Last checked at 27 Sep 2021 07:30
HMS Group (HMSG) HMS Group Reports Rub 2.9 billion EBITDA for 6 months 2021 27-Sep-2021 / 09:30 MSK Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
HMS Group Reports Rub 2.9 billion EBITDA for 6 months 2021
Moscow, Russia - September 27, 2021 - HMS Hydraulic Machines & Systems Group Plc (the "HMS Group", or the "HMS", or the "Group") (LSE, MOEX: HMSG), the leading pump, oil & gas equipment and compressor manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announces its financial results for the six months ended June 30, 2021.
Financial highlights 6m 2021: Revenue: Rub 25.8 bn (+32% yoy) EBITDA[1]: Rub 2.9 bn (+36% yoy), EBITDA margin at 11.1% Operating profit: Rub 1.4 bn (+172% yoy) Profit for the period: Rub 378 mnTotal debt: Rub 22.5 bn (-1% yoy) Net debt: Rub 16.6 bn (+2% yoy) Net debt-to-EBITDA LTM ratio: 2.91x
Operational highlights 6m 2021: Backlog[2]: Rub 56.0 bn (+28% yoy) Order intake[3]: Rub 30.9 bn (+58% yoy)
Forecast FY 2021: Revenue: Rub 60.0 bn EBITDA: Rub 6.5 bn
HMS GROUP PERFORMANCE 6 months 2021 financial Results Order intake was up to Rub 30.9 billion, by 58% yoy, compared with Rub 19.5 billion for 6m 2020. The industrial pumps and oil & gas equipment grew, while the compressors order intake was down. On the LTM basis, all the segments grew including the compressors, where the main contracts were signed in 2H 2020. In terms of contracts type, both recurring business and large contracts increased. Backlog was Rub 56.0 billion, up by 28% yoy, compared with Rub 43.7 billion at the end of 6m 2020, supported by all business segments. In terms of contracts type, both recurring business and large contracts grew, by 15% yoy and 48% yoy respectively, compared with the end of 6m 2020. Revenue was Rub 25.8 billion, up by 32% yoy, compared with Rub 19.5 billion for 6m 2020, based on revenue growth in the oil & gas equipment and compressors business segments. EBITDA was Rub 2.9 billion, up by 36% yoy, implying EBITDA margin of 11.1%. Revenue generated by large projects grew 145% yoy compared with 6m 2020. Revenue from recurring business declined 10% yoy. EBITDA from large contracts increased 145% yoy, and EBITDA from recurring business declined 58% yoy. Profit for the period was Rub 378 million, compared with loss for the period at Rub 314 million for 6m 2020. Free cash outflow was Rub 4.7 billion, compared with free cash outflow of Rub 1.5 billion for 6m 2020, due to the higher working capital requirements for execution of large contracts, that are within the normal quarterly volatility.
Expenses and Operating profit Cost of sales was Rub 20.9 billion, up by 35% yoy, compared with Rub 15.5 billion for 6m 2020, fully due to the growth in materials and components costs (+54% yoy). Materials and components outpaced the growth in Cost of sales because of revenue growth and due to a higher share of material-intensive large contracts under execution.
Gross profit grew to Rub 4.9 billion, by 23% yoy, compared with Rub 4.0 billion for 6m 2020. SG&A expenses[5] were up a minor 1% yoy. Distribution & transportation expenses were down mainly due to lower transportation costs and expenses on insurance and advertising. As a share of revenue, they declined to 3.0%, compared with 4.6% for 6m 2020. General & administrative expenses were up to Rub 2.6 billion (+8% yoy). As a share of revenue, these expenses were down to 10.0%, compared with 12.3% for 6m 2020. Operating profit increased to Rub 1.4 billion (+172% yoy), compared with Rub 524 million for 6m 2020.
Finance costs were Rub 917 million, down by 3% yoy, compared with Rub 941 million for 6m 2020, due to a lower level of average total debt within the reporting period compiled with reduced interest rates, compared with 6m 2020. Average interest rate was 8.09% p.a., compared with 8.21% p.a. last year.
BUSINESS SEGMENTS PERFORMANCE Industrial pumps[i] Order intake was Rub 12.5 billion, up by 56% yoy, compared with Rub 8.0 billion for 6m 2020, mainly due to a large nuclear pumps contract signed in 2Q 2021. Both recurring business and large contracts grew. Backlog was Rub 22.8 billion, up 16% yoy, compared with Rub 19.7 billion at the end of 6m 2020, due to the growth both in recurring business and large contracts. Revenue was down to Rub 8.0 billion (-4% yoy), compared with Rub 8.3 billion for 6m 2020. EBITDA was down 18% yoy to Rub 834 million, compared with Rub 1.0 billion for 6m 2020, due to a change in a mix of contracts where major deliveries are scheduled in 2H 2021. EBITDA margin was 10.4%, compared with 12.3% during 6m 2020.
Oil and Gas equipment & projects (OGEP)[ii] Order intake grew to Rub 14.0 billion, up by 109% yoy, compared with Rub 6.7 billion during 6m 2020, due to the large Rub 7.5 billion contract signed in the reporting period. Backlog was Rub 14.9 billion, up by 79% yoy, compared with Rub 8.3 billion at the end of 6m 2020, supported by both regular business and large contracts. Revenue was Rub 8.3 billion, up by 62% yoy, compared with Rub 5.2 billion for 6m 2020, due to large contracts. EBITDA increased to Rub 818 million, up by 236% yoy, compared with Rub 243 million for 6m 2020 due to a larger share of large contracts in the reported period. EBITDA margin was 9.8%, compared with 4.7% for 6m 2020.
Compressors [iii] Order intake declined to Rub 2.4 billion, compared with Rub 4.6 billion for 6m 2020, due to less large contracts signed in the reporting period. On the LTM basis, the compressors' order intake is growing, because the main contracts were signed in 2H 2020. Backlog increased to Rub 17.1 billion, up 14% yoy, compared with Rub 15.1 billion at the end of 6m 2020, due to large contracts. Revenue was Rub 9.9 billion, up by 71% yoy, compared with Rub 5.8 billion for 6m 2020, mainly due to large contracts. EBITDA was Rub 978 million, up by 50% yoy, compared with Rub 653 million for 6m 2020, fully due to execution of large contracts. EBITDA margin was up to 9.9%, compared with 11.3% for 6m 2020.
Construction[iv] Order intake equaled Rub 2.0 billion. Backlog grew to Rub 1.2 billion. This growth was related to an increase in a volume and price of a current construction contract under execution. Revenue was down to Rub 359 million, compared with Rub 406 million for 6m 2020. EBITDA was Rub (21) million, compared with Rub 39 million last year.
Working capital and Capital expenditures Working capital increased to Rub 11.8 billion (+13% yoy), compared with Rub 10.5 billion at the end of 6m 2020. Working capital changes are within the normal quarterly volatility. As a share of revenue LTM, working capital was at 22.4% vs. 22.1% at the end of 6m 2020. Maintenance capex was Rub 658 million, down by 11% yoy, compared with Rub 743 million during 6m 2020.
DEBT POSITION Total debt down 1% yoy to Rub 22.5 billion, compared with Rub 22.8 billion at the end of 6m 2020. Net debt was Rub 16.6 billion, up by 2% yoy, compared with Rub 16.2 billion at the end of 6m 2020. Net debt to EBITDA LTM ratio was 2.91x, down from 3.25x at the end of 6m 2020.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE BUYBACK PROGRAM After the reporting date, no GDRs have been purchased under the buyback program. Since the beginning of 2021, there have been 176,000 GDRs repurchased. Following the above transaction, the Company holds 257,960 of its GDRs in treasury (1.1% of its issued share capital).DIVIDENDS The Board of Directors at the meeting on April 21, 2021, recommended payment of the final dividends in respect of FY 2020 in the amount of Rub 4.25 per one ordinary share (Rub 21.25 per one GDR). The dividends were approved at the AGM in June and paid on July 1, 2021, to shareholders on the HMS' register at close of business (UK time) on June 18, 2021.BONDS On September 1, 2021, the Moscow Exchange registered an Exchange bonds program of one of HMS Group's facilities (JSC "HYDROMASHSERVICE"). The total volume of all the exchange bond issues placed within the program doesn't exceed Rub 15 billion, and the issue tenor is not more than 3,640 days from the date of the issue placement.*** Webcast to discuss 6 months 2021 IFRS results
Date: Monday, September 27, 2021 Time: 12.00 (MOSCOW) / 10.00 (London) HMS Group 6m 2021 IFRS results Conference passcode: 1667366
To participate in the conference call, please dial in:
Russia Local: +7 495 213 1767 Russia Toll Free: 8 800 500 9283
UK Local: +44 (0)330 336 9125 UK Toll Free: 0800 358 6377
US Local: +1 323 794 2093 US Toll Free: 800 458 4121
Live link https://www.webcast-eqs.com/hmsgroup20210927
Contacts: Investor Relations, ir@hms.ru
*** HMS Group is the leading pump and compressor manufacturer, as well as 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. 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. HMS Group's global depositary receipts ("GDRs") are listed under the symbol "HMSG" on the London Stock Exchange and the Moscow Exchange.
Press Release Information Accuracy Disclaimer Information published in press releases was accurate at the time of publication but may be superseded by subsequent releases or other information.
LEI: 254900DDFETNLASV8M53
Consolidated Statement of Financial Position at 30 June 2021 (unaudited) in thousands of Russian Roubles, unless otherwise stated
Consolidated Statement of Profit or Loss and Other Comprehensive Income for the six months ended 30 June 2021 (unaudited) in thousands of Russian Roubles, unless otherwise stated
Consolidated Statement of Cash Flows for 6m 2021 (unaudited) in thousands of Russian Roubles, unless otherwise stated
[1] EBITDA is defined as operating profit/(loss) adjusted for other operating income/expenses, depreciation and amortisation, amortisation of government grants, impairment of assets, excess of fair value of net assets acquired over the cost of acquisition, defined benefits scheme expense and provisions (including provision for obsolete inventory, ECL allowance and provision for impairment of trade and other receivables and other financial assets, unused vacation allowance, warranty provision, provision for legal claims, tax provision and other provisions). This measurement basis, therefore, excludes the effects of a number of non-recurring income and expenses on the results of the operating segments. [2] Backlog - Portfolio of uncompleted orders and contracts [3] Order intake - Portfolio of contracts and orders signed for a period [4] Construction and design and engineering services of subcontractors [5] SG&A expenses - Selling, General and Administrative Expenses, compiled of distribution & transportation expenses plus general & administrative ones [i] 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 customized pumps and integrated solutions as well as pumps built to standard specifications; it also provides aftermarket maintenance and repair services and other support for its products. [ii] The oil and gas equipment and projects business segment manufactures, installs and commissions modular pumping stations, automated metering equipment, oil, gas and water processing and preparation units and other equipment and systems for use primarily in oil extraction and transportation. The segment's core 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. [iii] The compressors business segment designs, engineers, manufactures and supplies a diverse range of compressors and compressor-based solutions, including compressor units and compressor stations, to customers in the oil and gas, metals and mining and other basic industries in Russia. The business segment's principal products include customized compressors, series-produced compressors built to standard specifications, and compressor-based integrated solutions. [iv] The construction provides construction works for projects for customers in the oil upstream and midstream, gas upstream.
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| ISIN: | US40425X4079 |
| Category Code: | IR |
| TIDM: | HMSG |
| LEI Code: | 254900DDFETNLASV8M53 |
| OAM Categories: | 1.2. Half yearly financial reports and audit reports/limited reviews |
| Sequence No.: | 122953 |
| EQS News ID: | 1235979 |
| End of Announcement | EQS News Service |
UK Regulatory announcement transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.