The 2019 year was challenging for the company, facing the influence of several factors which affected its financial results.
One of them was weak results of the oil & gas equipment business segment that were the main reason of HMS’ revenue and EBITDA downswing. We believe that implemented business optimization and cost reduction demonstrated their effectiveness, given that the oil & gas equipment business segment had shifted from the losses towards a good level of profitability.
We consider HMS’ entry into the domestic market of LNG equipment to be one of the company’s breakthroughs. The Memorandum on Strategic Partnership, signed with PAO NOVATEK in 2019, set the general principles of mutual cooperation in the area of development of domestic technological basis for LNG projects of PAO NOVATEK that will allow to equip LNG plants under construction with high-tech equipment made in Russia.
The fruitful cooperation of HMS Group and PAO NOVATEK in the field of LNG equipment production resulted in signing a contract to manufacture 6 main compression units for a natural gas liquefaction for the Obsky LNG in March 2020. The contract requires the supply of three types of gas compression units, developed by HMS’ specialists, and equipped with high-capacity gas turbine drives.
HMS Group continues its work on winning profitable large contract. As of today, orders backlog grew 5 percent year-on-year. Based upon current pipeline of large contracts and a stable inflow of recurring business, we feel optimistic about the future, despite the challenging situation in the world.