China Southern Airlines Co Ltd EBITDA jumped on 61.6% in 2015 and Revenue increased on 2.8%
30/03/2016 • About China Southern Airlines Co Ltd (
$1055) • By InTwits
China Southern Airlines Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Southern Airlines Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.9%. At the same time it's a lot of higher than industry average of 11.0%.
- CAPEX is quite volatile: 3,132 in 2015, 3,121 in 2014, 814 in 2013, 387 in 2012, 6,549 in 2011
- The company has business model with low profitability: ROIC is at 8.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.8x while industry average is 3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Southern Airlines Co Ltd ($1055) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 90,395 | 99,514 | 98,547 | 108,584 | 111,652 | 2.8% |
| SG&A | 9,375 | 9,559 | 10,224 | 10,178 | 9,440 | -7.3% |
| EBITDA | 12,115 | 13,437 | 10,906 | 15,706 | 25,382 | 61.6% |
| Net Income | 5,110 | 2,619 | 1,986 | 1,777 | 3,736 | 110.2% |
Balance Sheet
|
|---|
| Cash | 9,863 | 10,082 | 11,748 | 15,414 | 4,560 | -70.4% |
| Short Term Debt | 20,573 | 24,393 | 23,878 | 26,971 | 36,418 | 35.0% |
| Long Term Debt | 43,090 | 49,567 | 68,619 | 85,985 | 65,292 | -24.1% |
Cash flow
|
|---|
| Capex | 20,038 | 15,733 | 12,308 | 8,649 | 12,139 | 40.4% |
Ratios
|
|---|
| Revenue growth | 18.2% | 10.1% | -1.0% | 10.2% | 2.8% | |
| EBITDA growth | -9.7% | 10.9% | -18.8% | 44.0% | 61.6% | |
| EBITDA Margin | 13.4% | 13.5% | 11.1% | 14.5% | 22.7% | 8.3% |
| Net Income Margin | 5.7% | 2.6% | 2.0% | 1.6% | 3.3% | 1.7% |
| SG&A, % of revenue | 10.4% | 9.6% | 10.4% | 9.4% | 8.5% | -0.9% |
| CAPEX, % of revenue | 22.2% | 15.8% | 12.5% | 8.0% | 10.9% | 2.9% |
| ROIC | 4.6% | 4.7% | 1.2% | 3.2% | 8.7% | 5.5% |
| ROE | 17.3% | 8.1% | 5.9% | 5.1% | 10.0% | 4.9% |
| Net Debt/EBITDA | 4.4x | 4.8x | 7.4x | 6.2x | 3.8x | -2.4x |
Revenue and profitability
China Southern Airlines Co Ltd's Revenue increased on 2.8% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.3 pp from 14.5% to 22.7% in 2015.
SG&A as a % of Revenue decreased slightly on 0.92 pp from 9.4% to 8.5% in 2015.
Net Income marign increased slightly on 1.7 pp from 1.6% to 3.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
China Southern Airlines Co Ltd's CAPEX/Revenue was 10.9% in 2015. China Southern Airlines Co Ltd showed decline in CAPEX/Revenue of 4.9 pp from 15.8% in 2012 to 10.9% in 2015. Average CAPEX/Revenue for the last three years was 10.4%.
Return on investment
The company operates at low ROIC (8.71%) and ROE (9.99%). ROIC increased on 5.5 pp from 3.2% to 8.7% in 2015. ROE increased on 4.9 pp from 5.1% to 10.0% in 2015.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 4.0x Debt / EBITDA. Net Debt / EBITDA dropped on 2.4x from 6.2x to 3.8x in 2015. Debt decreased on 10.0% in 2015 while cash dropped on 70.4% in 2015.
Appendix 1: Peers in Airlines
Below you can find China Southern Airlines Co Ltd benchmarking vs. other companies in Airlines 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Eastern Airlines Corp Ltd ($670) | | 3.5% | 3.5% | 2.2% | 4.2% |
| Cathay Pacific Airways Ltd ($293) | | 1.0% | 1.1% | 5.5% | -3.4% |
| |
|---|
| Median (2 companies) | | 2.2% | 2.3% | 3.8% | 0.4% |
|---|
| China Southern Airlines Co Ltd ($1055) | | 10.1% | -1.0% | 10.2% | 2.8% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Eastern Airlines Corp Ltd ($670) | 13.5% | 14.0% | 11.1% | 16.9% | 25.0% |
| Cathay Pacific Airways Ltd ($293) | 11.4% | 8.2% | 11.2% | 12.3% | 15.0% |
| |
|---|
| Median (2 companies) | 12.4% | 11.1% | 11.2% | 14.6% | 20.0% |
|---|
| China Southern Airlines Co Ltd ($1055) | 13.4% | 13.5% | 11.1% | 14.5% | 22.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cathay Pacific Airways Ltd ($293) | 17.9% | 21.1% | 20.4% | 14.0% | 12.9% |
| China Eastern Airlines Corp Ltd ($670) | 6.5% | 7.2% | 2.1% | 6.5% | 9.2% |
| |
|---|
| Median (2 companies) | 12.2% | 14.2% | 11.2% | 10.2% | 11.1% |
|---|
| China Southern Airlines Co Ltd ($1055) | 22.2% | 15.8% | 12.5% | 8.0% | 10.9% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Eastern Airlines Corp Ltd ($670) | 5.3% | 5.0% | 1.6% | 5.2% | 8.7% |
| Cathay Pacific Airways Ltd ($293) | 4.8% | 1.2% | 2.9% | 3.5% | 5.3% |
| |
|---|
| Median (2 companies) | 5.0% | 3.1% | 2.3% | 4.4% | 7.0% |
|---|
| China Southern Airlines Co Ltd ($1055) | 4.6% | 4.7% | 1.2% | 3.2% | 8.7% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Eastern Airlines Corp Ltd ($670) | 5.2x | 5.5x | 7.3x | 6.3x | 4.7x |
| Cathay Pacific Airways Ltd ($293) | 2.1x | 4.4x | 4.1x | 3.5x | 3.3x |
| |
|---|
| Median (2 companies) | 3.7x | 4.9x | 5.7x | 4.9x | 4.0x |
|---|
| China Southern Airlines Co Ltd ($1055) | 4.4x | 4.8x | 7.4x | 6.2x | 3.8x |
