounted for as a reverse acquisition in the consolidated financial statements, where Regis is the accounting acquirer, and the Company is the legal acquirer. As a result, these financial statements represent a continuation of Regis’ financial statements except for the capital structure.
As a result of the reverse acquisition:
a)the Consolidated Statement of Financial Position as at 31 December 2021 represents the consolidated financial position of the combined Medserv and Regis group of companies; whereas
b)the Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2021 includes the financial results of the continued operations of Regis group of companies for the entire year and financial results of the formerly Medserv group of companies from 1 July 2021 until year-ended 31 December 2021.
1 Resigned on the 29 July 2022
2 Appointed on the 29 July 2022
MedservRegis p.l.c.
Directors’ Report (continued)
vii
This acquisition brings together the complementary strengths of both Medserv and Regis group of companies and allows the Group to successfully respond to the fundamental changes taking place in the energy market. The global reach of the Company now spans across four continents, comprising a presence in twelve countries and operations out of ten bases. This is expected to strengthen the Company’s market position and broaden its geographic footprint in strategic locations around the Mediterranean region (Libya, Malta, Cyprus and Egypt), in the Middle East (UAE, Oman and Iraq), Sub-Saharan Africa (Mozambique, Uganda, Angola and South Africa) and South America. The board of directors of the Company is confident that the synergies created by this transaction will strengthen the Company’s financial position and improve its capability of delivering value to all stakeholders.
Review of business development
MedservRegis p.l.c.
Directors’ Report (continued)
viii
Business Model
The Company’s objectives are that of sustainable growth and registering profits. The strategy being adopted by the Company to achieve these objectives is a combination of securing growth opportunities in its core business, unlocking value with other key players in the supply chain as well as streamlining the business by increasing automation within its operations.
 
This operating culture is implemented through board of directors’ oversight of management’s implementation of corporate strategy and financial objectives by reference to several criteria, including revenue, Adjusted EBITDA, projected earnings, country by country analysis and other anticipated criteria.
 
The Board of Directors sets the policy which then defines the requirement of the corporate management standards. Presently the Company’s corporate management system consists of fourteen key standards which are to be followed by its employees in their day-to-day operations.
The Board of Directors continues to instil a drive for growth within a business environment where our employees need to act in an exemplary manner in the following areas: health, safety, security, environment, social and governance in all their forms. It is through strict adherence to these values and to this course of action that the Company intends to build strong and sustainable growth for itself and for all its stakeholders.
Additionally, the Board sets non-financial smart objectives and targets on an annual basis to support continue improvement of its Business Model. Progress and oversight of these non-financial smart objectives and targets is carried out through an internal audit programme and a reporting environment.
 
In order to evaluate the business management system, the Company is certified to international standards including ISO9001 Quality Management System, IS014001 Environmental Management Systems, ISO28001 Security Management System, ISO45001 Health Safety Management System, and which are part of a surveillance audit plan by an external accredited body.
Principal risks and uncertainties
The Board considers the nature and the extent of the risk profile that is acceptable to the Board and the impact these risks pose to the Group. The most important strategic, corporate and operational risks, as well as uncertainties identified together with the actions taken by the Group to reduce these risks, are listed below:
Concentration risk: The Group’s business is heavily dependent on a relatively few customers both in the shore base logistics and OCTG. The Group’s objective continues to be to increase client spread within the oil and gas industry. The strategic development team is continuously working to secure business with new International Energy Companies (IECs) and in new countries. The acquisition of METS by Medserv in 2016 and the share for share exchange transaction with Regis during the previous year were both significant measures taken to reduce client concentration risk. The Company is also marketing its services to various energy industries and using its key assets to service non-oil and gas business in order to reduce its concentration on the oil and gas industry.
  
Political risk: The Group’s results may be significantly impacted positively or negatively as a result of political decisions. Regulatory and environmental decisions, as well as political instability can delay, disrupt or cancel projects. The fiscal and economic conditions in Libya remained fragile during the year, characterised by inflation and a persistent political strife. In Iraq, the political and security situation has been improving but the political impasse impacts the commencement of projects. Mozambique continues to remain a major security risk. The Group now operates in ten jurisdictions, mainly in Europe, Africa and the Middle East, with the intention of increasing its operational footprint in these regions and others to continue to minimise this risk.
MedservRegis p.l.c.
Directors’ Report (continued)
ix
Regulatory and environmental risk: The Group operates in ten jurisdictions which are highly regulated, and all have their own unique compliance frameworks. Environmental risks arise from exposures to activities that may cause or be affected by environmental degradation, such as pollution. An infringement in any of these laws and regulations may have significant liabilities and tarnish the Group’s brands, being Medserv, Regis and METS.
Oil price: Oil service companies tend to have greater volatility of earnings than oil majors, given their sensitivity to the capital spending plans of oil explorers, which wax and wane with oil prices. Similar to other players in the industry, an increase in oil prices would directly benefit the Company from increased services required by oil companies in preparation of the oil exploration, development and production. On the other hand, as oil prices decline, energy production companies focus their efforts on increasing operating efficiencies, these actions apply downward pressure on the rates charged by drillers, oilfield services companies, and other suppliers such as the Company. Accordingly, the Company’s profit margins may be tightened due to such weakened demand for the services offered and heightened industry competition to maintain market share. The Group is always striving to reduce this risk by investing in countries where cost of oil production is low, primarily in the Middle East and Africa. Also, the Group’s strategy is to increase the number of services offered.
Financial risk management: The Group has exposure to a variety of financial risks, namely credit risk, liquidity risk, market risk (including changes in foreign exchange rates, interest rates and market prices) and operational risk arising from the Group’s international operations. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. A detailed review of the risk management policies employed by the Group is included in Note 35 to the financial statements.
Financial performance
The Group’s turnover for the year amounted to €66,939,160. The Adjusted EBITDA of the Group amounted to €11,404,765. After recognising depreciation amounting to €7,627,211, amortisation of intangible assets of €2,056,371, impairment loss on intangible assets of €1,774,446, impairment loss on goodwill of €372,295 and net impairment loss on property, plant and equipment amounting to €515,210, the Group sustained an operating loss amounting to €940,768. After adding the net finance income amounting to €964,139, the Group registered a profit before tax of €23,371. Profit for the year after accounting for taxation €544,876.
Cash generation from operations remained stable across the entire Group and during the year amounted to €20,015,919.
The Group’s Adjusted EBITDA performance improved in the second half of the year compared to the first half particularly due to a general improvement in the business environment as the COVID-19 pandemic began to wind down and demand for energy increased. Additionally, the award of new contracts in Egypt contributed further to this improved performance.
Revenue
The Group’s revenue was generated as follows:
Operating Segment
%
Integrated Logistics Support Services (ILSS)
64%
Oil Country Tubular Goods (OCTG)
35%
Photovoltaic income
1%
MedservRegis p.l.c.
Directors’ Report (continued)
x
Cost of sales and administrative expenses
The cost of sales of the Group for the year amounted to €56,108,752. Cost of sales also include amortisation of intangible assets of €2,056,371, impairment loss on intangible assets of €1,774,446, impairment loss on goodwill of €372,295 and net impairment loss on property, plant and equipment amounting to €515,210.
Other income amounting to €1,095,755 is mainly made up of the foreign exchange differences during the year. Other expenses mainly include the loss on disposal of property, plant and equipment of €325,303. The increase in administrative expenses over last year is mainly due to last year's accounting for the reverse acquisition (refer to “Reverse acquisition” section in the first part of the directors’ report). In addition, during the year, the Group continued its investment in its business development with the objective of participating in new tenders as opportunities presented themselves.
The Group - Financial key performance indicators from continuing operations
Year
2022
Year
2021
€ Million
€ Million
Total turnover
66.94
29.92
- Integrated Logistics Support Services (ILSS)
42.99
20.23
- Oil Country Tubular Goods (OCTG)
23.42
8.18
- Photovoltaic Farm
0.53
0.22
- Trading Activity
-
1.29
Adjusted EBITDA
11.4
5.36
Profit/(Loss) from continuing operations
0.54
(7.30)
Net cash generated from operating activities
20.01
3.54
Cash and cash equivalents
18.66
9.11
Total Equity
60.36
62.82
Balance sheet total
151.73
150.79
Capital expenditure
(2.65)
(1.98)
Adjusted EBITDA margin in %
17.04%
17.91%
Net debt to Adjusted EBITDA
4.69
11.25
Debt to total Equity ratio*
1.21
1.15
EPS
0c57
(13c7)
Average number of employees for the year
716
609
* debt to equity is worked out by dividing loans and borrowings by total equity
Financial position
The consolidated equity attributable to the owners of the Company as at 31 December 2022 amounted to €57.63 million. The equity attributable to the owners of the Company as at 31 December 2022 amounted to €21.3 million.
Dividends
 
No reserves are available for distribution.
Reserves
Retained earnings/(accumulated losses) amounting to €23.9 million and (€28.63 million) for the Group and the Company, respectively, are being carried forward.
MedservRegis p.l.c.
Directors’ Report (continued)
xi
Future developments
The Group’s strategy remains to continue with its growth trajectory in geographic markets, client base and product offering. Particular emphasis and investments will be made in the METS operations by way of increasing capacity in the UAE by installing a third machine in Sharjah and opening a new facility in Abu Dhabi.
The Group is participating in several tenders and evaluating projects in both existing and new markets, particularly in Africa and the Middle East, most of which are being driven by the Group’s existing clients.
Events occurring after the end of the accounting period
The war in Ukraine to date had no material impact on the Company’s operational capacity, financial performance and financial position. Nor has it sustained any threats of any nature on the Company’s modus operandi. The Company’s geographical position is mainly in the Mediterranean, Sub-Saharan Africa, Middle East and the Caribbean region. The directors do not foresee any direct or indirect impact on its business arising from the war in Ukraine.
Subsequent to year end, the Company has redeemed the 2023 6% Secured Notes bearing ISIN MT0000311218 on 7 January 2023 using the proceeds from the newly issued 5% 2029 Secured Bonds to settle the outstanding payments. The proceeds from the new note issue were held by the security trustee as at 31 December 2022 and utilised for this redemption.
On 15 January 2023, Medserv Cyprus Limited, has been awarded a new contract with Chevron Cyprus Limited for the provision of operational base support services from our facilities in the port of Limassol, Cyprus. The award of this contract is another example of the trust that major industry players place in the Company and improves the continuity of its business in Cyprus. Additionally, Medserv International Limited has been awarded a new contract by a major international energy company for the provision of integrated logistics services in Morocco. This contract is for a period of 9 months and may be extended for another 3 additional months.
On 22 February 2023, Middle East Comprehensive Tubular Services LLC has been awarded a new contract by a major international oil company for the provision of logistics bases and associated services in Duqm, Oman. The contract is for a period of two years and may be extended for an additional two periods of twelve months each. On 2 April 2023, Middle East Comprehensive Tubular Services LLC has signed an additional site of 25,060 sq. meters in the Port of Duqm for a period of five years renewable for a further period of five years.
In April 2023, Middle East Tubular Services (Iraq) Ltd has signed a five-year framework agreement with a lead contractor responsible for the operation and development of MISSAN oilfields for the provision of tubular services and inspection.
Outlook
The Group’s performance in year 2023 is expected to remain broadly in line with that in 2022 with improved results in some regions. Despite the recent reduction in energy commodity prices, levels continue to be higher than previous years and they are expected to remain at the current prices. This results in significant profits being registered by the International Energy Companies and will potentially provide the necessary stimulus for a major increase in new projects in the sector, particularly in the geographical areas of operations of the Company, being Mediterranean, Africa and the Middle East regions.
With the need for governments to ensure their energy security the Group expects more projects to reach final investment decision (FID) in 2023 particularly the development of natural gas infrastructure. The Group anticipates that the Mediterranean basin will be a very active area in the next three to five years with European markets seeking to replace Russian pipeline imports. The growing activity in that region bodes well for the continuation of operations in one of the Group’s strongest positioned regions.
MedservRegis p.l.c.
Directors’ Report (continued)
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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.
The Group remains poised for achieving further profitability without the need of significant additional capital expenditure. The Group’s operational reach in Africa, Europe, Middle East and South America is presenting unprecedented opportunities for both ILSS and OCTG business segments.
Going concern
As required by Capital Markets Rule 5.62, upon due consideration of the Group’s and Company’s performance and statement of financial position, capital adequacy and solvency, the directors confirm the Group’s and Company’s ability to continue operating as a going concern for the foreseeable future.
Auditors
PricewaterhouseCoopers expressed their willingness to continue in office. A resolution proposing the reappointment of PricewaterhouseCoopers as auditors of the Company will be submitted at the forthcoming annual general meeting.
DISCLOSURE IN TERMS OF THE CAPITAL MARKETS RULES