COSCO International Holdings Ltd reports 20.9% revenue decline in 2015 and 0.70 pp EBITDA Margin growth from 3.5% to 4.2%
22/03/2016 • About COSCO International Holdings Ltd (
$517) • By InTwits
COSCO International Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- COSCO International Holdings Ltd is a company in decline: 2015 revenue growth was -20.9%, 5 years revenue CAGR was -7.1%
- EBITDA Margin is relatively stable: 4.2% in 2015 vs. 3.5% in 2014 vs. 3.5% in 2011
- COSCO International Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: 174 in 2015, 142 in 2014, 39.9 in 2013, 13.1 in 2012, 14.8 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
COSCO International Holdings Ltd ($517) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,656 | 10,006 | 9,308 | 7,588 | 6,000 | -20.9% |
| Gross Profit | 892 | 686 | 694 | 804 | 691 | -14.1% |
| SG&A | 531 | 439 | 497 | 569 | 533 | -6.4% |
| EBITDA | 371 | 312 | 214 | 267 | 253 | -5.3% |
| Net Income | 390 | 363 | 242 | 359 | 336 | -6.5% |
Balance Sheet
|
|---|
| Cash | 5,667 | 5,764 | 6,227 | 6,094 | 6,224 | 2.1% |
| Short Term Debt | 193 | 314 | 255 | 174 | 36 | -79.3% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 15 | 13 | 40 | 142 | 174 | 22.4% |
Ratios
|
|---|
| Revenue growth | 23.0% | -6.1% | -7.0% | -18.5% | -20.9% | |
| EBITDA growth | 29.4% | -15.9% | -31.4% | 24.7% | -5.3% | |
| Gross Margin | 8.4% | 6.9% | 7.5% | 10.6% | 11.5% | 0.9% |
| EBITDA Margin | 3.5% | 3.1% | 2.3% | 3.5% | 4.2% | 0.7% |
| Net Income Margin | 3.7% | 3.6% | 2.6% | 4.7% | 5.6% | 0.9% |
| SG&A, % of revenue | 5.0% | 4.4% | 5.3% | 7.5% | 8.9% | 1.4% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.4% | 1.9% | 2.9% | 1.0% |
| ROIC | 4.5% | 3.8% | 2.4% | 2.9% | 2.8% | -0.1% |
| ROE | 5.4% | 5.0% | 3.3% | 4.7% | 4.3% | -0.4% |
| Net Debt/EBITDA | -14.7x | -17.4x | -27.9x | -22.2x | -24.4x | -2.3x |
Revenue and profitability
COSCO International Holdings Ltd's Revenue dropped on 20.9% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.70 pp from 3.5% to 4.2% in 2015.
Gross Margin increased slightly on 0.91 pp from 10.6% to 11.5% in 2015. SG&A as a % of Revenue increased slightly on 1.4 pp from 7.5% to 8.9% in 2015.
Net Income marign increased slightly on 0.87 pp from 4.7% to 5.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 COSCO International Holdings Ltd had CAPEX/Revenue of 2.9%. CAPEX/Revenue increased on 2.8 pp from 0.13% in 2012 to 2.9% in 2015. For the last three years the average CAPEX/Revenue was 1.7%.The company invested a big chunk of EBITDA (68.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (2.84%) and ROE (4.34%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -24.4x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 2.3x from -22.2x to -24.4x in 2015. Debt dropped on 79.3% in 2015 while cash increased on 2.1% in 2015.
Appendix 1: Peers in Oil&Gas
Below we provide COSCO International Holdings Ltd benchmarking against other companies in Oil&Gas 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 |
|---|
| China CBM Group Co Ltd ($8270) | 9.9% | -27.6% | 1.8% | 60.9% | |
| Brightoil Petroleum Holdings Ltd ($933) | | 76.9% | -20.8% | 52.5% | -12.3% |
| United Energy Group Ltd ($467) | | 266.5% | 49.0% | 27.8% | -11.5% |
| Yanchang Petroleum International Ltd ($346) | -1.8% | 641.9% | 155.6% | 15.5% | |
| Kunlun Energy Co Ltd ($135) | | 27.2% | 31.8% | 10.6% | -13.3% |
| |
|---|
| Median (17 companies) | 30.1% | 15.7% | 8.7% | -1.8% | -12.3% |
|---|
| COSCO International Holdings Ltd ($517) | | -6.1% | -7.0% | -18.5% | -20.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| EPI Holdings Ltd ($689) | 0.3% | 58.0% | 50.7% | 54.6% | |
| United Energy Group Ltd ($467) | 15.4% | 39.4% | 48.0% | 53.8% | 51.5% |
| Enviro Energy International Holdings Ltd ($1102) | 25.0% | 49.3% | 76.9% | 38.6% | 3.4% |
| South Sea Petroleum Holdings Ltd ($76) | 48.2% | 27.3% | 25.3% | 38.5% | |
| Zhongyu Gas Holdings Ltd ($3633) | 23.9% | 23.6% | 23.8% | 24.9% | |
| |
|---|
| Median (11 companies) | 6.2% | 10.7% | 4.1% | 8.7% | 3.0% |
|---|
| COSCO International Holdings Ltd ($517) | 8.4% | 6.9% | 7.5% | 10.6% | 11.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| United Energy Group Ltd ($467) | 100.6% | 71.2% | 65.3% | 69.8% | -31.9% |
| MIE Holdings Corp ($1555) | 58.1% | 57.0% | 54.5% | 57.1% | |
| CNOOC Ltd ($883) | 50.3% | 48.5% | 47.2% | 50.7% | |
| Sino Oil And Gas Holdings Ltd ($702) | -273.6% | -170.8% | -132.3% | 49.6% | |
| Kunlun Energy Co Ltd ($135) | 46.8% | 47.0% | 39.5% | 34.9% | 30.9% |
| |
|---|
| Median (17 companies) | 5.6% | 5.2% | 3.2% | 6.9% | -10.9% |
|---|
| COSCO International Holdings Ltd ($517) | 3.5% | 3.1% | 2.3% | 3.5% | 4.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Enviro Energy International Holdings Ltd ($1102) | 1,208.5% | 301.4% | 46.5% | 111.0% | 7.9% |
| MIE Holdings Corp ($1555) | 43.9% | 52.2% | 43.3% | 44.1% | |
| United Energy Group Ltd ($467) | 60.0% | 37.2% | 62.7% | 42.4% | 49.1% |
| CNOOC Ltd ($883) | 21.9% | 25.4% | 30.3% | 34.8% | |
| China CBM Group Co Ltd ($8270) | 52.3% | 58.1% | 81.7% | 22.5% | |
| |
|---|
| Median (17 companies) | 27.7% | 15.0% | 10.7% | 11.0% | 7.9% |
|---|
| COSCO International Holdings Ltd ($517) | 0.1% | 0.1% | 0.4% | 1.9% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CNOOC Ltd ($883) | 32.4% | 25.7% | 18.1% | 15.8% | |
| United Energy Group Ltd ($467) | 3.6% | 7.4% | 10.3% | 15.7% | -25.0% |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 5.4% | 7.3% | 12.6% | 13.0% | |
| Zhongyu Gas Holdings Ltd ($3633) | 10.6% | 17.4% | 15.0% | 12.3% | |
| Kunlun Energy Co Ltd ($135) | 12.3% | 13.0% | 12.6% | 11.0% | 7.7% |
| |
|---|
| Median (19 companies) | 3.6% | 4.2% | 5.5% | 3.3% | -11.7% |
|---|
| COSCO International Holdings Ltd ($517) | 4.5% | 3.8% | 2.4% | 2.9% | 2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Titan Petrochemicals Group Ltd ($1192) | | | | 95.2x | |
| Sino Oil And Gas Holdings Ltd ($702) | | | | 55.5x | |
| Zhongyu Gas Holdings Ltd ($3633) | 2.0x | 1.6x | 2.3x | 3.7x | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 8.3x | 6.0x | 4.3x | 3.6x | |
| China CBM Group Co Ltd ($8270) | 1.3x | 3.2x | | 3.3x | |
| |
|---|
| Median (12 companies) | 1.3x | 1.6x | 1.2x | 2.7x | 1.9x |
|---|
| COSCO International Holdings Ltd ($517) | -14.7x | -17.4x | -27.9x | -22.2x | -24.4x |
