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HMS Group Reports Rub 2.9 billion EBITDA for 6 months 2021

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HMS Group (HMSG)
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:

 

 

Operational highlights 6m 2021:

 

Forecast FY 2021:

 

 

 

HMS GROUP PERFORMANCE

6 months 2021 financial Results

 

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Orders

30,883

19,541

58%

12,444

18,439

-33%

Backlog

56,035

43,714

28%

56,035

59,029

-5%

Revenue

25,796

19,498

32%

14,605

11,191

31%

EBITDA

2,855

2,107

36%

1,547

1,308

18%

EBITDA margin

11.1%

10.8%

 

10.6%

11.7%

 

Profit/(Loss) for the period

378

(314)

na

326

52

525%

Free cash outflow

 (4,703)

(1,513)

na

 (3,510)

(1,193)

na

 

Expenses and Operating profit

in millions of Rub

6m 2021

6m 2020

Change yoy

Share of  6m 2021 revenue

Share of 6m 2020 revenue

Cost of sales

20,931

15,537

35%

81.1%

79.7%

Materials and components

14,961

9,703

54%

58.0%

49.8%

Labour costs incl Social taxes

3,718

3,524

6%

14.4%

18.1%

Depreciation and amortization

1,051

1,048

0%

4.1%

5.4%

Construction and design [4]

1,189

1,065

12%

4.6%

5.5%

Others

11

197

-94%

0.0%

1.0%

 

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.  

in millions of Rub

6m 2021

6m 2020

Change yoy

Share of  6m 2021 revenue

Share of 6m 2020 revenue

Gross profit

4,865

3,961

23%

18.9%

20.3%

 Distribution & transportation

765

906

-16%

3.0%

4.6%

 General & administrative

2,590

2,405

8%

10.0%

12.3%

SG&A expenses

3,354

3,311

1%

13.0%

17.0%

 Other operating expenses

85

127

-33%

0.3%

0.6%

Operating expenses ex. Cost of sales

3,439

3,437

0%

13.3%

17.6%

Operating profit

1,426

524

172%

5.5%

2.7%

Finance costs

917

941

-3%

3.6%

4.8%

 

in millions of Rub

6m 2021

6m 2020

Change yoy

Finance costs

917

941

-3%

Interest rate, average

8.09%

8.21%

 

Interest rate Rub, average

8.21%

8.33%

 

 

BUSINESS SEGMENTS PERFORMANCE

Industrial pumps[i]

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Orders

12,495

8,015

56%

7,772

4,722

65%

Backlog

22,835

19,685

16%

22,835

19,203

19%

Revenue

7,990

8,288

-4%

4,373

3,617

21%

EBITDA

834

1,019

-18%

495

339

46%

EBITDA margin

10.4%

12.3%

 

11.3%

9.4%

 

Oil and Gas equipment & projects (OGEP)[ii]

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Orders

14,027

6,723

109%

2,603

11,424

-77%

Backlog

14,860

8,282

79%

14,860

16,156

-8%

Revenue

8,341

5,154

62%

3,952

4,390

-10%

EBITDA

818

243

236%

361

457

-21%

EBITDA margin

9.8%

4.7%

 

9.1%

10.4%

 

 

Compressors [iii]

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Orders

2,381

4,594

-48%

2,043

337

506%

Backlog

17,132

15,058

14%

17,132

22,312

-23%

Revenue

9,927

5,793

71%

6,621

3,306

100%

EBITDA

978

653

50%

492

486

1%

EBITDA margin

9.9%

11.3%

 

7.4%

14.7%

 

 

Construction[iv]

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Orders

1,981

210

846%

26

1,955

-99%

Backlog

1,208

690

75%

1,208

1,358

-11%

Revenue

359

406

-12%

166

193

-14%

EBITDA

(21)

39

na

(3)

(18)

na

EBITDA margin

-5.8%

9.6%

 

-1.8%

-9.2%

 


Working capital and Capital expenditures

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Working capital

11,844

10,486

13%

11,844

8,183

45%

Working capital / Revenue LTM

22.4%

22.1%

 

22.4%

16.9%

 

Maintenance  capex

658

743

-11%

217

440

-51%

Acquisitions

-

-

 

-

-

 

 

DEBT POSITION

in millions of Rub

6m 2021

6m 2020

Change yoy

2Q 2021

1Q 2021

Change qoq

Total debt

22,496

22,752

-1%

22,496

22,209

1%

Net debt

16,581

16,177

2%

16,581

13,053

27%

Net debt / EBITDA LTM

2.91

3.25

 

2.91

2.52

 

 

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

BUYBACK PROGRAM

DIVIDENDS

BONDS


***

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

 

30 June 2021

31 December 2020

ASSETS

 

 

Non-current assets:

 

 

Property, plant and equipment

14,384,553

14,684,279

Other intangible assets

1,590,627

1,743,399

Goodwill

3,190,624

3,255,984

Right-of-use assets

200,254

183,211

Investments in associates

94,933

94,307

Deferred income tax assets

815,368

786,455

Other long-term assets

5,733

42,252

Investment property

172,008

176,833

Total non-current assets

20,454,100

20,966,720

 

Current assets:

 

 

Inventories

10,452,424

8,847,749

Trade and other receivables and other financial assets

12,835,583

15,598,766

Contract assets

11,379,208

6,201,354

Current income tax receivable

138,151

94,972

Cash and cash equivalents

5,915,041

10,360,588

Total current assets

40,720,407

41,103,429

TOTAL ASSETS

61,174,507

62,070,149

 

 

 

EQUITY AND LIABILITIES

EQUITY

 

 

Share capital

48,329

48,329

Share premium

3,523,535

3,523,535

Treasury shares

(93,775)

(33,055)

Other reserves

129,392

129,392

Currency translation reserve

578,984

646,427

Retained earnings

5,353,615

5,510,974

Equity attributable to the shareholders of the Company

9,540,080

9,825,602

Non-controlling interests

3,607,196

3,518,674

TOTAL EQUITY

13,147,276

13,344,276

 

 

 

LIABILITIES

 

 

Non-current liabilities:

 

 

Long-term borrowings

14,880,643

20,452,736

Deferred income tax liability

1,474,276

1,421,489

Retirement benefit obligations

637,311

646,213

Provisions for liabilities and charges

197,920

228,199

Lease liabilities

167,032

153,048

Other long-term payables

266,719

230,581

Total non-current liabilities

17,623,901

23,132,266

 

Current liabilities:

 

 

Trade and other payables

20,234,212

17,969,950

Contract liabilities

1,404,426

4,304,845

Short-term borrowings

7,423,907

1,548,574

Provisions for liabilities and charges

528,003

589,762

Retirement benefit obligations

78,573

77,859

Lease liabilities

24,118

20,440

Current income tax payable

47,216

134,080

Other taxes payable

662,875

948,097

Total current liabilities

30,403,330

25,593,607

TOTAL LIABILITIES

48,027,231

48,725,873

TOTAL EQUITY AND LIABILITIES

61,174,507

62,070,149

 

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

 

 

 

 

Six months ended

30 June 2021

 

Six months ended

30 June 2020

Revenue

 

25,795,798

19,498,083

Cost of sales

 

(20,931,033)

(15,537,017)

Gross profit

 

4,864,765

3,961,066

 

 

 

 

Distribution and transportation expenses

 

(764,521)

(905,929)

General and administrative expenses

 

(2,589,855)

(2,404,748)

Other operating expenses, net

 

(84,735)

(126,603)

Operating profit

 

1,425,654

523,786

 

 

 

 

Finance income

 

94,976

163,837

Finance costs

 

(916,536)

(941,454)

Share of results of associates

 

143

264

 

 

 

 

Profit/(loss) before income tax

 

604,237

(253,567)

 

 

 

 

Income tax expense

 

(226,484)

(60,144)

 

 

 

 

Profit/(loss) for the period

 

377,753

(313,711)

 

Profit/(loss) attributable to:

 

 

 

Shareholders of the Company

 

305,134

(344,105)

Non-controlling interests

 

72,619

30,394

Profit/(loss) for the period

 

377,753

(313,711)

 

 

 

 

Other comprehensive income/(loss):

 

 

 

Items that will not be subsequently reclassified to profit or loss

 

 

 

Remeasurement of post-employment benefit obligations

 

26,745

(5,721)

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

Currency translation differences

 

(60,454)

299,070

Currency translation differences of associates

 

483

(23)

Other comprehensive (loss)/income for the period

 

(33,226)

293,326

Total comprehensive income/(loss) for the period

 

344,527

(20,385)

Total comprehensive income/(loss) attributable to:

 

 

 

Shareholders of the Company

 

255,161

(47,380)

Non-controlling interests

 

89,366

26,995

Total comprehensive income/(loss) for the period

 

344,527

(20,385)

 

Basic and diluted earnings/(loss) per ordinary share for profit/(loss) attributable to the ordinary shareholders (RR per share)

 

 

2.63

(3.03)

 

 

 

Consolidated Statement of Cash Flows for 6m 2021 (unaudited)

in thousands of Russian Roubles, unless otherwise stated

 

 

Six months ended 30 June 2021

Six months ended 30 June 2020

Cash flows from operating activities

 

 

 

Profit/(loss) before income tax

 

604,237

(253,567)

Adjustments for:

 

 

 

Depreciation and amortisation

 

1,208,328

1,210,967

(Gain)/loss from disposal of property, plant and equipment and intangible assets

 

(23,071)

4,548

Finance income

 

(94,976)

(163,837)

Finance costs

 

916,536

941,454

Change in retirement benefits obligations

 

32,778

34,835

Change in warranty provision

 

(53,133)

76,070

Change in expected credit losses allowance for trade and other receivables and other financial assets and allowance for impairment of non-financial assets

 

3,435

30,578

Change in allowance for obsolete inventories

 

40,208

1,300

Change in provision for legal claims

 

15,800

13,401

Share-based compensation

 

12,500

29,460

Foreign exchange (gain)/loss, net

 

(28,974)

15,063

Amortisation of government grants

 

(15,562)

(15,562)

Share of results of associates

 

(143)

(264)

Operating cash flows before working capital changes

 

2,617,963

1,924,446

Increase in inventories

 

(1,646,820)

(1,267,369)

Decrease in trade and other receivables

 

2,874,978

1,652,074

(Increase)/decrease in contract assets

 

(5,183,717)

860,673

Increase/(decrease) in accounts payable and accrued liabilities

 

1,597,269

(3,445,237)

(Decrease)/increase in contract liabilities

 

(2,900,419)

1,650,330

Decrease in other taxes payable

 

(285,338)

(671,572)

Cash (used in)/from operations

 

(2,926,084)

703,345

Income tax paid

 

(327,500)

(555,558)

Interest paid

 

(913,654)

(1,061,544)

Interest received

 

95,142

172,052

Net cash used in operating activities

 

(4,072,096)

(741,705)

Cash flows from investing activities

 

 

 

Repayment of loans advanced

 

1,401

2,536

Loans advanced

 

(2,205)

(18,406)

Interest received

 

-

1,000

Proceeds from sale of property, plant and equipment, net of VAT

 

27,054

18,765

Purchase of property, plant and equipment, net of VAT

 

(528,868)

(511,335)

Acquisition of intangible assets, net of VAT

 

(128,693)

(231,256)

Repayment of contingent consideration liability

 

-

(33,000)

Net cash used in investing activities

 

(631,311)

(771,696)

Cash flows from financing activities

 

 

 

Repayments of borrowings

 

(3,085,640)

(3,826,233)

Proceeds from borrowings

 

3,420,035

2,314,701

Repayment of the lease liabilities principal

 

(9,965)

(19,805)

Buy back of issued shares

 

(60,720)

-

Dividends related to Long-term Incentive Program

 

-

(5,660)

Dividends paid to non-controlling shareholders of subsidiaries

 

(395)

(92)

Dividends paid to the shareholders of the Company

 

-

(391,942)

Net cash from/(used in) financing activities

 

263,315

(1,929,031)

Net decrease in cash and cash equivalents

 

(4,440,092)

(3,442,432)

Effect of exchange rate changes on cash and cash equivalents and effect of translation to presentation currency

 

(5,455)

64,537

Cash and cash equivalents at the beginning of the period

 

10,360,588

9,952,118

Cash and cash equivalents at the end of the period

 

5,915,041

6,574,223

 

[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.

 


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

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