Hms Hydraulic S Regulatory News (HMSG)

29 Sep 2011 10:04

September 29, 2011

HMS Hydraulic Machines & Systems Group plc(the "Company", and together with its subsidiaries, the "HMS Group")

HMS GROUP TO PROVIDE OVERHAUL AND MAINTENANCE SERVICES FOR VANKOR OIL AND GAS FIELD

Moscow, Russia - HMS Group (LSE: HMSG), the leading pump manufacturer and provider of flow control solutions, engineering and construction works for oil and gas fields in Russia and the CIS, today announces signing a contract totaled Rub 570 million after winning the competitive tender process. In accordance with the contract the Group will render overhaul services and maintenance of the broad range of oil equipment installed on the East-Siberian oil and gas field during 2012 with possible prolongation for the next two years.

Artem Molchanov, Managing Director (CEO) of HMS Group, commented:

"This contract is a good example of the HMS Group commitment to its strategy. Strong relationships with our clients have been a cornerstone of our business model for years. We have consistently met the requirements of our customers providing them with comprehensive solutions across the entire life-cycle of their projects - from engineering at the early stage to aftermarket services for the completed projects.

As another example, last year we've signed a similar contract with TNK-BP under which the Group rendered services on water injection pumps maintenance at the Samotlor oilfield.

Currently we observe certain changes in overall market structure - the customers started to get rid of in-house overhaul and repair works, focusing on cost efficiency and outsource such operations.

I believe that growing number of aftermarket contracts will increase Group's revenue and maintain stable margins"

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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 7.1 billion, adjusted EBITDA of RUB 1.6 billion and profit of RUB 1 billion for the three months ended March 31, 2011. The HMS Group's global depositary receipts ("GDRs") are listed under the symbol "HMSG" on the London Stock Exchange.

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