Fitch rates HMS Group B+

Fitch Ratings said it assigned first-time long-term foreign- and local-currency issuer default ratings of B+ to JSC HMS Group, along with short-term foreign- and local-currency short-term issuer default ratings of B.

The outlook is stable.

The ratings reflect the company’s relatively weak business profile with high geographic concentration and high exposure to investment levels in the Russian oil and gas sectors, Fitch said.

The ratings are further limited by an expectation of negative free cash flow for the foreseeable future due to higher capital expenditure and continued dividend outflow, the agency said.

The ratings also consider the company’s market-leading position in Russia in two of its three main business segments – pumps (42% market share) and oil and gas equipment (30% market share), Fitch said.

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