REG-HMS Group HMS Group Reports Rub 6.7 billion EBITDA for FY 2021
29/04/2022 11:30
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HMS Group (HMSG)
HMS Group Reports Rub 6.7 billion EBITDA for FY 2021
29-Apr-2022 / 13:16 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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HMS Group Reports Rub 6.7 billion EBITDA for FY 2021
Moscow, Russia - April 29, 2022 - 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 full year ended December 31,
2021.
Financial highlights FY 2021:
• Revenue: Rub 57.2 bn (+23% yoy)
• EBITDA 1 1 : Rub 6.7 bn (+36% yoy), EBITDA margin at 11.8%
• Operating profit: Rub 3.8 bn (+116% yoy)
• Profit for the period: Rub 1.2 bn
• Total debt: Rub 22.7 bn (+2% yoy)
• Net debt: Rub 13.9 bn (+18% yoy)
• Net debt-to-EBITDA LTM ratio: 2.07x
Operational highlights FY 2021:
• Order intake 2 2 : Rub 47.7 bn (-12% yoy)
• Backlog 3 3 : Rub 42.3 bn (-22% yoy)
HMS GROUP PERFORMANCE
FY 2021 financial Results
• Order intake was down to Rub 47.7 billion, by 12% yoy, compared with
Rub 54.2 billion for FY 2020, mainly due to less large contracts
signed in the reporting period. All business segments grew except the
compressors. In terms of contracts type, large contracts were down.
• Backlog was Rub 42.3 billion, down by 22% yoy, compared with Rub 53.9
billion at the end of 2020, but in the same time the company is
working on a number of opportunities in 2022. In terms of contracts
type, both recurring business and large contracts decreased.
• Revenue grew to Rub 57.2 billion by 23% yoy, compared with Rub 46.5
billion for FY 2020, based on revenue growth in all business segments
except the pumps.
• EBITDA was Rub 6.7 billion, up by 36% yoy, implying EBITDA margin of
11.8%.
• Revenue from large contracts grew 66% yoy, and revenue from recurring
business was up by 5% yoy. EBITDA from large contracts increased 91%
yoy, while EBITDA from recurring business declined 12% yoy.
• Profit for the period was Rub 1.2 billion, compared with loss for the
period at Rub 816 million for FY 2020.
• Free cash outflow was Rub 1.0 billion, compared with free cash inflow
of Rub 3.0 billion for FY 2020, due to the higher working capital
requirements for execution of large contracts that are within the
normal quarterly volatility.
in millions of 2021 2020 Change 4Q 2021 3Q 2021 Change
Rub yoy qoq
Orders 47,680 54,205 -12% 10,846 5,951 82%
Backlog 42,264 53,851 -22% 42,264 47,259 -11%
Revenue 57,159 46,476 23% 16,038 15,326 5%
EBITDA 6,723 4,947 36% 1,526 2,341 -35%
EBITDA margin 11.8% 10.6% 9.5% 15.3%
Profit for the 1,241 na 32 831 -96%
year/period (816)
Free cash flow 2,958 na 3,491 231 1,414%
(982)
Expenses and Operating profit
▪ Cost of sales was Rub 45.7 billion, up by 23% yoy, in line with
revenue growth, compared with Rub 37.1 billion for FY 2020, mainly due
to the growth in materials and components costs (+26% yoy).
in millions of Rub 2021 2020 Change yoy Share of FY Share of FY
2021 revenue 2020 revenue
Cost of sales 45,737 37,071 23% 80.0% 79.8%
Materials and 30,023 23,760 26% 52.5% 51.1%
components
Labour costs incl 7,673 6,906 11% 13.4% 14.9%
Social taxes
Depreciation and 2,087 2,122 -2% 3.7% 4.6%
amortization
Construction and design 3,643 2,557 42% 6.4% 5.5%
4 4
Others 2,310 1,726 34% 4.0% 3.7%
▪ Gross profit grew to Rub 11.4 billion, by 21% yoy, compared with Rub
9.4 billion for FY 2020.
▪ SG&A expenses 5 5 were up 4% yoy.
Distribution & transportation expenses were down 9% yoy due to lower
transportation costs (-28% yoy). As a share of revenue, distribution &
transportation expenses declined to 3.1%, compared with 4.3% for FY 2020.
General & administrative expenses were up to Rub 5.7 billion (+9% yoy)
mainly due the growth in labour costs incl. social taxes (+15% yoy). As a
share of revenue, general & administrative expenses were down to 10.0%,
compared with 11.3% for FY 2020.
▪ Operating profit was up to Rub 3.8 billion (+185% yoy), compared with
Rub 1.3 billion for FY 2020.
in millions of Rub 2021 2020 Change Share of FY Share of FY
yoy 2021 revenue 2020 revenue
Gross profit 11,423 9,405 21% 20.0% 20.2%
Distribution & 1,799 1,986 -9% 3.1% 4.3%
transportation
General & administrative 5,704 5,243 9% 10.0% 11.3%
SG&A expenses 7,503 7,228 4% 13.1% 15.6%
Other operating expenses 111 412 -73% 0.2% 0.9%
Operating expenses ex. Cost 7,614 7,641 0% 13.3% 16.4%
of sales
Operating profit 3,809 1,338 185% 6.7% 2.9%
Finance costs 1,976 1,926 3% 3.5% 4.1%
▪ Finance costs increased to Rub 2.0 billion, up by 3% yoy, mainly due
to a growth in interest expenses (+2% yoy) because of higher interest
rates, compared with FY 2020.
▪ Average interest rate grew to 9.91% p.a., compared with 8.00% p.a.
last year.
in millions of Rub 2021 2020 Change yoy
Finance costs 1,976 1,926 3%
Interest rate, average 9.91% 8.00%
Interest rate Rub, average 10.03% 8.12%
BUSINESS SEGMENTS PERFORMANCE
Industrial pumps
▪ Order intake was Rub 22.2 billion, up by 25% yoy, compared with Rub
17.8 billion for FY 2020, due to both the large long-term contract
signed in 2Q 2021 and a growth in recurring orders.
▪ Backlog was Rub 20.9 billion, up 14% yoy, compared with Rub 18.2
billion at the end of FY 2020, based on large contracts and recurring
business.
▪ Revenue was down to Rub 20.0 billion (-2% yoy), compared with Rub 20.3
billion for FY 2020.
▪ EBITDA was down 16% yoy to Rub 2.5 billion, compared with Rub 2.9
billion for FY 2020, due to less revenue generated by both recurring
business and large contracts. EBITDA margin was 12.3%, compared with
14.5% during FY 2020.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Orders 22,245 17,773 25% 5,747 4,003 44%
Backlog 20,851 18,227 14% 20,851 21,753 -4%
Revenue 19,951 20,256 -2% 6,804 5,157 32%
EBITDA 2,455 2,931 -16% 910 711 28%
EBITDA margin 12.3% 14.5% 13.4% 13.8%
Oil and Gas equipment & projects (OGEP)
▪ Order intake grew to Rub 17.9 billion, up by 32% yoy, compared with
Rub 13.6 billion during FY 2020, due to large contracts signed in the
reporting period.
▪ Backlog stayed almost unchanged at Rub 9.3 billion, supported by large
contracts.
▪ Revenue grew to Rub 18.4 billion, up by 63% yoy, compared with Rub
11.3 billion for FY 2020, due to large contracts.
▪ EBITDA increased to Rub 1.8 billion, up by 653% yoy, compared with Rub
241 million for FY 2020 mainly due to a larger share of large
contracts in the reporting period. EBITDA margin was 9.9%, compared
with 2.1% for FY 2020.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Orders 17,886 13,568 32% 2,511 1,348 86%
Backlog 9,278 9,318 0% 9,278 11,697 -21%
Revenue 18,425 11,284 63% 5,057 5,027 1%
EBITDA 1,818 241 653% 425 575 -26%
EBITDA margin 9.9% 2.1% 8.4% 11.4%
Compressors
▪ Order intake declined to Rub 5.5 billion, down by 76% yoy, compared
with Rub 22.6 billion for FY 2020, due to less large contracts signed
in the reporting period.
▪ Backlog was Rub 11.4 billion, down by 54% yoy, compared with Rub 24.8
billion at the end of 2020.
▪ Revenue grew to Rub 19.9 billion, up by 33% yoy, compared with Rub
14.9 billion for FY 2020.
▪ EBITDA increased to Rub 2.5 billion, up by 31% yoy, compared with Rub
1.9 billion for FY 2020. EBITDA margin was down to 12.8%, compared
with 13.0% for FY 2020.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Orders 5,533 22,617 -76% 2,570 581 342%
Backlog 11,419 24,765 -54% 11,419 12,897 -11%
Revenue 19,891 14,947 33% 4,634 5,330 -13%
EBITDA 2,537 1,939 31% 488 1,071 -54%
EBITDA margin 12.8% 13.0% 10.5% 20.1%
Construction
▪ Order intake equaled Rub 2.0 billion. Backlog was down to Rub 0.7
billion.
▪ Revenue was up to Rub 898 million, compared with Rub 718 million for
FY 2020. EBITDA was Rub 51 million, compared with Rub (63) million
last year.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Orders 2,017 247 718% 17 19 -8%
Backlog 716 1,541 -54% 716 911 -21%
Revenue 898 718 25% 221 319 -31%
EBITDA 51 (63) na 24 48 -50%
EBITDA margin 5.7% -8.8% 10.9% 15.1%
Working capital and Capital expenditures
▪ Working capital increased to Rub 10.0 billion (+49% yoy), compared
with Rub 6.8 billion at the end of 2020. Working capital changes are
within the normal quarterly volatility.
▪ As a share of revenue, working capital was at 17.6% vs. 14.5% at the
end of 2020.
▪ Maintenance capex was Rub 1.4 billion, down by 1% yoy.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Working capital 10,047 6,752 49% 10,047 13,390 -25%
Working capital / 17.6% 14.5% 17.6% 23.9%
Revenue LTM
Maintenance capex 1,384 1,392 -1% 374 353 6%
Acquisitions - - - -
DEBT POSITION
▪ Total debt was up 2% yoy to Rub 22.7 billion, compared with Rub 22.2
billion at the end of 2020.
▪ Net debt was Rub 13.9 billion (+18% yoy), compared with Rub 11.8
billion at the end of 2020.
▪ Net debt to EBITDA LTM ratio was 2.07x, down from 2.39x at the end of
2020.
in millions of Rub 2021 2020 Change yoy 4Q 2021 3Q 2021 Change qoq
Total debt 22,668 22,175 2% 22,668 22,642 0%
Net debt 13,896 11,814 18% 13,896 16,771 -17%
Net debt / EBITDA LTM 2.07 2.39 2.07 2.48
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
▪ On March 3, 2022, the London Stock Exchange has suspended the
admission to trading of the Company's GDRs.
DEBT MANAGEMENT
▪ In March 2022, based on the Federal Law № 71-FZ dated 26 March 2022,
the Group fixed for the three months the interest rates of its total
Rub-denominated floating rate borrowing portfolio in amount of Rub 3.9
billion at 12.5%, 13.5% and 16.5% per annum for the April, May and
June 2022, respectively.
▪ In April 2022, the Group signed preferential credit facility
agreements in the total amount of Rub 4.9 billion at 11% per annum
with 1-year maturity for financing its operational needs.
▪ As of April 1, 2022, HMS Group has only Rub 187 million to be repaid
in 2022.
▪ The average interest rate grew to 10.15% per annum as of April 1,
2022.
in millions of Rub 2022 2023 2024 2025
Debt to be repaid as of April 1, 2022 187 9,994 11,517 281
CONTRACTS
▪ In February 2022, HMS Group announced the signing of Rub 7.0 billion
contract to manufacture and deliver oil & gas equipment in 2023-2025.
▪ In April 2022, HMS Group announced the signing of Rub 3.3 billion
contract to manufacture and deliver gas transportation units in
2023-2024 to a gas condensate field located in Russia.
BUYBACK PROGRAM
▪ After the reporting date, no GDRs have been purchased under the
buyback program. The company holds 257,960 of its GDRs in treasury
(1.1% of its issued share capital).
***
No Webcast will be hold
Contacts:
Investor Relations, 6 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
HMS Hydraulic Machines & Systems Group plc
Consolidated Statement of Financial Position at 31 December 2021
(in thousands of Russian Roubles, unless otherwise stated)
31 December
31 December 2021 2020
ASSETS
Non-current assets:
Property, plant and equipment 14,045,362 14,684,279
Other intangible assets 1,429,904 1,743,399
Goodwill 3,159,502 3,255,984
Right-of-use assets 414,861 183,211
Investments in associates 95,358 94,307
Deferred income tax assets 827,200 786,455
Other long-term assets 21,606 42,252
Investment property 140,598 176,833
Total non-current assets 20,134,391 20,966,720
Current assets:
Inventories 9,067,145 8,847,749
Trade and other receivables and 17,050,792 15,598,766
other financial assets
Contract assets 9,718,947 6,201,354
Current income tax receivable 72,588 94,972
Cash and cash equivalents 8,771,642 10,360,588
Total current assets 44,681,114 41,103,429
TOTAL ASSETS 64,815,505 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 566,766 646,427
Retained earnings 5,856,944 5,510,974
Equity attributable to the 10,031,191 9,825,602
shareholders of the Company
Non-controlling interests 3,699,312 3,518,674
TOTAL EQUITY 13,730,503 13,344,276
LIABILITIES
Non-current liabilities:
Long-term borrowings 21,649,561 20,452,736
Deferred income tax liability 1,445,176 1,421,489
Retirement benefit obligations 612,140 646,213
Provisions for liabilities and 316,506 228,199
charges
Lease liabilities 346,376 153,048
Other long-term payables 228,282 230,581
Total non-current liabilities 24,598,041 23,132,266
Current liabilities:
Trade and other payables 21,729,699 17,969,950
Contract liabilities 2,323,511 4,304,845
Short-term borrowings 611,966 1,548,574
Provisions for liabilities and 599,184 589,762
charges
Retirement benefit obligations 73,582 77,859
Lease liabilities 59,928 20,440
Current income tax payable 240,953 134,080
Other taxes payable 848,138 948,097
Total current liabilities 26,486,961 25,593,607
TOTAL LIABILITIES 51,085,002 48,725,873
TOTAL EQUITY AND LIABILITIES 64,815,505 62,070,149
HMS Hydraulic Machines & Systems Group plc
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
for the year ended 31 December 2021
(in thousands of Russian Roubles, unless otherwise stated)
2021 2020
Revenue 57,159,315 46,476,487
Cost of sales (45,736,646) (37,071,430)
Gross profit 11,422,669 9,405,057
Distribution and transportation (1,798,784) (1,985,928)
expenses
General and administrative (5,704,013) (5,242,566)
expenses
Other operating expenses, net (110,916) (412,472)
Impairment of goodwill - (425,668)
Operating profit 3,808,956 1,338,423
Finance income 181,591 251,571
Finance costs (1,976,275) (1,926,310)
Share of results of associates (470) (161)
Profit/(loss) before income tax 2,013,802 (336,477)
Income tax expense (772,783) (479,814)
Profit/(loss) for the year 1,241,019 (816,291)
Profit/(loss) attributable to:
1,032,202
Shareholders of the Company (971,996)
Non-controlling interests 208,817 155,705
Profit/(loss) for the year 1,241,019 (816,291)
Other comprehensive (loss)/income:
Items that will not be
subsequently reclassified to
profit or loss
Remeasurement of post-employment 49,232 (5,321)
benefit obligations
Items that may be reclassified
subsequently to profit or loss
Currency translation differences (71,684) 693,105
Currency translation differences 1,521 (21)
of associates
Other comprehensive (loss)/income (20,931) 687,763
for the year
Total comprehensive income/(loss) 1,220,088 (128,528)
for the year
Total comprehensive income/(loss)
attributable to:
981,741 (288,238)
Shareholders of the Company
Non-controlling interests 238,347 159,710
Total comprehensive income/(loss) 1,220,088 (128,528)
for the year
Basic and diluted profit/(loss)
per ordinary share for 8.90 (8.50)
profit/(loss) attributable to the
ordinary shareholders (RR per
share)
HMS Hydraulic Machines & Systems Group plc
Consolidated Statement of Cash Flows for the year ended 31 December
2021
(in thousands of Russian Roubles, unless otherwise stated)
2021 2020
Cash flows from operating activities
Profit/(loss) before income tax 2,013,802 (336,477)
Adjustments for:
Depreciation and amortisation 2,424,217 2,451,191
Gain from disposal of property, plant and (84,044) (1,821)
equipment and intangible assets
Finance income (181,591) (251,571)
Finance costs 1,976,275 1,926,310
Change in retirement benefits obligations 36,821 82,075
Change in warranty provision 112,329 136,752
Change in expected credit losses allowances
for financial assets and allowance for 50,299 104,002
impairment of non-financial assets
Change in allowance for obsolete inventories 146,044 10,598
Change in provision for legal claims 58,846 83,987
Share-based compensation 25,000 58,921
Foreign exchange (gain)/loss, net (76,165) 73,534
Amortisation of government grants (37,528) (36,048)
Impairment of taxes - 10,418
Impairment of goodwill - 425,668
Impairment of property, plant and equipment - 13,936
Change in provision for tax risks, other than 15,667 9,898
income tax
Share of results of associates 470 161
Operating cash flows before working capital 6,480,442 4,761,534
changes
Increase in inventories (325,574) (869,830)
(Increase)/decrease in trade and other (1,281,589) 2,967,741
receivables
(Increase)/decrease in contract assets (3,506,361) 1,916,049
Increase/(decrease) in accounts payable and 3,397,639 (3,361,448)
accrued liabilities
(Decrease)/increase in contract liabilities (1,947,373) 2,056,816
Decrease in taxes payable (101,761) (683,045)
Cash from operations 2,715,423 6,787,817
Income tax paid (644,282) (820,008)
Interest paid (1,952,685) (1,887,821)
Interest received 178,458 259,533
Net cash from operating activities 296,914 4,339,521
Cash flows from investing activities
Repayment of loans advanced 5,172 6,953
Loans advanced (39,879) (20,203)
Proceeds from sale of property, plant and 140,659 55,948
equipment and intangible assets, net
Purchase of property, plant and equipment, net (1,075,212) (937,132)
of VAT
Acquisition of intangible assets, net of VAT (309,217) (454,417)
Repayment of contingent consideration - (33,000)
liability
Net cash used in investing activities (1,278,477) (1,381,851)
Cash flows from financing activities
Repayments of borrowings (13,534,754) (11,478,749)
Proceeds from borrowings 13,820,510 9,127,605
Proceeds from government grant - 28,092
Repayment of the lease liabilities principal (24,852) (35,905)
Buy back of issued shares (60,720) (1,705)
Dividends related to Long-term Incentive - (5,660)
Program
Dividends paid to non-controlling shareholders (56,909) (55,162)
of subsidiaries
Dividends paid to the shareholders of the (740,432) (391,942)
Company
Net cash used in financing activities (597,157) (2,813,426)
Net (decrease)/increase in cash and cash (1,578,720) 144,244
equivalents
Effect of exchange rate changes on cash and
cash equivalents and effect of translation to (10,226) 296,076
presentation currency
Effect of changes in expected credit losses - (31,850)
allowance for cash and cash equivalents
Cash and cash equivalents at the beginning of 10,360,588 9,952,118
the year
Cash and cash equivalents at the end of the 8,771,642 10,360,588
year
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7 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.
8 2 Order intake - Portfolio of contracts and orders signed for a
period
9 3 Backlog - Portfolio of uncompleted orders and contracts
10 4 Construction and design and engineering services of subcontractors
11 5 SG&A expenses - Selling, General and Administrative Expenses,
compiled of distribution & transportation expenses plus general &
administrative ones
══════════════════════════════════════════════════════════════════════════
ISIN: US40425X4079
Category Code: ACS
TIDM: HMSG
LEI Code: 254900DDFETNLASV8M53
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 158691
EQS News ID: 1339849
End of Announcement EQS News Service
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