CNOOC Ltd reports 66.4% Net Income decline while 2.3 pp EBITDA Margin growth from 50.7% to 53.0%
24/03/2016 • About CNOOC Ltd (
$883) • 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%. At the same time it's a lot of higher than industry average of 14.3%.
- CAPEX is quite volatile: 3,357 in 2015, 2,760 in 2014, 2,902 in 2013, 5,334 in 2012, 9,510 in 2011
- 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 ($883) 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. The company's CAPEX/Revenue surged on 14.1 pp from 25.4% in 2012 to 39.5% in 2015. For the last three years the average CAPEX/Revenue was 34.9%.Battling declining revenue the company 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 jumped on 0.8x from 0.9x to 1.7x in 2015. Debt jumped on 20.6% in 2015 while cash dropped on 20.5% in 2015.
Management team
CNOOC Ltd's CEO Yang Hua has spent 8 years at the company. The company's CFO is Zhong Hua. Zhong Hua has 8 years tenure at the company.
Appendix 1: Peers in Oil&Gas
Below you can find CNOOC Ltd benchmarking vs. other companies in Oil&Gas 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 |
|---|
| 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) | 15.0% | 15.7% | 3.7% | -1.8% | -15.7% |
|---|
| CNOOC Ltd ($883) | | 2.8% | 15.4% | -3.9% | -37.6% |
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 (12 companies) | 6.3% | 8.8% | 5.4% | 9.7% | 3.4% |
|---|
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% | -74.8% |
| 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% |
| Zhongyu Gas Holdings Ltd ($3633) | 15.3% | 18.6% | 18.9% | 21.0% | |
| |
|---|
| Median (17 companies) | 4.0% | 3.7% | 1.4% | 5.9% | -3.3% |
|---|
| CNOOC Ltd ($883) | 50.3% | 48.5% | 47.2% | 50.7% | 53.0% |
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% | 62.4% |
| United Energy Group Ltd ($467) | 60.0% | 37.2% | 62.7% | 42.4% | 49.1% |
| China CBM Group Co Ltd ($8270) | 52.3% | 58.1% | 81.7% | 22.5% | |
| Kunlun Energy Co Ltd ($135) | 52.1% | 46.7% | 35.5% | 19.9% | 14.2% |
| |
|---|
| Median (17 companies) | 23.5% | 12.5% | 6.7% | 4.5% | 10.2% |
|---|
| CNOOC Ltd ($883) | 21.9% | 25.4% | 30.3% | 34.8% | 39.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| MIE Holdings Corp ($1555) | 24.4% | 17.5% | 11.8% | 9.7% | -17.5% |
| |
|---|
| Median (19 companies) | 3.6% | 3.8% | 1.6% | 1.5% | -4.4% |
|---|
| CNOOC Ltd ($883) | 32.4% | 25.7% | 18.1% | 15.8% | 3.2% |
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 | 1.3x |
|---|
| CNOOC Ltd ($883) | 0.1x | 0.0x | 0.9x | 0.9x | 1.7x |
