OREANDA-NEWS. August 3, 2012. HMS Group (LSE: HMSG), the leading pump manufacturer, provider of flow control solutions and engineering works for oil and gas fields, power generation and water utilities in Russia and the CIS, today issues the following statement regarding orders received during Q2 2012.

HIGHLIGHTS:

In Q2 2012, order intake under management accounts more than doubled, up 143% YoY and amounted to Rub 10.5 bn (USD 326 mn*) versus Rub 4.3 bn (USD 134 mn) in Q2 2011 mainly driven by new orders in the industrial pumps business segment

HMS signed a Rub 4.6 bn follow-up contract to provide 12 pump units for 3 pump stations at the East Siberia – Pacific Ocean oil trunk pipeline

HMS signed a contract worth more than Rub 0.5 bn for delivery of a number of different modular compressor packages for processing of associated gas and commissioning on the customer’s sites

In 1H 2012, total order inflow was 2.3 times higher as compared to the same period of the previous year and amounted to Rub 18,372 mn (USD 568 mn) versus Rub 7,870 mn (USD 243 mn).

Order Intake (millions of Rub)

Q2 2012

Q2 2011

Д

Business segments

         Industrial pumps

6,852

1,654

+314%

         Oil and Gas equipment

1,862

1,304

+43%

EPC, including

1,417

1,069

+151%

         Construction

1,083

355

+205%

         Project and design

334

714

-53%

Others

401

313

+28%

Total

10,532

4,340

+143%

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    314% YoY from Rub 1,654 mn to Rub 6,852 mainly as a result of orders increase in pumps for oil transportation and oil refineries as well as pumps for nuclear power generation. Orders of pumps for oil upstream and thermal power generation contracted, which was more than offset by strong demand from the customers in the abovementioned end-markets. In Q2, HMS has signed follow-up contract for the ESPO project totaled Rub 4.6 bn and several mid-size contracts for nuclear pumps. The rest part of the order flow was packed with a large number of contracts with expected revenue less than Rub 30 mn each.

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.

In Q2 2012, the order intake in the oil and gas equipment segment grew by 43% and amounted to Rub 1,862 mn versus Rub 1,304 mn at the end of the Q2 2011. Continued strong demand for modular equipment and automated group metering units, upturn in orders for compressors as well as orders for tanks and vessels produced by Sibneftemash were among the main drivers of the solid business segment order flow and offset contraction of orders for the other oil and gas equipment. Aside from the Rub 0.5 bn order for delivery and commissioning of compressor packages, 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.

In Q2 2012, the order intake in the EPC business segment rose by 33% from Rub 1,069 mn to Rub 1,417 mn mainly driven by orders for construction woks. The orders for construction grew by 205% to Rub 1,083 mn versus Rub 355 mn in Q2 2011, mainly driven by mid-size contracts with the expected revenue less than Rub 500 mn each. The inflow of orders for project and design services contracted by 53% from Rub 714 mn in Q2 2011 to Rub 334 mn in Q2 2012.

Other

Other orders for a wide range of services and non-core products and equipment were up 28% YoY from Rub 241 mn in Q2 2011 to Rub 341 mn in Q2 2012.