Medserv PLC (MT:MDS) has announced signing a contract for shore-base logistics in Suriname, a new geographic region for the company. End markets are supportive for the company and we believe tendering activity continues at a good level. Overall, FY18 has progressed well, with contract wins establishing the company on a broad geographic reach and underpinning growth expectations in FY19.
In our August report, we indicated that end markets supported Medserv’s strategy to increase its geographic footprint. Today’s contract win is an important step towards building exposure in South America. The work will focus on the support of the nearshore drilling of Staatsolie Maatschappij Suriname. Medserv was successful in an international tendering process to secure the contract valued at $30.6m, covering 15 months from 1 January 2019. It will be serviced from existing internal resources and will be reported within the Integrated Logistics Support Services division. Medserv believes there will be additional opportunities in the region, given the ExxonMobil (NYSE:XOM) discoveries in offshore Guyana.
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