MedservRegis Plc

Management Reports • Nov 11, 2022

COMPANY ANNOUNCEMENT

MEDSERVREGIS P.L.C. (THE "COMPANY")

Updated Financial Analysis Summary

Date of Announcement	11 November 2022
Reference	278/2022
Listing Rule	LR 5.16

Quote

The Company announces that is has updated the financial analysis summary to take into account the revised forecast for the year ending 31 December 2022 and the projections for the year ending 31 December 2023.

The said update to the financial analysis summary is available for inspection at the Company's registered office and on the Company's website: www.medservregis.com

Unquote

Laragh Cassar Company Secretary

Annex 2 - Financial Analysis Summary

The Board of Directors MedservRegis p.l.c. Malta Freeport, Port of Marsaxlokk, Birzebbugia, BBG3011 Malta

9 November 2022

Dear Sirs,

MedservRegis plc –Financial Analysis Summary (the "FAS")

In accordance with your instructions, and in line with the requirements of the MFSA Listing Policies, we have compiled the FAS set out on the following pages and which is being forwarded to you together with this letter.

The purpose of the FAS is that of summarising key financial data appertaining to MedservRegis plc (the "Issuer") in relation to the €13 million 5.0% Secured Bonds 2029 issued by the Company in 2022.

The data in this FAS is derived from various sources or is based on our own computations as follows:

• (a) Historical financial data for the three years ended 31 December 2019 to 2021 extracted from the Issuer's audited statutory financial statements for the three years in question;
• (b) The forecast data for the financial year ending 31 December 2022 and projections for the year ending 31 December 2023 has been derived from the financial information provided by the management of the Issuer;
• (c) Our commentary on the results of the Issuer and on its financial position is based on the explanations set out by the Issuer in the audited financial statements and assisted by management of the Issuer;
• (d) The ratios quoted in the FAS have been computed by us applying the definitions set out beneath each ratio; and
• (e) Relevant financial data in respect of other issuers with same-maturing bond issues as analysed in Part D of this report has been extracted from public sources such as the web sites of the companies concerned or financial statements filed at the Registry of Companies.

The FAS is meant to assist existing and potential investors by summarising the more important financial data of the Issuer. The FAS does not contain all data that is relevant to potential investors and is meant to complement and not replace financial and/or investment advice. The FAS does not constitute an endorsement by our firm of the listed bonds that the Issuer has outstanding on the Official List of the Malta Stock Exchange and should not be interpreted as a recommendation to invest in the bonds or otherwise. We shall not accept any liability for any loss or damage arising out of the use of the FAS and no representation or warranty is provided in respect of the reliability of the information contained herein. Potential investors are encouraged to seek professional advice before investing in the Issuer's securities.

Yours sincerely,

Vincent E Rizzo

Director

TABLE OF CONTENTS

FINANCIAL ANALYSIS SUMMARY 9November 2022

Prepared by Rizzo, Farrugia & Co (Stockbrokers) Ltd, in compliance with the Listing Policies issued by the Malta Financial Services Authority on 5 March 2013 and last updated on 21 August 2021.

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

IMPORTANT INFORMATION

• PART A BUSINESS & MARKET OVERVIEW UPDATE
• PART B FINANCIAL REVIEW
• PART C LISTED SECURITIES
• PART D COMPARATIVES
• PART E GLOSSARY

IMPORTANT INFORMATION

FAS

Issuer Company Group''

Bond Issue

LIST OF ABBREVIATIONS

AES	Angola Environmental Servicos Lda
BP	BP plc
BP Egypt	BP Exploration (Delta) Limited
CPF	Central Processing Facility
EBITDA	Earnings before interest, tax, depreciation, and amortisation
Eni	Eni S.p.A.
IEA	International Energy Agency
IEC	International Energy Companies
IEOC	IEOC Production B.V. (Eni's subsidiary in Egypt)
ILSS	Integrated Logistics Support Services
MedOps	Medserv Operations Limited
MOG	Mellitah Oil & Gas B.V. (Libyan Branch)
OCTG	Oil Country Tubular Goods
OPEC	Organisation of the Petroleum Exporting Countries
PDO	Petroleum Development Oman
RUL	Regis Uganda Limited
SONILS	Sonangol Integrated Logistics Services Lda
Sumitomo	Sumitomo Corporation Middle East FZE
TotalEnergies	TotalEnergies SE
UAE	United Arab Emirates

IMPORTANT INFORMATION

PURPOSE OF THE DOCUMENT

MedservRegis plc (the "Issuer" or the "Company" or the "Group'') is issuing €13 million 5.0% Secured Bonds 2029 pursuant to a prospectus dated 9 November 2022 (the "Bond Issue"). This Financial Analysis Summary ("FAS") is being issued in line with the requirements of the Listing Policies of the Malta Financial Services Authority dated 5 March 2013 and last updated on 21 August 2021. The purpose of this report is to provide information on the performance and on the financial position of the Company.

SOURCES OF INFORMATION

The information that is presented has been collated from a number of sources, including the Company's website (www.medservregis.com), the audited Financial Statements for the years ended 31 December 2019, 2020 and 2021, forecasts for financial year ending 31 December 2022 and projections for financial year ending 31 December 2023.

Forward-looking financial information included in this document have been prepared and approved for publication by the directors of the Company, who undertake full responsibility for the assumptions on which these forecasts are based.

Wherever used, FYXXXX refers to financial year covering the period 1 January to 31 December. The financial information is being presented in thousands of Euro, unless otherwise stated, and has been rounded to the nearest thousand.

PREVIOUS FAS I SSUED

The Company has published the following FAS which are available on its website:

• x FAS dated 30 August 2013 (appended to the final terms)
• x FAS dated 15 May 2015 x FAS dated 18 May 2016
• x FAS dated 22 May 2019 x FAS dated 15 July 2020
• x FAS dated 28 June 2021 x FAS dated 26 July 2022
• x FAS dated 7 April 2014 (appended to the final terms)
• x FAS dated 5 April 2017 x FAS dated 11 May 2018
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2 COVID-19

EBITDA

PART A BUS INESS & MARKET OVERVIEW UPDATE

1 UPDATE ON THE OIL AND GAS INDUSTRY

The global oil and gas industry has undergone significant changes in the past few years, mainly driven by a period of rebalancing in inventories, a pandemic-fuelled economic recession, and a marked shift across the globe towards the increased use of sustainable, renewable, and more environment-friendly sources of energy. In 2021, the International Energy Agency ("IEA") published a detailed report which describes the changes in energy demand and energy mix if the world is to achieve net-zero emissions by 2050, including the eventual halt to new oil and gas exploration projects1 . The forecasted changes in demand combined with the complex and changing political situation in the Middle East and North Africa, makes the oil and gas sector an extremely challenging business for every company that is dependent on it.

The Organisation of Petroleum Exporting Countries ("OPEC") is composed of 13 member countries, which together hold an estimated 80.4% of the world's proven oil reserves2 . Along with some of their industry allies such as Russia, Azerbaijan and Oman, they are collectively referred to as OPEC+. The OPEC+ countries represent the majority of the world oil production, which was about 57% in 2016 and declined to 51% in 2020. OPEC+ market share is expected to recover to above 52% by 2026 and continue to increase thereafter as non-OPEC+ countries shift to other energy sources.

The fundamental challenge for this industry remains the intrinsic volatility within the sector. International Energy Companies ("IEC") need time to address the swings of an over- or under-supplied market and develop a resilient strategy to mitigate the risks related thereto. This uncertainty leads to caution threading by the oil and gas companies who in recent years have curbed their investment for a while, assessing the right opportunity that is indicative of stabilisation of the industry dynamics.

The IEA expects world oil demand for 2022 to increase by 1.8 mb/d (million barrels per day) on average to 99.4 mb/d. Russia's invasion of Ukraine since February 2022 presented major disruptions to the industry as various countries opted to impose sanctions on Russian fuels. By June 2022, the European Union agreed on six packages of sanctions which are set to ban about 90% of Russian oil imports to the EU.

Meanwhile, the interest in drilling activity by the large IECs continued in the east Mediterranean following various gas finds in the waters between Egypt and Cyprus, which offer substantial opportunities for the provision of Integrated Logistics Support Services ("ILSS") within the region.

From an oil price perspective, Brent crude exceeded pre-pandemic levels of around \$60 to \$70 per barrel during 2021 and continued to climb following an extensive global vaccination programme and various fiscal incentives as well as accommodative monetary policies, which boosted economic activity and led to increased demand for oil. As a result, the oil price hovered around the \$80 per barrel level by the end of 2021. Russia's invasion of Ukraine towards the end of February 2022 led to a further uplift in the price of oil as the various

¹ IEA, Net Zero by 2050, May 2021

² OPEC share of world crude oil reserves, 2021: https://www.opec.org/opec_web/en/data_graphs/330.htm

sanctions imposed on Russian fossil fuelled by the governments of major economies led to a sharp reduction in the supply for oil and gas. In fact, in March 2022, Brent crude even reached a 15-year high of almost \$140 per barrel and continued to trade above the \$100 level until September:

Source: Refinitiv Eikon

2 COVID-19

The COVID-19 pandemic resulted in the creation of significant uncertainties within the energy industry, which consequently necessitated the Group to take quick and tough decisions. The pandemic also led to the suspension of most offshore drilling and mining activities from Q2 2020 to Q4 2021, due to the inability to provide a safe working environment.

Throughout the worst phase of the pandemic, the Group's main objective was to preserve liquidity and ensure that it continues to register positive earnings before interest, tax, depreciation, and amortisation ("EBITDA"). In this respect, immediate cost containment measures were put in place across all the Group's operations. These included restructuring to the new norm and postponing any capital expenditure plans. Such measures ensured that MedservRegis had sufficient funds to meets its obligations through the course of 2020 and 2021. Furthermore, the Group also benefitted from a number of schemes adopted by the various governments where the Group operates to mitigate the significant economic and financial repercussions from the COVID-19 pandemic.

MOG

OCTG

3 KEY RECENT DEVELOPMENTS AND OUTLOOK FOR 2022 AND 2023

TRANSACTION WITH REGIS HOLDINGS LIMITED

As economic activity across the world started to rebound in the second half of 2020, the Group sought opportunities to consolidate its market position, broaden its geographic footprint in strategic locations, and strengthen its financial position. To this effect, an agreement was reached with Regis Holdings Limited ("Regis") in April 2021 for the two companies to join forces and create a truly global player that will allow the combined entity to successfully respond to the deep changes taking place in the energy market. Through its subsidiaries, Regis provides logistics, 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 in South Africa, Mozambique, Uganda, and Angola.

Following the completion of the share for share exchange with Regis on 25 June 2021, the global outreach of MedservRegis now spans across four continents, comprising a presence in twelve countries and operations out of twelve bases.

In addition, the trading prospects of Medserv plc following the transaction with Regis will enable the combined Group to:

(i) present an integrated logistics solution to its customers in the Sub-Saharan region whilst also allow it to participate in some significant upcoming logistics projects in Africa;

(ii) offer energy companies mill-to-well supply chain management services in new jurisdictions whilst also onboard new clients operating in other sectors with a view of reducing the overall exposure and reliance on the energy segment;

(iii) cross-sell in new countries;

(iv) increase its geographical, product, and client spread, thus contributing to reducing the Group's concentration risks as a result of increased diversification whilst also reducing the fluctuations in earnings and improve underlying profitability; and

(v) strengthen the financial and equity base in support of its growth ambitions and targets.

MEDITERRANEAN OPERATIONS

MALTA OPERATIONS (INCLUDING LIBYA BRANCH)

In recent years, the Malta base continued to provide shore base services for the development of offshore Libya projects. Despite the ongoing political and hostile environment currently ensuing in Libya, management is confident that the Company will remain the shore base for all oil and gas operations offshore Libya. This is because the Company's base in Malta is seen as a reliable and safe haven for the storage and mobilisation of oil field equipment employed by companies engaged in offshore Libya projects.

Following the completion of the Bahr Essalam Phase II project in August 2019 (which was Libya's largest offshore producing gas field), MedservRegis will be acting as the logistics base for the development of new gas offshore structures for Mellitah Oil & Gas B.V. (Libyan Branch) ("MOG") which, in turn, is a joint venture between the Libyan National Oil Corporation and Eni North Africa B.V. In aggregate, MedservRegis will be providing the necessary logistics for MOG's projects involving the drilling of over 30 wells. These projects are now expected to start during year 2023. In addition to the provision of ILSS, the Company's contract with MOG also covers the management of a considerable volume of Oil Country Tubular Goods ("OCTG") and related equipment.

In March 2020, the Company signed a long-term agreement with Air Liquide Oil & Gas Services Ltd to install and operate a compressed gases filling plant to provide diving and welding gases to the offshore industry in the Mediterranean basin. After obtaining necessary permits, the facility was installed at MedservRegis' base at the Malta Freeport and operations commenced in Q4 2020.

Also in 2020, the Company was awarded a contract by Eni to provide logistics marine base and associated services for its oil and gas activities taking place offshore Libya. The term of the contract is three years with the option for Eni to extend for a further year and came into effect on 1 January 2021. Moreover, MedservRegis was also awarded a contract by OMV AG (a multinational integrated oil and gas company headquartered in Vienna with operational activities in the onshore Murzuk and Sirte basin of Libya) to provide international freight forwarding services including the transportation of goods and drilling related equipment from global sites to specified locations in Libya through the facilities that MedservRegis has at the Malta Freeport. The framework agreement entered into force on 30 October 2020 and is for a duration of three years with the option to extend for a further two years.

As such, the Malta base which also supports the activity offshore Libya continued to serve the aforementioned business in 2021, although much of the activity related to the contracts with MOG and Eni North Africa was suspended throughout the year due to COVID-19 coupled with the political instability in Libya. Nonetheless, as the Company managed to renew its contracts with its two major clients operating offshore Libya for the coming years, the Malta base is expected to continue acting as the logistics hub for such activity going forward, including the installation of structures for MOG which represents the key operating activity for the Group out of its base located in the Malta Freeport.

CYPRUS OPERATIONS

Following the end of the first phase of drilling of the ExxonMobil campaign, Medserv Cyprus went into nonactive mode on 1 April 2019. During this phase, ExxonMobil have requested that Medserv Cyprus continues providing a number of services, including the storage of their equipment at the Limassol base.

In 2019, Medserv Cyprus was awarded another logistics contract by TotalEnergies E&P Cyprus BV who were expected to drill 2 wells in Block 11 as the operators in a joint venture with Eni Cyprus in April 2020. The Company is contracted to provide its services from its facilities in the port of Limassol. The award of this

MIDDLE EAST OPERATIONS

PDO

Sumitomo

contract was another major step to broaden the Company's oil and gas client portfolio within the Eastern Mediterranean region.

2020 and 2021 were characterized by the COVID-19 pandemic. In 2020, the Company incurred significant operational losses given that the personnel it recruited from the period of November 2019 had to be let go during 2020 when the projects were postponed after notice was received by Eni due to the port closures as a result of COVID-19. Similarly in 2021, the Company was again active in Q4 of the year, supporting ExxonMobil in its drilling campaign of one well in Block 10, with ramping up of operations taking place between October and November 2021 and the activity starting officially mid-December 2021 until completion in June 2022. During the non-active period in 2021, Medserv Cyprus still provided a number of logistic and inspection services.

Meanwhile, Eni/TotalEnergies have started drilling again in Block 6 on the 'Cronos-1' prospect. Eni and TotalEnergies are collaborating together on this project with Eni who holds a participating interest of 50% acting as the operator while TotalEnergies has the remaining 50%. The well was spudded at the beginning of June 2022 and was completed by the end of July 2022. This drilling campaign started in March 2022 with the preparation work at the supply base for the drilling. The Company's contract with Eni Cyprus has been extended during the year until 18 June 2023 however management is cautiously anticipating a lower level of activity throughout 2023 on the back of expected shorter drilling campaigns. Nonetheless, going forward, Cyprus is expected to take a central role in the oil and gas industry in the Mediterranean basin and has other business opportunities should arise.

EGYPT OPERATIONS

IEOC Production B.V. ("IEOC") Contract

The contract with IEOC Production B.V. ("IEOC") expired on 31 December 2020 and was extended until 30 June 2021. This resulted in a downsize in the scope (i.e. equipment provided to IEOC) which took place during the contract extension beyond June 2021. Another reduction in scope took place in September 2021 through another addendum which extended the contract to June 2022. The current IEOC contract was again extended in May 2022 until 31 December 2022.

BP Egypt Contracts

The Company secured two 3+1 year contracts with BP Egypt in 2021 – the first one was awarded in January 2021 whilst the second contract was awarded in May 2021. Similar to the IEOC contract, the BP Egypt contract provides for fixed monthly rates for the provision of equipment and manpower.

Under the scope of the first contract with BP Egypt, the Company performs Integrated Materials Management and Warehousing Services for BP Egypt in Idku. The second contract, which covers an Integrated Facility

Management of the West Nile Delta Site in Idku, namely consists of the provision of the management, mobilisation and delivery of all hard and soft facilities management, maintenance and catering services.

MIDDLE EAST OPERATIONS

OMAN OPERATIONS

In January 2017, Sumitomo Corporation Middle East ("Sumitomo") announced the extension of their contract to supply OCTG's to Petroleum Development Oman ("PDO") for a further 5 years. Sumitomo first started supply of OCTG including Supply Chain Management services to PDO, the Sultanate's largest oil and gas producer, in 2003. Since then, the companies have enjoyed a continuous and mutually beneficial relationship.

As a result, in February 2017, METS was awarded the Sumitomo contract for a period of five years with a fiveyear renewal option and a new METS company (METS Duqm) was established. Consequently, the Company set up a new facility of 119,622 sqm at the port of Duqm in order to be able to cater for the significant increase in volumes of product to be handled and ensuing business.

In Oman, the demand for seamless OCTG has increased slightly during 2021 compared to 2020 at the height of the pandemic, and this can be confirmed by the volumes of OCTG handled by both the company and the group entity in Sohar.

Oman OCTG volumes are on the increase as PDO intensifies its drilling program from 600 wells drilled annually to over 800 wells to be drilled starting in August 2023 and reach 1,000 wells drilled annually in 2025/2026. As this schedule increases in volume coupled with the current international disruption in the shipping lines calling at Duqm Port, Sumitomo are occasionally using Sohar yard for OCTG goods. Consequently, in January 2022 METS Sohar signed a five-year agreement with Sumitomo to provide import product management and storage facilities for 30,000MT of OCTG.

During February 2022, Marubeni has been awarded a three-year tubing supply contract with Oman Oil in the North. Average materials will be 15,000MT per year. Marubeni confirmed that they will be using METS Sohar for the OCTG incoming management until customer call-off. The amount of OCTG handling at Duqm in FY2022 is expected to be a record high for the company, while that for FY2023 is expected to be aligned to historic averages.

UNITED ARAB EMIRATES OPERATIONS

In September 2020, METS UAE secured a new contract with Tenaris in Abu Dhabi for the supply of tubular handling, equipment, yard and inspection services. This award was the result of the exceptional work done for Tenaris over the past years. The contract is for a period of 3 years starting 1 October 2020 until 30 September 2023. The contract may be extended for an additional term of 1+1 year upon written agreement between the parties.

RUL

The new management drive following the merger with Regis and the improved market conditions are expected to surpass the Company's revenues generated in previous years and register a profit in both 2022 and 2023, inclusive of METS UAE share of corporate costs. The main contributors for this improvement are the increase in the machine shop order book and increased demand for services by Tenaris in Abu Dhabi.

IRAQ OPERATIONS

In 2021, the Company managed to regain the position and generate an adequate amount of revenue from machine shop. In fact, during 2021, the Company generated revenues of \$3.2 million (2020: \$1.9 million). Management explained that while machine shop services increased by 92% and inspection revenue dropped 89% over that of 2020, revenue from handling and storage increased by 59% as a result of the Company's ability to secure a number of rig storage packages during the year.

During 2022, BP continued to remain a significant generator of the Company's revenue but through management efforts the Company increased its client base and managed to secure new clients and generate substantial new revenues both in machine shop orders and storage and handling of rigs. In fact, the Company is projecting to generate \$4 million in terms of revenues during 2022 which represents a 25% increase over that generated during the prior year, with 58% of revenue to be generated from the Company's machine shop and the remaining 42% from handling and storage of rigs. A similar performance is expected for FY2023.

AFRICAN OPERATIONS

ANGOLA OPERATIONS

Business in Angola is conducted through Regis Management Services Ltd which is based in Mauritius. The main clients of Regis Management Services are Sonangol Integrated Logistics Services Lda ("SONILS") and Angola Environmental Servicos Lda ("AES") with which Regis Management Services has yearly contracts.

Regis Management Services acts as a 'one stop solution' with an emphasis on global procurement and logistics. It procures a wide range of products and services for its clients including personal protection equipment, valves, piping, heavy machinery, computer equipment and pre-engineered steel structures. The company also contracts staffs to its clients and provides technical services. In addition, the company provides comprehensive procurement services from sourcing to delivery as per client requirements.

Despite the fall in revenue over the past couple of years mainly attributable to COVID-19, the business is expected to sustain a minimum level of revenue given its agreements with clients. Furthermore, the economic activity in Angola is expected to start recovering in 2022 with rising oil prices and the gradual loosening of output cuts implemented when demand for oil collapsed in 2020. Management anticipate the level of business achieved in FY2022 will be retained in FY2023.

MOZAMBIQUE OPERATIONS

Regis Mozambique is a fully owned subsidiary of MedservRegis plc (indirect holding via Regis Holdings Limited and Regis Management Services Limited). It operates a fully-fledged logistics facility in Pemba, Mozambique. The size of this Logistics Service Centre is approximately 50,000 sqm. The Cabo Delgado province in Northern Mozambique has seen major discoveries of natural gas and graphite over the last numbers of years and Regis Mozambique is well located to serve these projects.

The company provides laydown facilities and integrated logistics solutions to the multinational subcontractors and local contractors working for the international energy companies. The company also provides rental of equipment and manpower to Syrah Resources Limited, the Australia-based industrial minerals and technology company engaged in the production of natural graphite products from Balama Graphite Operation in Mozambique.

Despite the operational challenges presented by COVID-19 and the declaration of force majeure by TotalEnergies, following the Jihadist insurgency in Cabo Delgado province in early 2021 threating regional security the company has remained fully operational and continued to service its clients.

Oil and gas activity in this African region is expected to resume during the second half of 2023.

UGANDA OPERATIONS

Regis Uganda Limited ("RUL") represents Regis' early penetration in Uganda in anticipation of the construction of a 1,440 km crude oil pipeline from Uganda's Albertine region to Tanzania's seaport of Tanga. RUL imported a fleet of equipment to establish a logistics service centre to service the oil and gas industry and the technical service providers to general heavy industry. Activity is expected to increase significantly as a result of the recent final investment decision to start construction of the pipeline.

RUL provides integrated logistics services and all lifting and materials handling related support in Uganda. The company has a fleet of cranes and forklifts. The Group has invested heavily in Uganda and have a dedicated service base in Kampala, procuring its own fleet and local workforce. The company has been engaged on several infrastructure-related works, including positioning of flyover bridges in Kapchorwa, a similar project in Kampala, as well as construction works aligned to the sugar industry in Jinja.

Despite the operational challenges presented by COVID-19, the company remained fully operational and during the pandemic continued to service its clients.

Management expects the results for year 2022 to improve over year 2021 as the company has signed a conditional letter of intent with a major OCTG supplier for the provision of OCTG associated services in relation

5 GOVERNANCE & MANAGEMENT

6 GROUP STRUCTURE

to the call for tender issued by TotalEnergies for its Tilenga projects.3 Further revenue increases are expected to be registered in Uganda during FY2023 in line with the anticipated ramp-up in business activity.

In addition, the company leased a site measuring 24,000 sqm to set up a new base for the upcoming projects in Uganda. The land is located in the Buliisa district, 4km away from the Central Processing Facility ("CPF") being developed by TotalEnergies. This site will be developed into a logistics facility providing a staging point and supporting solution to TotalEnergies CPF facility.

4 KEY CLIENTS AND CONTRACTS

The Group identifies Eni, Sumitomo, and BP as its major key clients.

In the case of Eni, the relationship extends over 40 years and involves a number of independently operated entities forming part of this Group. Notwithstanding this, the Issuer has been gaining recognition internationally with other blue-chip IECs and sub-contractors, and these are now contracting the Group companies for various drilling and exploratory projects.

Following the acquisition of METS in February 2016 and the large contract awarded to METS Oman in February 2017, Sumitomo also became a key client of MedservRegis. Similarly, the volume of business with BP increased significantly in 2021 following the award of long-term contracts in Egypt. However, prior to the award of these long-term contracts, through its shareholding in METS, MedservRegis already had a strong business relationship with BP as the latter represented the primary source of revenue for the Company's operations in Iraq.

³ Further information about the Tilenga project is available at: (i) https://totalenergies.com/projects/liquids-low-carbon-fuels/tilenga-andeacop-acting-transparently; and (ii) https://totalenergies.com/sites/g/files/nytnzq121/files/atoms/files/uganda-projects_introduction.pdf.

5 GOVERNANCE & MANAGEMENT

BOARD OF DIRECTORS ROLE Mr Anthony S. Diacono Executive Chairman Mr Carmelo sive Karl Bartolo Executive Director Mr David O'Connor Executive Director Mr Olivier Bernard Executive Director Dr Laragh Cassar Non-Executive Director & Company Secretary Mr Keith Grunow Non-Executive Independent Director Mr Jean Pierre Lhote Non-Executive Independent Director Ms Monica De Oliveira Vilabril Non-Executive Independent Director

The Board of Directors is currently composed of the following directors:

On 25 June 2021, pursuant to the completion of the share for share transfer, Mr Anthony J. Duncan, Mr Etienne Borg Cardona and Mr Kevin Rapinett resigned from their position of directors of the Company. Mr David O'Connor, Mr Olivier Bernard and Mr Keith Grunow were appointed in their stead.

The Executive management of MedservRegis plc is composed of the following:

EXECUTIVE MANAGEMENT	ROLE
Mr Anthony S. Diacono	Chairman
Mr David O'Connor	Chief Executive Officer
Mr Carmelo sive Karl Bartolo	Deputy CEO for Business and Operations
Mr Olivier Bernard	Deputy CEO for Finance, Administration, Investment and Trading
Mr Alessandro Roca	Group Finance Director
Mr Silvio Camilleri	Chief Financial Officer
Mr Edward Farrugia	Chief Information Officer
Mr George Douglas	Chief Health, Safety, Security, Environmental and Quality Corporate Officer
Mr Godfrey Attard	Chief Special Projects Officer
Ms Linda De Beer	Chief HR Officer
Mr Robert Bennett	Chief Business Development Officer

6 GROUP STRUCTURE

The Group is composed of the Issuer, which is the holding company of several subsidiary companies, as shown in the organigram overleaf. MedservRegis plc is continuously working to cross-sell its services across the Group's various geographical locations and client base.

Financial Analysis Summary – 2022 Bond Issue

______ _______

7 MAJOR ASSETS

7 MAJOR ASSETS

The Group's major capital assets are split in three: 'Property, Plant & Equipment' (PPE); 'Intangible Assets & Goodwill'; and 'Right-of-use assets' (ROU).

As at 31 December	FY2019	FY2020	FY2021*
	€'000	€'000	€'000
Property, Plant & Equipment	31,472	27,736	36,052
Buildings & base Improvements	13,512	13,338	13,846
Plant & equipment	12,322	9,845	18,743
PV farm	2,871	2,663	2,474
Cargo carrying units	1,647	1,300	575
Furniture, fittings & office equipment	710	302	306
Motor vehicles	183	53	108
Assets not yet in use	226	235	-
Intangible Assets & Goodwill	11,751	9,836	21,108
Goodwill	2,668	2,403	9,209
Brand	175	147	1,139
Customer Relationships	8,696	7,286	10,760
Licences	212	-	-
Right-of-use assets	75,848	62,190	50,014
Total Major Assets	119,071	99,762	107,174
Total Assets	150,446	121,768	150,786
Major Assets as a % of Total Assets	79.1%	81.9%	71.1%

The below schedule provides a split of the components within each asset class.

*Note: The balance sheet for the year ending 31 December 2021 has been produced taking into account the combination of the Medserv Group and the Regis Group, while the assets listed for FY2019 and FY2020 are of Medserv plc.

Property, Plant and Equipment ("PPE") includes those assets used in the operations of the Group, which in turn are primarily composed of 'Buildings and base improvements' and 'plant and equipment'. The majority of the 'buildings and base improvements' relate to the shore base in Malta and includes warehouses, workshops, open yard facilities and offices. Meanwhile, 'plant and equipment' consist mainly of heavy lifting equipment spread across the Group and fully equipped bulk plant facilities in Malta for the cutting of and storage of cement, barite and bentonite. The value of 'plant and equipment' doubled in FY2021 when compared to FY2020 as a result of the combination of the Medserv Group and the Regis Group. The PV farm is located at the Group's base in Malta and consists of over 8,000 photovoltaic panels producing around 2MWp

PART B FINANCIAL REVIEW

be respectively viewed in the:

8 ISSUER PERFORMANCE & FINANCIAL POSITION OVERVIEW

The share for share transaction with Regis Holdings Limited concluded on 25 June 2021 was considered a reverse acquisition which necessitated the consolidation of Medserv plc into Regis Holdings Limited, as the latter was considered the accounting acquirer in the transaction. As such, the audited financial statements covering FY2021 represented a continuation of Regis Holding Limited's financial statements (which also included a number of business activities which have since been discontinued and do not form part of the merged group). As a result, the income statement for FY2021 was based on a 12-month period of Regis Holdings Limited coupled with only a six-month contribution from Medserv plc (from 1 July 2021 to 31 December 2021). Therefore, the figures for FY2021 are not comparable to the performance of Medserv plc in FY2019 and FY2020.

Review of the performance in FY2019 and FY2020 of Medserv plc (prior to the share for share transaction) can

Note: The analysis for FY2021 was presented in an FAS published by the Company on 26 July 20224

have been made thereto in this FAS.

. No changes

of electricity which is sold back to the local grid. The Group also owns a fleet of cargo carrying units (CCUs), furniture, fittings and office equipment as well as a number of motor vehicles.

The Intangible Assets & Goodwill were first recognised in FY2016 upon the acquisition and consolidation of the METS Group. The intangible assets consist mainly of acquired customer relationships and is being amortised over a period of ten years. The remaining intangible assets are amortised over their useful life. Following the completion of the transaction with Regis, the Intangible Assets and Goodwill more than doubled, primarily due to the increase in goodwill attributable to future customer contracts, the synergies expected to be achieved from combining the operations of both groups, together with their skills and technical talent. The combination of the two groups also led to the recognition of additional customer relationships. Goodwill has been capitalised as an intangible asset and an impairment assessment is carried out at least annually for the trademarks, tradenames, and related assets with an indefinite useful life, and whenever there is an indicator of impairment on all intangibles including the customer contacts and non-contractual customer relationships.

The Right-of-Use Assets relate to the recognition of the leases of the Group's bases, namely in Malta, Cyprus, Oman, UAE and Iraq in line with International Financial Reporting Standards (IFRS 16 – Leases). The majority of the right-of-use assets consist of the revalued property rights held at the Malta Freeport Terminals, which comprise industrial land and the overlying buildings and facilities and the property rights at Hal Far Industrial Estate, which comprise two adjacent plots of industrial land. The valuation of all these property rights was carried out on the basis of market value on the assumption that the property rights could be sold subject to any existing third-party obligations. The right-of-use assets are depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

PART B FINANCIAL REVIEW

The share for share transaction with Regis Holdings Limited concluded on 25 June 2021 was considered a reverse acquisition which necessitated the consolidation of Medserv plc into Regis Holdings Limited, as the latter was considered the accounting acquirer in the transaction. As such, the audited financial statements covering FY2021 represented a continuation of Regis Holding Limited's financial statements (which also included a number of business activities which have since been discontinued and do not form part of the merged group). As a result, the income statement for FY2021 was based on a 12-month period of Regis Holdings Limited coupled with only a six-month contribution from Medserv plc (from 1 July 2021 to 31 December 2021). Therefore, the figures for FY2021 are not comparable to the performance of Medserv plc in FY2019 and FY2020.

Review of the performance in FY2019 and FY2020 of Medserv plc (prior to the share for share transaction) can be respectively viewed in the:

FAS dated 15 July 2020	https://www.medservenergy.com/Fleximanager/Siteimages/editorupload/2020 0715135325519.pdf
FAS dated 28 June 2021	https://www.medservenergy.com/Fleximanager/Siteimages/editorupload/2021 0628142708897.pdf

8 ISSUER PERFORMANCE & FINANCIAL POSITION OVERVIEW

This section provides an analysis of the FY2021 figures. The historic information is in the main sourced from the published annual report as issued by the Group, supported by additional information sourced from management.

The projections for the current financial year ending 31 December 2022 have been prepared by management and are based on the new structure of MedservRegis plc. The forecasts have been based on the key developments that the Group expects to happen during FY2022 and FY2023, as described further in section 3 and below.

Unless otherwise stated, all amounts in the tables below are in thousands of Euro (€'000) and have also been subject to rounding.

Note: The analysis for FY2021 was presented in an FAS published by the Company on 26 July 20224 . No changes have been made thereto in this FAS.

⁴ This may be accessed from https://www.medservenergy.com/Fleximanager/Siteimages/editorupload/20220726151805557.pdf

ILSS OCTG

8.1 INCOME STATEMENT

Note: The FY2021 income statement comprises the first six months of operations of Regis Holdings Limited as well as a six-month contribution (July to December 2021) from MedservRegis plc, as further detailed in Section 8.5 of this report.

	Actual*	Actual*	Actual	Updated Forecast	Projections
for the year ended 31 December	2019	2020	2021	2022	2023
	€'000	€'000	€'000	€'000	€'000
Revenue	68,730	32,412	29,925	54,694	59,216
Cost of Sales	(50,257)	(21,178)	(17,140)	(34,359)	(36,637)
Gross Profit	18,473	11,234	12,785	20,335	22,579
Other income	1,376	2,214	2,286	196	38
Administrative expenses	(7,017)	(7,614)	(8,812)	(8,901)	(8,272)
Impairment loss on financial assets	(69)	(258)	(440)	-	-
Other expenses	(44)	(10)	(544)	-	(194)
Share of profit of equity-accounted investees			29	-	-
EBITDA	12,719	5,566	5,305	11,630	14,151
Depreciation	(7,840)	(7,974)	(4,328)	(6,381)	(6,596)
Impairment on PPE & intangible assets	-	(1,351)	(7,229)	-	-
Amortisation of Intangible Assets	(1,791)	(1,791)	(1,145)	(2,056)	(2,008)
Results from operating activities	3,088	(5,550)	(7,397)	3,193	5,547
Finance income	51	1,043	2,426	-	-
Finance costs	(5,693)	(5,044)	(2,390)	(4,045)	(3,612)
Net finance (costs) / income	(5,641)	(4,001)	36	(4,045)	(3,612)
Loss before tax	(2,553)	(9,551)	(7,361)	(852)	1,935
Tax income / (expense)	(808)	756	58	1,146	(257)
Profit (Loss) from continued operations	(3,361)	(8,795)	(7,303)	294	1,678
Profit from Discontinued Operations	28	-	100	-	-
Profit / (Loss) for the period	(3,333)	(8,795)	(7,203)	294	1,678

*FY2019 and FY2020 relate to the financial performance of Medserv plc before the share for share exchange.

Depreciation and amortisation	Actual	Actual	Actual	Updated Forecast	Projections
for the year ended 31 December	2019	2020	2021	2022	2023
Within:	€'000	€'000	€'000	€'000	€'000
Cost of Sales - PPE & Intangible Assets	(4,528)	(4,564)	(3,657)	(4,843)	(5,154)
Cost of Sales - Right of Use Asset	(4,607)	(4,702)	(1,729)	(3,523)	(3,376)
Administrative and other expenses	(496)	(499)	(86)	(71)	(74)
Total depreciation and amortisation	(9,631)	(9,765)	(5,472)	(8,437)	(8,604)

FY2021 REVIEW

The business conditions during FY2021 were characterised by uncertainties due to the continued suspension of client projects due to the pandemic, the fragmented political situation in Libya and the conflict in northern Mozambique. Meanwhile, the Group was awarded two substantial projects in Egypt which commenced mid-2021 and continued to operate profitably in the Middle East as detailed in section 3.

The Group's total revenues in FY2021 amounted to €29.9 million, of which €11.3 million were generated by Regis Holdings Limited primarily in Sub-Saharan Africa while €18.6 million represent the six-month contribution from Medserv plc through its activities in Malta, Cyprus, Egypt and the Middle East. From a sectoral perspective, most of the income (€20.2 million) was generated from the 'Integrated Logistics Support Services' ("ILSS") while the remaining income was generated by the 'Oil Country Tubular Goods' ("OCTG") segment (€8.18 million), 'Trading Activity' (€1.29 million)5 , and the Photovoltaic farm (€0.22 million).

On the expenditure side, cost of sales amounted to €17.1 million while other costs net of other income amounted to €7.5 million. As a result, EBITDA for FY2021 amounted to €5.3 million.

The financial performance in 2021 was impacted by depreciation and amortisation charges totalling €5.5 million as well as impairments on PPE and intangible assets of €7.2 million. The Group registered an operating loss of €7.4 million.

The Group also accounted for net finance income of €0.04 million as the unrealised currency exchange differences, interest receivables, and net fair value gains of financial assets outweighed the interest charges and other finance costs of the Group.

Overall, the Group registered a pre-tax loss of €7.4 million and a net loss of €7.2 million.

UPDATED FORECASTS FOR FY2022 & PROJECTIONS FOR FY2023

The updated forecasts provided for FY2022 include the full year contribution of the consolidated group and thus give a more appropriate gauge of the business performance of the MedservRegis Group, albeit FY2022 is still expected to be characterised by a number of delays following the suspension of client projects due to the pandemic and the fragmented political situation in some of the regions in which the Group operates in. The situation in FY2023 is expected to continue to generally register an improvement over the performance achieved in FY2022.

Revenues are expected to reach €54.7 million in FY2022 and €59.2 million in FY2023, as exploratory activity resumes.

⁵ Trading activity relates to trading and exportation of agricultural commodities and supplies by Regis Holdings Limited in South Africa. This activity was discontinued following the reverse acquisition.

From a sectoral perspective, the ILSS segment is anticipated to generate the lion's share of revenues in both years, whilst the OCTG segment is the other major income generator.

Revenue generated from operations within the Mediterranean region and the Middle East are expected to each contribute over €20 million for each of FY2022 and FY2023, with the balance expected to be generated from operations within the Sub-Sahara and East Africa.

Within the Mediterranean, the Group's income is envisaged to emanate primarily from improved drilling activity in Cyprus and Egypt as well as from the Malta base where the Group is also offering a number of nonoil and gas services. In the Middle East, most revenues are generated in Oman while in the African continent, the income is predominantly generated from Mozambique and Angola. Moreover, operations at the Group's Uganda business unit are expected to achieve double digit growth following the decision taken by the project's

joint venture partners and Uganda National Oil Company for Uganda's Lake Albert development project in February 2022 that will result in increased activity for this segment as explained further in section 3 above.

The Group is anticipating cost of sales for the two years under consideration to increase largely in line with the growth in business operations to €34.4 million and €36.36 million, respectively (excluding depreciation and amortisation charges). EBITDA is expected to reach €11.63 million and €14.2 million in FY2022 and FY2023, respectively, representing an EBITDA margin of 21.3% in FY2022 and improving to 23.9% in FY2023.

Depreciation and amortisation charges are expected to amount to €8.4 million and €8.6 million in the years under consideration. Net finance costs in FY2022 are expected to reach €4 million, while in FY2023 these are expected to go down to €3.6 million reflecting a full year of refinancing rate differences.

Overall, the Group is anticipating a pre-tax loss of €0.9 million for FY2022 and a pre-tax profit of €1.9 million for FY2023. After accounting for a tax credit in FY2022 and a tax charge in FY2023, profit after tax is expected to be €0.3 million in FY2022 and €1.7 million for FY2023.

8.2 STATEMENT OF CASH FLOWS

Note: The FY2021 statement of cash flows comprises the first six months of operations of Regis Holdings Limited as well as a six-month contribution (July to December 2021) from MedservRegis plc, as further detailed in Section 8.5 of this report.

	Actual	Actual	Actual	Updated Forecast	Projections
for the year ended 31 December	2019	2020	2021	2022	2023
	€'000	€'000	€'000	€'000	€'000
Net cash from / (used for) operating activities	8,675	10,124	6,580	9,834	12,530
Net cash from / (used for) investing activities	(1,171)	(1,680)	(1,893)	(2,443)	(4,054)
Free Cash Flow	7,504	8,444	4,687	7,391	8,476
Net cash from / (used for) financing activities	(9,036)	(3,976)	(5,290)	(7,392)	(7,058)
Net movements in cash and cash equivalents	(1,532)	4,467	(603)	(1)	1,418
Cash and cash equivalents at beginning of the year	2,407	625	8,637	9,107	9,107
Effects of exchange rate fluctuations on cash held	(223)	(414)	1,153	-	-
ECL allowance on cash balances	(27)	(27)	(80)	-	-
Cash and cash equivalents at end of year	625	4,652	9,107	9,106	10,525

FY2021 REVIEW

Similar to the income statement, the statement of cash flows for FY2021 was based on a 12-month period of Regis Holdings Limited coupled with only a six-month contribution from Medserv plc (from 1 July 2021 to 31 December 2021), thus the movement in cash flows in FY2021 are not comparable to those of Medserv plc in FY2019 and FY2020 as presented above. For this reason, the opening cash balance of FY2021 does not tally with the closing cash balance of FY2020.

The Group generated net cash from operating activities of €6.6 million comprising the cash generated from its ordinary course of business, net of bank interest and tax payments.

With respect to investing activities, the Group acquired PPE amounting to €2 million and also incurred a cash outflow of €2.7 million in connection with the disposal of discontinued operations. Meanwhile, the reverse acquisition resulted in a cash inflow of €2.7 million. Overall, net cash used in investing activities amounted to €1.9 million, resulting in free cash flow of €4.7 million.

In terms of financing activities, during FY2021, the Group incurred cash outflows related to interest payments and repayments of bank loans as well as dividend payments (effected prior to the reverse acquisition). Overall, the net cash used in financing activities amounted to €5.3 million, resulting in overall negative cash movements of €0.6 million. However, the Group benefitted from currency exchange differences of €1.2 million on cash held, which ultimately resulted in a cash and cash equivalents balance at end of year of €9.1 million.

UPDATED FORECASTS FOR FY2022 & PROJECTIONS FOR FY2023

The cash flow forecasts for FY2022 (and beyond) include the full year contribution of the consolidated group.

The anticipated net cash from operating activities of €9.8 million and €12.5 million for FY2022 and FY2023, respectively, reflects the growing business activity of the Group following its enhanced presence in strategic locations associated with energy markets as well as the activity related to the several projects that were awarded in recent years as explained in earlier sections of this document.

The Group is envisaging net cash outflows in both financial years 2022 and 2023 from investing activities amounting to €2.4 million and €4.1 million respectively, as it continues to invest in assets that support its various activities. In this respect, the capital expenditure for FY2022 primarily involves the purchase of equipment and the setting up of the new base in Uganda during the year. Additionally, in FY2023 the Group is planning further investments in Mozambique, Uganda and UAE in anticipation of its business pipeline. Furthermore, the Group will also invest in a new Environmental, Health, and Safety software to improve the Group's operational efficiency and reporting, as well as reduce costs and better manage the environmental impact. As a result, the free cash flow for FY2022 is projected to reach €7.4 million and €8.5 million in FY2023.

Meanwhile, in terms of financing activities, the Group is forecasting net cash outflows amounting to €7.47 million reflecting payment of lease liabilities, interest payments as well as the repayment of borrowings in line with the Group's strategy of restructuring its debt, including a partial repayment of its outstanding €20 million 6.00% bond and the refinancing of the balance through another bond issue. The €7.1 million cash outflow from financing activities in FY2023 relate to the payment of lease liabilities, interest payments and loan principal repayments, net of a new bank loan which was drawndown during Q3 2022 to finance the early redemption of part of the Group's outstanding €20 million 6.00% bond.

Overall, the Group is projecting an overall cash inflow amounting to €1.4 million over the two-year period under consideration.

8.3 STATEMENT OF FINANCIAL POSITION

Note: The statement of financial position for the year ending 31 December 2021 and forecast as at 31 December 2022 have been produced taking into account the combination of the Medserv Group and the Regis Group.

	Actual	Actual	Actual	Updated Forecast	Projections
as at 31 December	2019	2020	2021	2022	2023
	€'000	€'000	€'000	€'000	€'000
ASSETS
Goodwill and intangible assets	11,751	9,836	21,108	19,052	17,044
Property, plant and equipment	31,472	27,736	36,052	35,654	36,488
Contract Costs	368	-	-	-	-
Loan Receivable	-	-	4,147	-	-
Investments at FVTPL	-	-	4,007	4,007	4,007
Right of Use Asset	75,848	62,189	50,014	47,835	47,818
Deferred tax assets	4,065	3,491	-	-	-
Total non-current assets	123,504	103,252	115,328	106,548	105,357
Inventories	1,383	1,087	1,067	772	772
Current tax asset	107	183	306	300	300
Contract costs	318	318	-	-	-
Contract Assets	1,608	32	202	-	-
Trade and other receivables	17,784	9,629	21,882	23,951	25,050
Cash at bank and in hand	5,743	7,267	11,984	9,576	10,525
Assets held for sale			17	-	-
Total current assets	26,942	18,516	35,458	34,599	36,647
Total assets	150,446	121,768	150,786	141,147	142,004
LIABILITIES
Deferred Income	31,072	30,575	-	-	-
Loans and borrowings	2,449	5,508	3,912	5,978	4,702
Bond (listed)	50,343	49,799	49,491	41,499	41,869
Trade and other payables	1,860	2,120	71	-	-
Lease Liability	29,171	17,345	12,720	12,484	13,561
Deferred tax liabilities	1,984	608	5,318	4,003	3,397
Provisions & Employee Benefits	960	799	1,427	1,177	1,298
Total non-current liabilities	117,839	106,755	72,939	65,141	64,827
Current tax payable	12	6	6	-	243
Deferred income	776	812	193	194	194
Lease Liability	1,374	1,024	1,722	1,166	1,315
Loans and borrowings	7,264	4,427	4,415	2,536	2,003
Trade and other payables, Provisions	9,095	4,453	8,692	9,016	8,996
& Employee Benefits Total current liabilities	18,519	10,722	15,028	12,912	12,751

EQUITY
Share capital	5,374	5,374	10,164	10,164	10,164
Share Premium	12,004	12,004	27,778	27,778	27,778
Reserves	9,829	8,499	(1,063)	(335)	(335)
Retained earnings/(losses)	(12,439)	(20,533)	23,151	22,022	23,185
Total equity attributable to equity holders of the Company	14,768	5,344	60,030	59,629	60,792
Non-controlling interest	(680)	(1,052)	2,789	3,466	3,634
Total equity	14,088	4,292	62,819	63,095	64,426
Total equity and liabilities	150,446	121,769	150,786	141,148	142,004

FY2021 REVIEW

The Group's total asset base expanded by 23.8% to €150.8 million reflecting the combination of the Medserv Group and the Regis Group following the completion of the share-for-share exchange with Regis Holdings Limited. Among the major assets, 'Property, Plant and Equipment' increased by 30% to €36.1 million reflecting the additional equipment spread across the Group following the merger. The reverse acquisition also led to a surge in 'Goodwill and Intangible Assets' which more than doubled to €21.1 million primarily due to the increase in goodwill attributable to future customer contracts, the synergies expected to be achieved from combining the operations of both groups as well as the skills and technical talent. The combination of the two groups also led to the recognition of additional customer relationships. The reverse acquisition also resulted in an increase in 'trade and other receivables' which more than doubled to €21.9 million (FY2020: €9.6 million) as well as an increase of 65% in cash balances to €12 million. Meanwhile, right-of-use assets declined to €50 million (FY2020: €62.2 million) largely due to a reduction in the recognition of right-of-use assets of MedOps which was brought about by the negative effect of the revaluation of the land due to the impact of the pandemic on real estate in Malta, coupled with a decrease in the discount rate in view of the low interest rate environment prevailing during the year.

The Group also registered a reduction in liabilities, primarily due to the derecognition of €30.6 million in deferred income as well as the recognition of lower levels of lease liabilities. The Group also reduced its bank loans by €1.6 million which, combined with the aforementioned reduction in lease liabilities, resulted in a reduction of 7.5% in the Group's total debt amounting to €72.3 million (including €14.4 million in lease liabilities).

8.4 RATIO ANALYSIS

	Actual	Actual	Actual	Updated Forecast	Projections
for the year ended 31 December	2019	2020	2021	2022	2023
	€'000	€'000	€'000	€'000	€'000
Loans and borrowings (non current)	2,449	5,508	3,912	5,978	4,702
Bond (listed)	50,343	49,799	49,491	41,499	41,869
Loans and borrowings (current)	7,264	4,427	4,415	2,536	2,003
Lease liabilities	30,545	18,370	14,442	13,650	14,876
Total Debt	90,600	78,104	72,260	63,663	63,450
Cash at bank and in hand	5,743	7,267	11,984	9,576	10,525
Net Debt	84,857	70,837	60,276	54,087	52,925

*Note: The Total Debt and Net Debt for FY2019 and FY2020 are being restated as lease liabilities are now included as per IFRS16.

The reverse acquisition also led to a substantial improvement in the Group's equity position as it increased to €62.8 million as at 31 December 2021 from just €4.2 million as at the end of FY2020.

UPDATED FORECASTS FOR FY2022 & PROJECTIONS FOR FY2023

The Group's total assets are expected to decline by 6.4% to €141.1 million by the end of FY2022, reflecting the effect of depreciation on PPE and right-of-use assets (ROU), and amortisation charges on goodwill and intangible assets. Some of this is reversed in FY2023, as PPE is expected to increase due to the investment in equipment necessary for the purposes of servicing the Group's clients in Mozambique, Uganda and UAE.

The Group's cash position is also expected to be lower by the end of FY2022 at €9.6 million, reflecting the repayment of part of its outstanding bonds. Cash is expected to increase to €10.5 million by the end of FY2023, reflecting the expected improvement in operations during the year, as discussed in earlier parts of this report.

Following the reduction in outstanding bonds, albeit part of this is being replaced by bank financing, MedservRegis plc's total debt is anticipated to be 10.3% lower at €54.1 million as at 31 December 2022, and €52.9 million as at end of FY2023, including €14.9 million in lease liabilities.

The Group's total equity is forecasted to improve marginally to €63.1 million by the end of FY2022 and to €64.4 million by the end of FY2023, reflecting the forecast profit for the year.

8.4 RATIO ANALYSIS

The following set of ratios have been computed by Rizzo Farrugia & Co (Stockbrokers) Ltd using the figures extracted from annual reports and management information.

Note: where the ratios were non-computable because of a negative return or a negative result, the ratio has been recorded as 'n/a' or excluded from the list of ratios presented in view of negative returns in all years under review.

PROFITABILITY RATIOS

The below is a set of ratios prepared to assist in measuring the Company's ability to generate profitable sales from its assets.

	Actual FY2019	Actual FY2020	Actual FY2021	Updated Forecast FY2022	Projections FY2023
Gross Profit margin (Gross Profit / Revenue)	26.88%	34.66%	42.72%	37.18%	38.13%
EBITDA margin (EBITDA / Revenue)	18.51%	17.17%	17.73%	21.26%	23.90%
Operating Profit margin (Operating Profit / Revenue)	4.49%	n/a	n/a	5.84%	9.37%
Net Profit margin (Profit for the period / Revenue)	n/a	n/a	n/a	0.54%	2.83%
Return on Equity (Profit attributable to owners of the Company / Average Equity attributable to owners of the Company)	n/a	n/a	n/a	n/a	2.37%
Return on Capital Employed (Profit for the period / Average Capital Employed)	n/a	n/a	n/a	0.25%	1.48%
Return on Assets (Profit for the period / Average Assets)	n/a	n/a	n/a	0.20%	1.19%

Since the FY2021 income statement comprise the twelve-month operations of Regis Holdings Limited as well as the six-month operations of Medserv plc, the profitability ratios of FY2021 are not fully comparable to the ratios of the previous two years which were compiled from the income statement of Medserv plc on a standalone basis.

Actual Actual Actual

In FY2021, the Group registered a gross profit margin of just under 43% and an EBITDA margin of close to 18%. However, in FY2021 MedservRegis plc posted an operating loss as the depreciation, amortisation and impairment on PPE & intangible assets were higher than the level of EBITDA.

Profitability ratios for FY2022 and FY2023 are expected to improve, reflecting the improved level of business expected to be achieved during the said years, save for a marginal dip in gross profit margin in FY2022 reflective of the faster increase in cost of sales when compared to the increase in revenue generated for the year.

LIQUIDITY RATIOS

The below is a set of ratios prepared to assist in measuring the Company's ability to meet its short-term obligations.

	Actual FY2019	Actual FY2020	Actual FY2021	Updated Forecast FY2022	Projections FY2023
Current Ratio (Current Assets / Current Liabilities)	1.45x	1.73x	2.36x	2.68x	2.87x
Cash Ratio (Cash & cash equivalents / Current Liabilities)	0.31x	0.68x	0.80x	0.74x	0.83x

The consolidation of the Medserv Group and the Regis Group brought a substantial improvement to the Group's current assets when compared to previous years. Indeed, the current ratio increased to 2.36 times as at the end of FY2021, boosted by higher levels of 'trade and other receivables' and 'cash and cash equivalents'.

General improvements in the Group's liquidity ratios are also observed in the forecast for FY2022 and the projections for FY2023.The current ratio is expected to increase further to 2.68 times as at 31 December 2022 and 2.87 times as at the end of FY2023 as the Group will seek to restructure its debt and hold lower levels of current loans and borrowings. In view of the lower level of cash when comparing FY2022 to FY2021, following the part repayment of the outstanding bonds through cash reserves, the cash ratio for FY2022 is lower than that of FY2021, albeit a recovery and improvement is expected in FY2023.

SOLVENCY RATIOS

The below is a set of ratios prepared to assist in measuring the Company's ability to meet its debt obligations.

	Actual FY2019	Actual FY2020	Actual FY2021	Updated Forecast FY2022	Projections FY2023
Interest Coverage ratio (EBITDA / Net finance costs)	2.25x	1.39x	n/a	2.88x	3.92x
Gearing Ratio (1) (Net debt inc. leases / Total Equity)	6.02x	16.51x	0.96x	0.86x	0.82x
Gearing Ratio (2) [Total debt inc. leases / (Total Debt plus Total Equity)]	0.87x	0.95x	0.53x	0.50x	0.50x
Net Debt to EBIDTA (Net Debt inc. leases/ EBIDTA)	6.67x	12.73x	11.36x	4.65x	3.74x

Since the FY2021 income statement comprise the twelve-month operations of Regis Holdings Limited as well as the six-month operations of Medserv plc, the EBITDA for FY2021 is not comparable to the previous two years and as such, debt metrics using the EBITDA value of FY2021 do not provide the most appropriate gauge of the Group's ability to meet its financing obligations. Furthermore, in FY2021 the Group registered a net finance gain as its finance income outweighed its finance costs. As a result, the interest coverage ratio for FY2021 is not applicable. In FY2022, the interest coverage ratio is expected to reach 2.88 times, and 3.92 times in FY2023 reflecting the expected improvement in business activity and EBITDA.

From a gearing perspective, the consolidation of the Medserv Group and the Regis Group resulted in a stronger financial position due to the significant improvement in the Group's equity position. Indeed, the Group's net debt was lower than its total equity as at the end of FY2021, resulting in a gearing ratio (calculated as Net debt inc. leases / Total Equity) of 0.96 times from 16.51 times in FY2020. Similarly, the gearing calculated as total debt divided by total debt plus equity moved sharply lower to 0.53 times as at 31 December 2021, compared to 0.95 times in the previous year. As the Group expects to lower its borrowings during 2022, the gearing is anticipated to improve further to 0.50 times as at the end of each of FY2022 and FY2023.

The improvement in the financial performance of MedservRegis plc coupled with the reduction in debt, the net debt to EBITDA multiple is envisaged to go down to 4.65 times for FY2022, and improve further to 3.74 times by the end of FY2023.

ADDITIONAL RATIOS

Since the company did not register a net profit in FY2019, FY2020 and FY2021, the Earnings Per Share ratio cannot be computed. Similarly, the Group did not declare any dividends during the years under review and as such, the computation of the Dividend Cover ratio is not possible.

8.5 VARIATIONS IN THE ISSUER'S FORECASTS FOR FY2022

For FY2022 and FY2023, the Company is expected to return to profit, and the ratio computations for the said forward looking periods are included below:

	Actual	Actual Actual		Updated Forecast	Projections
	FY2019	FY2020	FY2021	FY2022	FY2023
Earnings per Share (€) (Profit for the year / No of shares in issue)	N/A	N/A	N/A	0.003	0.017

8.5 VARIATIONS IN THE ISSUER'S FORECASTS FOR FY2022

In the FAS dated 26 July 2022, the Company published a forecast income statement covering FY2022. Since then, the Group has had improved visibility of its expected performance, and thus revised its forecasts for the said year as laid out in section 8.1. The variances between the two sets of forecasts are being explained hereunder.

	Forecast in July 2022 FAS	Updated Forecast	Variance
for the year ended 31 December	FY2022	FY2022
	€'000	€'000	%	€'000
Revenue	48,780	54,694	12.12%	5,914
Cost of Sales	(29,502)	(34,359)	16.46%	(4,857)
Gross Profit	19,278	20,335	5.48%	1,057
Other income	78	130	66.67%	52
Administrative expenses	(9,013)	(8,901)	-1.24%	112
Other expenses	(6)	66	-1200.00%	72
EBITDA	10,337	11,630	12.51%	1,293
Depreciation	(6,349)	(6,381)	0.50%	(32)
Amortisation of Intangible Assets	(2,056)	(2,056)	-0.02%	0
Results from operating activities	1,931	3,193	65.31%	1,262
Finance costs	(3,653)	(4,045)	10.73%	(392)
Net finance costs	(3,653)	(4,045)	10.73%	(392)
Loss before tax	(1,722)	(852)	-50.51%	870
Tax income / (expense)	1,034	1,146	10.83%	112
Profit (Loss) for the period	(688)	294	-142.76%	982

The main factor giving rise to the variances above relates to the updates in the revenue forecasts. Given the increase in the scope of works derived from the ENI contract in Cyprus, as well as increased activity in the machine shops in UAE for FY2022 led to a higher forecasted revenue figure of €54.7 million compared to the €48.8 million included in the July FAS. This change also drives the variances in other related line items such as cost of sales and administrative expenses.

The net finance cost has been revised higher to reflect the higher interest rate scenario as well as the higher incidence of financing costs related to lease modifications.

As a result of these changes, particularly the improved level of revenue expected to be generated by the end of this current financial year, the Group is expecting to close the year at a profit as opposed to the net loss expected back in July of this year.

ISIN Details Maturity

PART C LISTED SECURITIES

MedservRegis plc's ordinary shares are listed on the Official List of the Malta Stock Exchange – details as follows:

ISIN:	MT0000310103
Issued Shares:	101,637,634 ordinary shares
Nominal Value:	€0.10
2021 Year-End Price:	€0.650
Current Market Price:	€0.820 (as at 30 September 2022)
Enterprise Value6 :	€141.37 million

Price to Earnings Ratio: n/a

⁶ Based on the market capitalisation as at 30 September 2022 and the figures extracted from the Statement of Financial Position as at 30 June 2022.

Apart from the shares, the Issuer has other debt securities which are also listed on the Official List of the Malta Stock Exchange. Details of these bonds are found in the table below:

ISIN	Details	Maturity	Nominal Amount
MT0000311218	6% Secured & Guaranteed 2020/2023 S1 T1 (€)	Callable between 30/09/2020 and 30/09/2023	13,000,6007
MT0000311234	4.5% Unsecured 2026 (€)	05/02/2026	21,982,400
MT0000311242	5.75% Unsecured 2026 (USD)	05/02/2026	9,148,100

⁷ MedservRegis plc intends to redeem this bond in January 2023 mainly through the issuance of a fresh bond of €13 million pursuant to the Prospectus dated9 November 2022.

PART D COMPARATIVES

NB: The table below seeks to compare the securities of MedservRegis plc with a selection of securities with a similar term. It is to be noted, however, that there are significant differences in the business models of each of the listed companies being compared below and an exact match to the operations and business of the Issuer is not available. Thus, while the metrics below can be used as a gauge of MedservRegis's financial strength against other issuers listed locally, they do not capture the quantitative factors such as the different business models of each issuer, their competitive position in the market, KPIs, etc.

Bond Details	Amount Outstanding (€)	Gearing (%)*	Net Debt to EBITDA (times)	Interest Cover (times)	YTM (as at 30.09.2022)
4.00% MIDI plc 2026 (Secured)	50,000,000	32.7%	23.6x	0.9x	4.00%
4.00% Int. Hotel Investments plc 2026 (Secured)	55,000,000	40.1%	38.1x	0.6x	3.35%
4.00% Int. Hotel Investments plc 2026 (Unsecured)	60,000,000	40.1%	38.1x	0.6x	4.12%
3.90% Plaza Centres plc 2026	5,680,000	14.7%	2.8x	5.7x	3.90%
4.50% MEDSERVREGIC PLC 2026	21,982,400	47.9%	11.0x	2.3x	5.78%
3.25% AX Group plc 2026	15,000,000	25.6%	7.0x	3.0x	3.27%
3.75% Premier Capital plc 2026	65,000,000	47.2%	0.9x	11.7x	3.49%
5.00% MEDSERVREGIS PLC 2029 (Secured)	13,000,000	47.9%	11.0x	2.3x	5.00%
4.50% ENDO Finance plc 2029	13,500,000	53.3%	4.2x	4.7x	4.77%
4.00% SP Finance plc 2029 (Secured)	12,000,000	48.5%	36.8x	0.5x	3.48%
3.65% Stivala Finance plc 2029 (Secured)	15,000,000	26.5%	33.6x	0.8x	3.37%
3.80% HILI Finance Company plc 2029	40,000,000	60.3%	2.7x	14.3x	3.83%
3.75% AX Group plc 2029	10,000,000	25.6%	7.0x	3.0x	3.75%

Source: Malta Stock Exchange, Audited Accounts of Listed Companies, Rizzo, Farrugia & Co (Stockbrokers) Ltd

*Gearing: (Net Debt / [Net Debt + Total Equity]) [Net debt excludes leases]

The chart below compares the 4.5% MedservRegis plc Unsecured 2026 and the 5.00% MedservRegis plc Secured 2029 bonds to other corporate bonds listed on the Malta Stock Exchange and benchmarked against the Malta Government Stock yield curve as at 30 September 2022.

MEDSERV PLC BONDS' YTM VS CORPORATE & MGS YTM – AS AT 30.09.2022

The 4.5% MedservRegis plc 2026 bond is yielding 101 basis points over the corporate bonds average YTM maturing in the same year and 261 basis points over the average MGS YTM for a similar maturity. The 5.00% MedservRegis plc 2029 Secured bond is yielding 116 basis points over the corporate bonds average YTM for 2029 and 173 basis points over the average MGS YTM for a similar maturity.

INCOME STATEMENT EXPLANATORY DEFINITIONS

Revenue	Total revenue generated by the company from its business activity during the financial year.
EBITDA	Earnings before interest, tax, depreciation and amortization, reflecting the company's earnings purely from operations.
Normalisation	Normalisation is the process of removing non-recurring expenses or revenue from a financial metric like EBITDA, EBIT or earnings. Once earnings have been normalised, the resulting number represents the future earnings capacity that a buyer would expect from the business.
EBIT	Earnings before interest and tax.
Depreciation and Amortization	An accounting charge to compensate for the reduction in the value of assets and the eventual cost to replace the asset when fully depreciated.
Finance Income	Interest earned on cash bank balances and from the intra-group companies on loans advanced.
Finance Costs	Interest accrued on debt obligations.

CASH FLOW STATEMENT EXPLANATORY DEFINITIONS

Cash Flow from Operating Activities	The cash used or generated from the company's business activities.
Cash Flow from Investing Activities	The cash used or generated from the company's investments in new entities and acquisitions, or from the disposal of fixed assets.
Free Cash Flow (FCF)	FCF represents the amount of cash remaining from operations after deducting capital expenditure requirements.
Cash Flow from Financing Activities	The cash used or generated from financing activities including new borrowings, interest payments, repayment of borrowings and dividend payments.

STATEMENT OF FINANCIAL POSITION EXPLANATORY DEFINITIONS

Assets	What the company owns which can be further classified in Current and Non-Current Assets.
Non-Current Assets	Assets, full value of which will not be realised within the forthcoming accounting year
Current Assets	Assets which are realisable within one year from the statement of financial position date.
Liabilities	What the company owes, which can be further classified in Current and Non-Current Liabilities.
Current Liabilities	Obligations which are due within one financial year.
Non-Current Liabilities	Obligations which are due after more than one financial year.
Equity	Equity is calculated as assets less liabilities, representing the capital owned by the shareholders, retained earnings, and any reserves.

PROFITABILITY RATIOS

Gross Profit Margin	Gross profit as a percentage of total revenue.
EBITDA Margin	EBITDA as a percentage of total revenue.
Operating Profit Margin	Operating profit margin is operating profit achieved during the financial year expressed as a percentage of total revenue.
Net Profit Margin	Net profit margin is profit after tax achieved during the financial year expressed as a percentage of total revenue.
Return on Equity (ROE)	ROE measures the rate of return on the shareholders' equity of the owners of issued share capital, computed by dividing profit after tax by average shareholders' equity.
Return on Capital Employed (ROCE)	ROCE indicates the efficiency and profitability of a company's capital investments, estimated by dividing operating profit by capital employed.
Return on Assets (ROA)	ROA measures the rate of return on the assets of the company. This is computed by dividing profit after tax by average total assets.

Rizzo, Farrugia & Co (Stockbrokers) L

LIQUIDITY RATIOS

Current Ratio	The current ratio is a financial ratio that measures whether a company has enough resources to pay its debts over the next 12 months. It compares a company's current assets to its current liabilities.
Cash Ratio	Cash ratio is the ratio of cash and cash equivalents of a company to its current liabilities. It measures the ability of a business to repay its current liabilities by only using its cash and cash equivalents and nothing else.
SOLVENCY RATIOS
Interest Coverage Ratio	This is calculated by dividing a company's EBITDA of one period by the company's net finance costs of the same period.
Gearing Ratio	The gearing ratio indicates the relative proportion of shareholders' equity and debt used to finance a company's assets.
Net Debt to EBITDA	This is the measurement of leverage calculated by dividing a company's interest-bearing borrowings net of any cash or cash equivalents by its EBITDA.
OTHER DEFINITIONS
Yield to Maturity (YTM)	YTM is the rate of return expected on a bond which is held till maturity. It is essentially the internal rate of return on a bond and it equates the present value of bond future cash flows to its current market price.
Earnings per Share (EPS)	EPS is calculated by dividing the company's profit by the number of shares in issue.
Dividend Cover	Dividend cover is calculated by dividing the EPS by the dividend per share.
Enterprise Value (EV)	EV measures the company's total value comprising its market capitalisation and net debt.
Price to Earnings (P/E)	The P/E ratio is a valuation multiple used to compare the company's share price with its EPS.

Prepared by: Rizzo, Farrugia & Co (Stockbrokers) Ltd E: sponsors@rizzofarrugia.com T: +356 2258 3000

Annex 3 - Authorised Intermediaries

Name	Address	Telephone
APS Bank p.l.c.	APS Centre, Tower Street, Birkirkara BKR 4012	2122 6644
Bank of Valletta p.l.c.	Premium Banking Centre, 475, Triq il-Kbira San Guzepp St Venera SVR 1011	2275 1732
Calamatta Cuschieri Investment Services Ltd	Ewropa Business Centre, Triq Dun Karm, Birkirkara BKR 9034	2568 8688
CiliaFormosa Financial Advisors Ltd	Triq id-Delu Mosta, MST 3355	2226 0200
Curmi & Partners Ltd	Finance House, Princess Elizabeth Street, Ta' Xbiex XBX 1102	2134 7331
FINCO Treasury Management Ltd	The Bastions, Office No 2, Emvin Cremona Street, Floriana FRN 1281	2122 0002
GlobalCapital Financial Management Ltd	Testaferrata Street, Ta' Xbiex XBX 1403	2134 2342
Hogg Capital Investments Ltd	NuBis Centre, Mosta Road, Lija LJA 9012	2132 2872
Jesmond Mizzi Financial Advisors Ltd	67 Level 3, South Street, Valletta VLT 1105	2122 4410
Lombard Bank Malta p.l.c.	67, Republic Street, Valletta VLT 1117	2558 1112
MeDirect Bank (Malta) p.l.c.	The Centre, Tigne`Point, Sliema TPO 0001	2557 4400
Michael Grech Financial Investment Services Ltd	The Brokerage, Level 0A St Marta Street Victoria, Gozo VCT 2550	2258 7000
MZ Investment Services Ltd	61, St. Rita Street, Rabat RBT 1523	2145 3739
Rizzo, Farrugia & Co (Stockbrokers) Ltd	Airways House, Fourth Floor, High Street, Sliema SLM 1551	2258 3000