OREANDA-NEWS. HMS Group plc (the “Group”) (LSE: HMSG), the leading pump and compressor manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announces its audited IFRS financial results for the twelve months ended December 31, 2012.

FULL YEAR HIGHLIGHTS

(Figures in brackets are for the twelve months ended December 31, 2011)

Order backlog grew by 21% year-on-year to RUB 21.5 billion and was driven by continued steady demand for pumps, equipment and EPC services for infrastructure projects

Revenues up 22.4% year-on-year to RUB 33.7 billion (RUB 27.5 billion)

Adjusted EBITDA[1] up 13.1% year-on-year to RUB 6.2 billion (RUB 5.5 billion), with an adjusted EBITDA margin of 18.5% versus 20% in the previous year

Profit for the year contracted by 31.8% to RUB 2. 3 billion from RUB 3.4 billion

Total debt grew by 109.3% from RUB 6.4 billion to RUB 13.4 billion

Net debt grew by 150.8% to RUB 12.1 billion as of December 31, 2012 (RUB 4.8 billion)

Artem Molchanov, CEO of HMS Group commented:

“In 2012, HMS Group has continued to make good progress with underlying revenue growth across all its businesses. Though overall pace of economic recovery is still lackluster, we managed to achieve a solid 22.4% revenue growth driven by infrastructure investments in the oil and gas sector, water and nuclear industries. Importantly, the full year results were within our guidance range, both revenue and EBITDA, though they were unevenly distributed within the year, which is a peculiarity of the Group’s business model. That’s why we stick to long-term orientation rather than focusing on short-term performance.

Outstanding execution of the several flagship projects allowed us to become a winner of new tenders held in 2012, and maintain a strong level of the backlog during the whole year. This reflects strength of the diversified business model and we are pleased with the record-high order flow of Rub 33.1 bn, which we managed to secure during the year. We keep our efforts and currently we’re focusing on a number of large infrastructure projects that can happen in late 2013-early 2014.

We’ve been also trying to expand our positions on growing markets where we expect strong demand in the foreseeable future. In 2012, we completed two acquisitions: Kazankompressormash (KKM) and Apollo Goessnitz (Apollo). Being the leading Russian compressor manufacturer, KKM will allow us to diversify our product portfolio for existing customers and penetrate into new promising market of gas projects, while the worldwide operating manufacturer of specialized pumps and pump systems, Apollo will strengthen our positions in Russia on the market of pumps for oil refineries, power generation and off-shore applications and provide opportunities to leverage our export potential. Both deals have strategic importance, and I believe we will further strengthen HMS Group capabilities to service our customers, as well as provide earnings growth for our shareholders.”

KEY DEVELOPMENTS IN 2012

Operating activities

Several landmark projects in Russia have been successfully completed. Among them was the delivery of trunk line pump systems to the East Siberia – Pacific Ocean (ESPO) pipeline by Transneft. The project has strategic importance for the country’s oil industry infrastructure and features a total pipeline length of more than 4,100 km.

Another flagship project completed in 2012 was the second stage of the Vankor oilfield development, where HMS provided an integrated solution on delivery of a broad range of equipment and commissioning of water processing units as part of a produced water treatment system which was previously designed by HMS. The Vankor oilfield was launched in 2009 and is now one of the largest high-quality oil suppliers to the ESPO pipeline.

The Group secured several large infrastructure contracts across all business segments for different economic sectors, including:

- the follow-up contract for ESPO - production and delivery of 12 trunk pipeline pump units for 3 pump stations,

- projects for the production and delivery of specialist pumps for the nuclear industry in Russia and China,

- construction of 3 main water pumping stations located in Turkmenistan,

- the turn-key project for delivery and installation of a compressor station.

Two acquisitions completed during 2012:

- Kazankompressormash (KKM), one of the leading manufacturers of centrifugal and screw compressors in Russia, located in Kazan, Tatarstan. HMS acquired 77.8% of voting shares (74.35% of share capital)

- Apollo Goessnitz (Apollo), a worldwide operating manufacturer of centrifugal pumps and system equipment, located in Goessnitz (Thuringia), Germany. HMS Group acquired 75% of share capital of Apollo Goessnitz GmbH. The stake was acquired proportionally from the management, who has remained as part of the integrated team.

R&D activities

HMS Group was included in the short list of finalists of Pump Industry Awards, established by the British Pump Manufacturers’ Association. The Group was recognized finalist in the “Technical innovation of the year - Projects” nomination for its turnkey project of a pump station construction in Turkmenistan

Continued working on new models of pumps (high efficiency D type pump, high tech feed pump PA 1840-80, modernized feed pump PTA 3750-75) and equipment (control and protection system - HMS Control L3, innovative measuring equipment Mera MFR)

Automated multifunctional measuring and computing complex ACIS-6 was purchased for subsurface laboratory for analysis of subsoils for the project and design facility

Operational improvements

Ongoing implementation of unified IT infrastructure for accounting and reporting purposes, development of the head office IT security system

Ongoing development of an ERP project based on software by Infor-LN integrated with PDM systems that focuses on capturing and maintaining information on products and services through its useful life, maintaining an engineering and technological database, planning and coordinating of all transactional operations for R&D support