Following the contract awarded to Medserv Egypt by BP Exploration for the provision of material and warehouse management services announced to the market on the 28 January 2021, Medserv plc has announced that Medserv Egypt has been awarded a second contract by BP. This contract, for the Integrated Facility Management of the West Nile Delta Site in Idku, Egypt represents the largest award in value terms secured by the Company in Egypt to date.
The contract will take effect in June 2021 for a term of three years with an option for BP to extend the term by a further year. It is expected that this contract will be serviced through Medserv’s internal resources and will not require major capital expenditure.
The Company continues to secure new business in this significant and growing Eastern Mediterranean energy bloc.
In addition, last week the Company also published its interim report. The results for the first half of year 2021 continue being impacted by the COVID-19 pandemic particularly in the offshore drilling projects. This was mainly due to the inability to provide a safe working environment, consequent to travel bans and closure of ports imposed by Governments. Major projects for which the Company is already contracted are expected to resume in the majority of its operating regions before year end with increased activity and volume in year 2022. These energy projects are of a long-term nature and require integrated logistics support services throughout the project life cycle.
Despite the turmoil experienced in these last twelve months Medserv has strengthened its business pipeline both organically and through acquisition and continues to maintain its growth trajectory. Apart from establishing a footprint in Sub-Saharan region through the proposed transaction with Regis Holdings Limited as announced last month, the Company continues to participate in tendering opportunities both in Suriname and neighbouring countries.
The Company’s objective is to continue to deliver value to its customers. This current environment demands a new operating model of better collaboration and integration across all the players within the supply chain. The proposed consolidation of Medserv and Regis, two similar groups operating in two different geographical markets, will strengthen the new Company’s market position and broaden its geographical footprint in strategic locations around the Mediterranean region, in the Middle East, Sub-Sahara Africa and Suriname. The global reach of Medserv – Regis will be in four continents, present in twelve countries and operating twelve bases. The transaction will also allow the Company to restructure its debt as the Company’s equity base will significantly improve as new cash is injected. The gearing level will reduce, offering the Company various options to finance its growth.