CNOOC Ltd reports 96.9% Net Income decline and 8.2 pp EBITDA Margin decline from 53.0% to 44.8%
23.03.2017 • About CNOOC Ltd (
$CNU) • By InTwits
CNOOC Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNOOC Ltd is a company in decline: FY2016 revenue growth was -14.6%, 5 years revenue CAGR was -9.5%
- The company has unprofitable business model: ROIC is at -0.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNOOC Ltd ($CNU) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 247,627 | 285,857 | 274,634 | 171,437 | 146,490 | -14.6% |
| SG&A | 3,377 | 7,859 | 6,613 | 5,705 | 6,493 | 13.8% |
| EBITDA | 120,044 | 134,959 | 139,201 | 90,895 | 65,594 | -27.8% |
| Net Income | 63,691 | 56,461 | 60,199 | 20,246 | 637 | -96.9% |
Balance Sheet
|
|---|
| Cash | 55,024 | 14,318 | 14,918 | 11,867 | 13,735 | 15.7% |
| Short Term Debt | 28,830 | 49,841 | 31,180 | 33,585 | 19,678 | -41.4% |
| Long Term Debt | 29,056 | 82,011 | 105,383 | 131,060 | 130,798 | -0.2% |
Cash flow
|
|---|
| Capex | 62,898 | 86,717 | 95,673 | 67,674 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 2.8% | 15.4% | -3.9% | -37.6% | -14.6% | |
| EBITDA growth | -0.9% | 12.4% | 3.1% | -34.7% | -27.8% | |
| EBITDA Margin | 48.5% | 47.2% | 50.7% | 53.0% | 44.8% | -8.2% |
| Net Income Margin | 25.7% | 19.8% | 21.9% | 11.8% | 0.4% | -11.4% |
| SG&A, % of revenue | 1.4% | 2.7% | 2.4% | 3.3% | 4.4% | 1.1% |
| CAPEX, % of revenue | 25.4% | 30.3% | 34.8% | 39.5% | | -39.5% |
| ROIC | 25.7% | 18.1% | 15.8% | 3.2% | -0.6% | -3.9% |
| ROE | 22.2% | 17.3% | 16.7% | 5.3% | 0.2% | -5.1% |
| Net Debt/EBITDA | 0.0x | 0.9x | 0.9x | 1.7x | 2.1x | 0.4x |
Revenue and profitability
The company's Revenue dropped on 14.6%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 8.2 pp from 53.0% to 44.8% in FY2016.
SG&A as a % of Revenue increased slightly on 1.1 pp from 3.3% to 4.4% in FY2016.
Net Income marign dropped on 11.4 pp from 11.8% to 0.43% in FY2016.
Return on investment
The company operates at negative ROIC (-0.62%) and low but positive ROE (0.17%). ROIC decreased on 3.9 pp from 3.2% to -0.62% in FY2016. ROE decreased on 5.1 pp from 5.3% to 0.17% in FY2016.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 1.7x to 2.1x in FY2016. Debt decreased on 8.6% while cash jumped on 15.7%.
Management team
The company's CEO Yang Hua has spent 8 years at the company. CNOOC Ltd'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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | -18.4% | 141.2% |
| Seven Generations Energy Ltd ($VII) | | 115.7% | 340.2% | 39.0% | 94.4% |
| Athabasca Oil Corp ($ATH) | | 342.7% | 5.5% | -22.9% | 73.1% |
| Painted Pony Petroleum Ltd ($PPY) | | 41.3% | 56.0% | -42.5% | 60.7% |
| ONEnergy Inc ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 16.1% | 17.0% | -27.7% | -19.1% |
|---|
| CNOOC Ltd ($CNU) | | 15.4% | -3.9% | -37.6% | -14.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($BOE) | 77.1% | 43.3% | -34.3% | 121.1% | |
| TransAlta Renewables Inc ($RNW) | | 94.4% | 94.5% | 94.5% | 91.1% |
| Serinus Energy Inc ($SEN) | 80.5% | 76.5% | 86.8% | 88.5% | |
| Advantage Oil & Gas Ltd ($AAV) | 62.0% | 84.5% | 92.5% | 88.5% | 90.3% |
| Polaris Infrastructure Inc ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
| |
|---|
| Median (115 companies) | 32.0% | 32.1% | 32.4% | 33.6% | 32.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($GXO) | 59.4% | 64.5% | 70.8% | 201.9% | |
| Perpetual Energy Inc ($PMT) | 35.5% | 70.7% | 58.0% | 110.3% | |
| Petro Rio SA ($PRJ) | -4,809.7% | -6,899.7% | 28.2% | 90.7% | |
| Peyto Exploration & Development Corp ($PEY) | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% |
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| CNOOC Ltd ($CNU) | 48.5% | 47.2% | 50.7% | 53.0% | 44.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | 1,997.8% | 712.8% | |
| WesternZagros Resources Ltd ($WZR) | | | | 385.6% | |
| Athabasca Oil Corp ($ATH) | 2,426.4% | 596.6% | 504.7% | 315.2% | 83.7% |
| TORC Oil & Gas Ltd ($TOG) | 453.8% | 466.9% | 104.5% | 229.4% | 76.3% |
| Seven Generations Energy Ltd ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 43.8% | 39.2% | 45.6% | 27.6% | 23.0% |
|---|
| CNOOC Ltd ($CNU) | 25.4% | 30.3% | 34.8% | 39.5% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($ERF) | -17.3% | 10.2% | 11.5% | -55.5% | 16.3% |
| Whitecap Resources Inc ($WCP) | 7.1% | 8.1% | 9.6% | -10.6% | 10.1% |
| Ecopetrol SA ($ECP) | 29.3% | 24.4% | 16.5% | 3.0% | 9.6% |
| Parkland Fuel Corp ($PKI) | 22.3% | 23.3% | 9.9% | 7.8% | 8.6% |
| Inter Pipeline Ltd ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| CNOOC Ltd ($CNU) | 25.7% | 18.1% | 15.8% | 3.2% | -0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($PXX) | -0.2x | -0.1x | 0.2x | 3,726.1x | -0.2x |
| Paramount Resources Ltd ($POU) | 14.6x | 23.9x | 8.9x | 421.5x | -5.8x |
| Precision Drilling Corp ($PD) | 2.2x | 1.9x | 2.0x | 68.4x | 7.6x |
| Trican Well Service Ltd ($TCW) | 2.5x | 3.4x | 2.9x | 31.4x | |
| Trilogy Energy Corp ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.6x | 1.5x | 1.4x | 2.7x | 2.7x |
|---|
| CNOOC Ltd ($CNU) | 0.0x | 0.9x | 0.9x | 1.7x | 2.1x |
