An interim statement issued by the Board of Directors at Medserv plc reports that whilst revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) were significantly lower than that reported for the same period last year, a strong pipeline of contracted work is in place which will see the performance of the company return to pre-Covid-19levels in 2021.
EBITDA registered for the reporting period is in line with budget and adequately covers the Company’s finance costs. The Company also expects the results for the year to be in line with the published forecasts. The results reported were due to the suspension of work and postponement of new contracts due to the COVID-19 pandemic which resulted in the suspension of most of the offshore drilling activity in the second quarter of 2020, mainly due to the inability of providing a safe working environment, consequent to travel bans and closure of ports imposed by Governments.
The Company however reports that Medserv has significant growth potential in all its operating markets and has a substantial business pipeline stemming from the existing long-term contracts. The mega development project for the installation of production platforms offshore Libya is on track to commence late next year. This project is expected to be completed over the coming years. Drilling in Cyprus is to resume in the second half of the year and to continue through to 2022. The order book in the Middle East is also forecasted to strengthen in the second quarter of 2021 to reach pre-COVID-19 levels.
The large finds in Guyana, Trinidad and Tobago, as well as the recent discoveries and future planned activity in Suriname makes this region an exciting growth area for the oil and gas industry. The Company has signed a Memorandum of Understanding (MOU) with Kuldipsingh Port Facility N.V which will allow the Company to effectively participate in the upcoming business in this region. Kuldipsingh is the private port operator from which Medserv carried out the logistical support for the Staatsolie Nearshore Drilling project in Suriname last year.
In addition to the contracted works which were postponed due to the Pandemic, the Company continued to secure new work in the second half of this year across the Group. The Company has also participated in new tenders in Egypt and two new African markets which are at an advanced stage of being adjudicated.