I-CABLE Communications Ltd EBITDA dropped on 47.7% in 2015 and Revenue decreased on 9.4%
25/02/2016 • About I-CABLE Communications Ltd (
$1097) • By InTwits
I-CABLE Communications Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- I-CABLE Communications Ltd is a company in decline: 2015 revenue growth was -9.4%, 5 years revenue CAGR was -5.5%
- EBITDA Margin is quite volatile: 7.2% in 2015, 12.5% in 2014, 11.6% in 2013, 2.2% in 2012, 7.9% in 2011
- I-CABLE Communications Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.5%. At the same time it's a lot of higher than industry average of 7.5%.
- CAPEX is quite volatile: 18.9 in FY2015, 20.5 in FY2014, 79.6 in FY2013, 247 in FY2012, 272 in FY2011
- The company has unprofitable business model: ROIC is at -27.9%
- It operates with high leverage: Net Debt/EBITDA is 2.0x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
I-CABLE Communications Ltd ($1097) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,110 | 2,127 | 1,932 | 1,666 | 1,510 | -9.4% |
| Gross Profit | 2,018 | 2,017 | 1,829 | 1,567 | 1,425 | -9.1% |
| SG&A | 409 | 389 | 372 | 334 | 342 | 2.7% |
| EBITDA | 166 | 47 | 225 | 208 | 109 | -47.7% |
| Net Income | -180 | -278 | -93 | -139 | -233 | 67.1% |
Balance Sheet
|
|---|
| Cash | 338 | 288 | 182 | 62 | 82 | 32.1% |
| Short Term Debt | 0 | 0 | 0 | 100 | 300 | 200.0% |
| Long Term Debt | 0 | 100 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 223 | 215 | 147 | 188 | 197 | 4.9% |
Ratios
|
|---|
| Revenue growth | 5.4% | 0.8% | -9.2% | -13.8% | -9.4% | |
| EBITDA growth | 72.8% | -71.8% | 378.5% | -7.2% | -47.7% | |
| Gross Margin | 95.6% | 94.8% | 94.7% | 94.1% | 94.4% | 0.3% |
| EBITDA Margin | 7.9% | 2.2% | 11.6% | 12.5% | 7.2% | -5.3% |
| Net Income Margin | -8.5% | -13.1% | -4.8% | -8.4% | -15.4% | -7.1% |
| SG&A, % of revenue | 19.4% | 18.3% | 19.2% | 20.0% | 22.7% | 2.7% |
| CAPEX, % of revenue | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% | 1.8% |
| ROIC | -12.7% | -25.1% | -10.3% | -15.3% | -27.9% | -12.6% |
| ROE | -10.9% | -19.6% | -7.5% | -12.4% | -24.9% | -12.5% |
| Net Debt/EBITDA | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x | 1.8x |
Revenue and profitability
The company's Revenue decreased on 9.4% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.3 pp from 12.5% to 7.2% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased on 2.7 pp from 20.0% to 22.7% in 2015.
Net Income marign decreased on 7.1 pp from -8.4% to -15.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 I-CABLE Communications Ltd had CAPEX/Revenue of 13.0%. CAPEX/Revenue increased on 3.0 pp from 10.1% in 2012 to 13.0% in 2015. Average CAPEX/Revenue for the last three years was 10.6%.Battling declining revenue I-CABLE Communications Ltd made large investments to CAPEX (180% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-27.88%) and ROE (-24.91%). ROIC dropped on 12.6 pp from -15.3% to -27.9% in 2015. ROE dropped on 12.5 pp from -12.4% to -24.9% in 2015.
Leverage (Debt)
Debt level is 2.0x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA surged on 1.8x from 0.2x to 2.0x in 2015. Debt jumped on 200% in 2015 while cash surged on 32.1% in 2015.
Appendix 1: Peers in Media
Below we provide I-CABLE Communications Ltd benchmarking against other companies in Media industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CMMB Vision Holdings Ltd ($471) | | | 168.1% | 27.8% | |
| Culturecom Holdings Ltd ($343) | | -24.2% | -7.7% | 16.4% | -20.3% |
| Sing Pao Media Enterprises Ltd ($8010) | 20.7% | 15.3% | 26.9% | 9.7% | |
| Focus Media Network Ltd ($8112) | 23.7% | -10.6% | 34.6% | 5.6% | |
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
| |
|---|
| Median (19 companies) | 10.6% | 4.5% | -1.8% | -3.9% | -9.0% |
|---|
| I-CABLE Communications Ltd ($1097) | | 0.8% | -9.2% | -13.8% | -9.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | |
| Next Media Ltd ($282) | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% |
| |
|---|
| Median (16 companies) | 43.6% | 37.5% | 38.5% | 36.1% | 38.5% |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | 94.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | |
| Television Broadcasts Ltd ($511) | 45.2% | 43.2% | 42.3% | 37.3% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| |
|---|
| Median (19 companies) | 15.1% | 12.9% | 11.5% | 9.8% | 12.9% |
|---|
| I-CABLE Communications Ltd ($1097) | 7.9% | 2.2% | 11.6% | 12.5% | 7.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | |
| Culturecom Holdings Ltd ($343) | 12.5% | 10.2% | 38.6% | 24.5% | 7.0% |
| Phoenix Satellite Television Holdings Ltd ($2008) | 14.6% | 12.0% | 8.5% | 11.4% | |
| V1 Group Ltd ($82) | 1.4% | 1.9% | 3.2% | 10.1% | |
| Focus Media Network Ltd ($8112) | 3.4% | 2.7% | 2.4% | 9.6% | |
| |
|---|
| Median (19 companies) | 4.0% | 2.7% | 5.2% | 2.3% | 2.1% |
|---|
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Television Broadcasts Ltd ($511) | 26.5% | 23.8% | 22.4% | 15.1% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 21.5% | 18.5% | 18.4% | 11.7% | |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | |
| |
|---|
| Median (19 companies) | 9.8% | 5.6% | 5.1% | 2.6% | 6.0% |
|---|
| I-CABLE Communications Ltd ($1097) | -12.7% | -25.1% | -10.3% | -15.3% | -27.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | |
| Next Media Ltd ($282) | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x |
| Hong Kong Economic Times Holdings Ltd ($423) | -0.8x | -1.3x | -4.6x | -0.7x | -0.1x |
| |
|---|
| Median (13 companies) | -1.3x | -1.4x | -1.5x | -1.5x | -0.1x |
|---|
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x |
