China Petroleum & Chemical Corp revenue decline accelerated from 1.8% in 2014 to 35.9% in 2015
29/03/2016 • About China Petroleum & Chemical Corp (
$386) • By InTwits
China Petroleum & Chemical Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Petroleum & Chemical Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 45.6%.
- CAPEX is quite volatile: 8.4 in 2015, 2.8 in 2014, 11.8 in 2013, 97.4 in 2012, 283 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Petroleum & Chemical Corp ($386) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,463,767 | 2,733,618 | 2,833,247 | 2,781,641 | 1,784,026 | -35.9% |
| SG&A | 58,909 | 61,130 | 69,892 | 68,330 | 62,545 | -8.5% |
| EBITDA | 169,346 | 169,118 | 178,050 | 163,584 | 153,396 | -6.2% |
| Net Income | 73,225 | 63,879 | 66,132 | 46,466 | 32,281 | -30.5% |
Balance Sheet
|
|---|
| Cash | 25,197 | 10,864 | 15,101 | 10,100 | 43,553 | 331.2% |
| Short Term Debt | 80,373 | 115,982 | 163,870 | 178,148 | 119,572 | -32.9% |
| Long Term Debt | 154,457 | 162,116 | 145,590 | 150,932 | 139,746 | -7.4% |
Cash flow
|
|---|
| Capex | 142,254 | 157,066 | 154,946 | 124,381 | 102,657 | -17.5% |
Ratios
|
|---|
| Revenue growth | 31.3% | 11.0% | 3.6% | -1.8% | -35.9% | |
| EBITDA growth | 3.1% | -0.1% | 5.3% | -8.1% | -6.2% | |
| EBITDA Margin | 6.9% | 6.2% | 6.3% | 5.9% | 8.6% | 2.7% |
| Net Income Margin | 3.0% | 2.3% | 2.3% | 1.7% | 1.8% | 0.1% |
| SG&A, % of revenue | 2.4% | 2.2% | 2.5% | 2.5% | 3.5% | 1.0% |
| CAPEX, % of revenue | 5.8% | 5.7% | 5.5% | 4.5% | 5.8% | 1.3% |
| ROIC | 14.2% | 11.9% | 10.6% | 7.5% | 5.5% | -2.0% |
| ROE | 16.4% | 13.0% | 12.2% | 8.0% | 5.1% | -2.9% |
| Net Debt/EBITDA | 1.2x | 1.6x | 1.7x | 1.9x | 1.4x | -0.5x |
Revenue and profitability
The company's Revenue dropped on 35.9% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.7 pp from 5.9% to 8.6% in 2015.
SG&A as a % of Revenue increased slightly on 1.0 pp from 2.5% to 3.5% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Petroleum & Chemical Corp had CAPEX/Revenue of 5.8%. China Petroleum & Chemical Corp's CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 5.2%.China Petroleum & Chemical Corp invested a big chunk of EBITDA (66.9%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.49%) and ROE (5.12%). ROIC decreased slightly on 2.0 pp from 7.5% to 5.5% in 2015. ROE decreased on 2.9 pp from 8.0% to 5.1% in 2015.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 1.9x to 1.4x in 2015. Debt dropped on 21.2% in 2015 while cash jumped on 331% in 2015.
Appendix 1: Peers in Oil&Gas
Below you can find China Petroleum & Chemical Corp 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) | | -27.6% | 1.8% | 60.9% | 9.3% |
| 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) | 20.0% | 15.0% | 8.7% | -3.9% | -15.7% |
|---|
| China Petroleum & Chemical Corp ($386) | | 11.0% | 3.6% | -1.8% | -35.9% |
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 (12 companies) | 6.3% | 8.8% | 5.4% | 9.7% | 4.4% |
|---|
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% |
| CNOOC Ltd ($883) | 50.3% | 48.5% | 47.2% | 50.7% | 53.0% |
| 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) | 4.0% | 3.7% | 1.4% | 6.9% | 4.4% |
|---|
| China Petroleum & Chemical Corp ($386) | 6.9% | 6.2% | 6.3% | 5.9% | 8.6% |
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% |
| CNOOC Ltd ($883) | 21.9% | 25.4% | 30.3% | 34.8% | 39.5% |
| China CBM Group Co Ltd ($8270) | 52.3% | 58.1% | 81.7% | 22.5% | 9.7% |
| |
|---|
| Median (17 companies) | 27.7% | 15.0% | 10.7% | 11.0% | 11.2% |
|---|
| China Petroleum & Chemical Corp ($386) | 5.8% | 5.7% | 5.5% | 4.5% | 5.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CNOOC Ltd ($883) | 32.4% | 25.7% | 18.1% | 15.8% | 3.2% |
| 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% | 3.8% | 1.6% | 1.5% | -1.4% |
|---|
| China Petroleum & Chemical Corp ($386) | 14.2% | 11.9% | 10.6% | 7.5% | 5.5% |
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 | 2.1x |
| |
|---|
| Median (12 companies) | 1.2x | 1.5x | 1.0x | 2.7x | 1.7x |
|---|
| China Petroleum & Chemical Corp ($386) | 1.2x | 1.6x | 1.7x | 1.9x | 1.4x |
