CNOOC Ltd Net Income dropped on 66.4% in 2015 while EBITDA Margin increased on 2.3 pp from 50.7% to 53.0%
24.03.2016 • About CNOOC Ltd (
$CNU) • By InTwits
CNOOC Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNOOC Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 30.4%.
- The company has potentially unprofitable business model: ROIC is at 3.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNOOC Ltd ($CNU) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 240,944 | 247,627 | 285,857 | 274,634 | 171,437 | -37.6% |
| SG&A | 2,854 | 3,377 | 7,859 | 6,613 | 5,705 | -13.7% |
| EBITDA | 121,128 | 120,044 | 134,959 | 139,201 | 90,895 | -34.7% |
| Net Income | 70,255 | 63,691 | 56,461 | 60,199 | 20,246 | -66.4% |
Balance Sheet
|
|---|
| Cash | 23,678 | 55,024 | 14,318 | 14,918 | 11,867 | -20.5% |
| Short Term Debt | 19,919 | 28,830 | 49,841 | 31,180 | 33,585 | 7.7% |
| Long Term Debt | 18,076 | 29,056 | 82,011 | 105,383 | 131,060 | 24.4% |
Cash flow
|
|---|
| Capex | 52,652 | 62,898 | 86,717 | 95,673 | 67,674 | -29.3% |
Ratios
|
|---|
| Revenue growth | 33.8% | 2.8% | 15.4% | -3.9% | -37.6% | |
| EBITDA growth | 23.7% | -0.9% | 12.4% | 3.1% | -34.7% | |
| EBITDA Margin | 50.3% | 48.5% | 47.2% | 50.7% | 53.0% | 2.3% |
| Net Income Margin | 29.2% | 25.7% | 19.8% | 21.9% | 11.8% | -10.1% |
| SG&A, % of revenue | 1.2% | 1.4% | 2.7% | 2.4% | 3.3% | 0.9% |
| CAPEX, % of revenue | 21.9% | 25.4% | 30.3% | 34.8% | 39.5% | 4.6% |
| ROIC | 32.4% | 25.7% | 18.1% | 15.8% | 3.2% | -12.5% |
| ROE | 29.4% | 22.2% | 17.3% | 16.7% | 5.3% | -11.4% |
| Net Debt/EBITDA | 0.1x | 0.0x | 0.9x | 0.9x | 1.7x | 0.8x |
Revenue and profitability
The company's Revenue dropped on 37.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 50.7% to 53.0% in 2015.
SG&A as a % of Revenue increased slightly on 0.92 pp from 2.4% to 3.3% in 2015.
Net Income marign dropped on 10.1 pp from 21.9% to 11.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
CNOOC Ltd's CAPEX/Revenue was 39.5% in 2015. CAPEX/Revenue surged on 14.1 pp from 25.4% in 2012 to 39.5% in 2015. It's average CAPEX/Revenue for the last three years was 34.9%.Battling declining revenue CNOOC Ltd invested a large share of EBITDA (74.5%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (3.23%) and ROE (5.29%). ROIC dropped on 12.5 pp from 15.8% to 3.2% in 2015. ROE dropped on 11.4 pp from 16.7% to 5.3% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 1.8x. Net Debt / EBITDA surged on 0.8x from 0.9x to 1.7x in 2015. Debt surged on 20.6% in 2015 while cash dropped on 20.5% in 2015.
Management team
The company's CEO is Yang Hua. Yang Hua has 8 years tenure at the company. The company's CFO is Zhong Hua. Zhong Hua has 8 years tenure at the company.
Appendix 1: Peers in Energy
Below you can find CNOOC Ltd benchmarking vs. other companies in Energy industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Petro Rio SA ($PRJ) | | -32.1% | -34.9% | 10,977.1% | -48.0% |
| ONEnergy Inc ($OEG) | | | | 6,002.6% | 231.5% |
| Sterling Resources Ltd ($SLG) | | -94.8% | 4,514.9% | 2,244.4% | |
| Ikkuma Resources Corp ($IKM) | 22.5% | 17.0% | -4.5% | 1,231.1% | |
| Spartan Energy Corp ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (162 companies) | 51.2% | 9.5% | 17.3% | 18.9% | -27.3% |
|---|
| CNOOC Ltd ($CNU) | | 2.8% | 15.4% | -3.9% | -37.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Americas Petrogas Inc ($BOE) | | 77.1% | 43.3% | -34.3% | 121.1% |
| TransAlta Renewables Inc ($RNW) | | | 94.4% | 94.5% | 94.5% |
| Serinus Energy Inc ($SEN) | 80.4% | 80.5% | 76.5% | 86.8% | 88.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | 88.5% |
| Polaris Infrastructure Inc ($PIF) | 58.4% | 39.9% | 33.6% | 32.0% | 86.7% |
| |
|---|
| Median (114 companies) | 34.2% | 29.3% | 31.6% | 29.6% | 35.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Seven Generations Energy Ltd ($VII) | | 56.9% | 54.0% | 106.0% | 70.0% |
| Tourmaline Oil Corp ($TOU) | 67.4% | 67.9% | 80.0% | 97.6% | 70.1% |
| Bonavista Energy Corp ($BNP) | 63.8% | 64.6% | 62.6% | 91.6% | 54.5% |
| Bellatrix Exploration Ltd ($BXE) | 42.7% | 58.6% | 83.6% | 89.6% | -115.8% |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (161 companies) | 25.5% | 24.6% | 31.1% | 29.6% | 7.2% |
|---|
| CNOOC Ltd ($CNU) | 50.3% | 48.5% | 47.2% | 50.7% | 53.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | 712.8% |
| Petroshale Inc ($PSH) | 30.6% | | 346.6% | 865.9% | |
| Toro Oil & Gas Ltd ($TOO) | 192.4% | 139.0% | 39.2% | 808.7% | |
| Athabasca Oil Corp ($ATH) | 176.2% | 2,426.4% | 596.6% | 504.7% | 315.2% |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (164 companies) | 43.3% | 51.1% | 39.2% | 48.9% | 31.6% |
|---|
| CNOOC Ltd ($CNU) | 21.9% | 25.4% | 30.3% | 34.8% | 39.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% |
| Sea Dragon Energy Inc ($SDX) | -10.1% | 8.1% | 21.8% | 32.9% | |
| Raging River Exploration Inc ($RRX) | | | | 29.1% | 6.2% |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | 24.2% |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (167 companies) | 4.4% | 3.0% | 4.5% | 5.1% | -8.4% |
|---|
| CNOOC Ltd ($CNU) | 32.4% | 25.7% | 18.1% | 15.8% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | 7.4x |
| Lightstream Resources Ltd ($LTS) | | 2.0x | | 27.8x | |
| Petroshale Inc ($PSH) | 0.1x | | | 21.7x | |
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (138 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 2.8x |
|---|
| CNOOC Ltd ($CNU) | 0.1x | 0.0x | 0.9x | 0.9x | 1.7x |
