OREANDA-NEWS. HMS Group plc (the “Group”) (LSE: HMSG), the leading pump manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announces its consolidated condensed interim financial information including independent review report by PricewaterhouseCoopers Limited for the six months ended June 30, 2013.

1H 2013 HIGHLIGHTS

Backlog decreased by 23% year-on-year to Rub 17,569 million

Order intake was down by 18% year-on-year from Rub 18,372 million in 1H 2012 to Rub 15,072 million in 1H 2013

Revenue increased by 3% year-on-year to Rub 15,455 million driven by revenue growth in industrial pumps and compressors business segments

EBITDA1 totaled Rub 2,172 million, down 12% year-on-year; EBITDA margin was 14.1% compared to 16.5% for 1H 2012

Operating profit2 reached Rub 1,847 million, showing a 10% year-on-year growth; operating margin stood at 12.0%

Profit for the period2 totaled Rub 914 million, 5% lower than for 1H 2012; earnings per share (EPS) were Rub 7.18

Net debt grew by 40% year-on-year to Rub 14,900 million as of June 30, 2013, resulting in Net debt-to-EBITDA (LTM) ratio at 2.5x

Interest coverage ratio (LTM) stood at 2.6

Return on capital employed (ROCE) LTM3 was 14.4%

RECENT DEVELOPMENTS

HMS Group concluded two material contracts totaled Rub 2.5 billion

HMS Group signed the agreements for refinancing of Rub 4.58 billion bank loans

Commenting on the results, Artem Molchanov, Managing Director (CEO) of HMS Group, said,

“In the first half of 2013, despite the lack of new large-scale projects, we enjoyed a solid financial performance in our core business segments while the construction sub-segment delivered lower-than-expected results with negative EBITDA, which inevitably affected the total profitability of the Group. The Group's revenue showed a small growth compared to last year period and amounted to Rub 15.5 billion, while EBITDA declined to Rub 2.2 billion. Meanwhile, given some volatility of our business quarter-to-quarter, we think that financial indicators taken for the last twelve months provide more representative picture than the interim results. Comparing the figures for the last 12 months, we see a strong double-digit year-on-year growth in revenue (by 20%) and EBITDA (by 22%).

We expect to demonstrate better performance in the following reporting period. I am pleased to say that recently we've signed two material contracts totaled Rub 2.5 billion and hope to conclude extra contracts by the end of 2013”.

OPERATING REVIEW

In 1H 2013 the Group's total backlog amounted to Rub 17,569 million, down by 23% year-on-year due to lack of new large-scale projects along with a poor performance of the construction sub-segment. Meanwhile, the backlog in all core business segments demonstrated positive dynamics in the reporting period. In the industrial pumps (excl. ESPO) and the compressors business segments the backlog experienced a double-digit growth year-on-year to Rub 6,854 million and Rub 1,984 million respectively. In the oil and gas equipment business segment HMS Group managed to replace Vankor contract with a series of smaller agreements, thus building up the Rub 3,009 million oil and gas equipment backlog in line with 1H 2012. Negative dynamics in the EPC business segment was caused by a 44% decrease in the backlog of the construction sub-segment.

The order intake4 decrease by 18% in 1H 2013 was stipulated by the high base in 1H 2012 because of Rub 4.5 billion ESPO contract. Excluding this contract, the order intake grew across all business segments except the construction.