Hms Hydraulic S Regulatory News (HMSG)

20 Apr 2012 09:00

HMS Hydraulic Machines & Systems Group plc

(the "Company", and together with its subsidiaries, the "HMS Group")

HMS GROUP Q1 2012 ORDER INTAKE

Moscow, Russia - HMS Group (LSE: HMSG), the leading pump manufacturer, provider of flow control solutions and engineering works for oil and gas fields, power and water utilities segments in Russia and the CIS, today issues the following statement regarding orders received during Q1 2012.

HIGHLIGHTS:

Overall order intake under management accounts grew by 122% YoY and amounted to Rub 7.8 bn (USD 266 mn) in Q1 2012 versus Rub 3.5 bn (USD 120 mn) in Q1 2011 that reflects a profound upward trend in receiving new contracts across all business segments. Order intake in Q1 2012 was just 12.8% lower than in Q1 2010, which totalled RUB 9.0 bn (USD 305 mn) including Rub 5.1 bn (USD 173 mn) of the ESPO-related orders. Given several contracts that are currently in a final negotiation stage and close to signing, overall backlog as of June 30, 2012 is expected to increase further that makes the Group well-positioned to deliver positive results in 2012.

Order Intake (millions of Rub)		Q1 2012		Q1 2011		?
Business segments
Industrial pumps		2,689		1,643		+64%
Oil and Gas equipment		2,963		861		+244%
EPC, including		1,772		707		+151%
Construction		1,392		163		8,5x
Project and design		380		544		-30%
Others		417		319		+31%
Total		7,840		3,530		+122%

Overview by business segments

Industrial pumps

The industrial pumps business segment designs, engineers, manufactures and supplies a diverse range of pumps and pump-based integrated solutions to customers in the oil and gas, power generation and water utilities sectors in Russia, the CIS and internationally. The business segment's principal products include bare shaft pumps built to standard specifications, customized pumps and integrated solutions.

The order intake in the industrial pumps business segment grew by 64% YoY from Rub 1,643 mn to Rub 2,689 mainly as a result of orders increase in pumps for nuclear and thermal power, pumps for water utilities and pumps for oil refineries. Orders of pumps for oil upstream and midstream applications contacted, though the contraction was more than offset by the orders in the abovementioned sectors. Basically, a large number of contracts with expected revenue less than Rub 30 mn each constituted order flow of Q1 2012.

Oil & gas equipment

The oil and gas equipment business segment manufactures, installs and commissions modular pumping stations, automated metering equipment, oil, gas and water processing and preparation units, tanks and vessels and other equipment and systems for use primarily in oil extraction and transportation. The segment's products are equipment packages and systems installed inside a self-contained, free-standing structure which can be transported on trailers and delivered to and installed on the customer's site as a modular but fully integrated part of the customer's technological process.

The order intake in the oil and gas equipment segment grew by 244% YoY and amounted to Rub 2,963 mn versus Rub 861 mn at the end of the Q1 2011. The upturn was primarily driven by several mid-size contracts for modular equipment including pump stations and automated group metering units as well as orders for tanks and vessels and oilfield equipment manufactured by Dimitrovgradkhimmash and Sibneftemash, the Group's subsidiaries acquired in 2011. New orders were largely represented by the contracts with expected revenue less than Rub 150 mn per contract.

EPC (Engineering, procurement and construction)

The engineering, procurement and construction (EPC) business segment provides project, design and construction works as well as overall project management, including on a turn-key basis, for customers in the oil and gas upstream, oil and gas transportation and water utilities sectors.

Order intake in the EPC segment rose by 151% from Rub 707 mn to Rub 1,772 mn mainly due to several mid-size construction contracts with the expected revenue less than Rub 500 mn each, signed by the Group in Q1 2012. As a result, the orders in the construction sub-segment grew 8.5x times from the low base of Rub 163 mn in Q1 2011 to Rub 1,392 mn in Q1 2012. The orders for project and design services declined by 30% from Rub 544 mn in Q1 2011 to Rub 380 mn in Q1 2012.

Other

Other orders for a wide range of services and non-core products and equipment were up 31% YoY from Rub 319 mn in Q1 2011 to Rub 417 mn in Q1 2012.

***

The HMS Group is the leading pump manufacturer and provider of flow control solutions and related services to the oil and gas, nuclear and thermal power generation and water utilities sectors in Russia and the CIS. The HMS Group's products are mission-critical elements of projects across a diverse range of industries. It has participated in a number of large-scale infrastructure projects in Russia, including providing pumps and modular equipment to the Vankor oil field and pumping stations on recent trunk pipelines projects linking Russia's core oil producing areas to export ports on the Pacific Ocean and Baltic Sea. The Group reported revenues of RUB 20.6 billion, adjusted EBITDA of RUB 4.4 billion and profit for the period of RUB 3 billion for the nine months ended September 30, 2011. The HMS Group's global depositary receipts ("GDRs") are listed under the symbol "HMSG" on the London Stock Exchange.

For further information, please contact:

Sergey Klinkov Head of IR Tel: +7 (495) 730-66-01, ext. 1302 klinkov@hms.ru

Nozima Karimova Head of Press Service Tel: +7 (495) 730-66-10 karimova@hms.ru

DISCLAIMER

THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER OF, OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR, GDRs OR OTHER SECURITIES TO ANY PERSON IN ANY JURISDICTION TO WHOM OR IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL AND, IN PARTICULAR, IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE RUSSIAN FEDERATION.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OF ANY SECURITIES IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HMS GROUP HAS NOT REGISTERED AND DOES NOT INTEND TO REGISTER ANY PORTION OF ANY OFFERING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF ANY SECURITIES IN THE UNITED STATES.

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