Maanshan Iron & Steel Co Ltd reports 119% EBITDA decline and 10.1 pp EBITDA Margin decline from 8.1% to -2.0%
30/03/2016 • About Maanshan Iron & Steel Co Ltd (
$323) • By InTwits
Maanshan Iron & Steel Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Maanshan Iron & Steel Co Ltd is a company in decline: 2015 revenue growth was -24.6%, 5 years revenue CAGR was -6.6%
- EBITDA Margin is quite volatile: -2.0% in 2015, 8.1% in 2014, 5.7% in 2013, 0.7% in 2012, 6.2% in 2011
- Maanshan Iron & Steel Co Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 262 in 2015, 470 in 2014, 413 in 2013, 1,345 in 2012, 360 in 2011
- The company has unprofitable business model: ROIC is at -8.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Maanshan Iron & Steel Co Ltd ($323) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 86,626 | 74,244 | 73,622 | 59,586 | 44,908 | -24.6% |
| Gross Profit | 3,261 | 1,404 | 3,228 | 3,745 | -581 | -115.5% |
| SG&A | 1,537 | 1,671 | 1,703 | 1,701 | 2,062 | 21.2% |
| EBITDA | 5,389 | 522 | 4,166 | 4,809 | -908 | -118.9% |
| Net Income | 82 | -3,863 | 157 | 221 | -4,804 | -2,277.7% |
Balance Sheet
|
|---|
| Cash | 9,190 | 6,630 | 1,815 | 3,579 | 3,944 | 10.2% |
| Short Term Debt | 14,413 | 17,269 | 23,783 | 20,293 | 19,122 | -5.8% |
| Long Term Debt | 21,750 | 18,176 | 8,388 | 8,672 | 10,635 | 22.6% |
Cash flow
|
|---|
| Capex | 4,214 | 4,947 | 5,521 | 2,599 | 2,773 | 6.7% |
Ratios
|
|---|
| Revenue growth | 37.4% | -14.3% | -0.8% | -19.1% | -24.6% | |
| EBITDA growth | -23.6% | -90.3% | 697.8% | 15.4% | -118.9% | |
| Gross Margin | 3.8% | 1.9% | 4.4% | 6.3% | -1.3% | -7.6% |
| EBITDA Margin | 6.2% | 0.7% | 5.7% | 8.1% | -2.0% | -10.1% |
| Net Income Margin | 0.1% | -5.2% | 0.2% | 0.4% | -10.7% | -11.1% |
| SG&A, % of revenue | 1.8% | 2.3% | 2.3% | 2.9% | 4.6% | 1.7% |
| CAPEX, % of revenue | 4.9% | 6.7% | 7.5% | 4.4% | 6.2% | 1.8% |
| ROIC | 1.8% | -4.9% | 0.5% | 2.1% | -8.3% | -10.4% |
| ROE | 0.3% | -15.3% | 0.7% | 1.0% | -23.0% | -24.0% |
| Net Debt/EBITDA | 5.0x | 55.2x | 7.3x | 5.3x | | -5.3x |
Revenue and profitability
Maanshan Iron & Steel Co Ltd's Revenue dropped on 24.6% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 10.1 pp from 8.1% to -2.0% in 2015.
Gross Margin decreased on 7.6 pp from 6.3% to -1.3% in 2015. SG&A as a % of Revenue increased slightly on 1.7 pp from 2.9% to 4.6% in 2015.
Net Income marign dropped on 11.1 pp from 0.37% to -10.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
Maanshan Iron & Steel Co Ltd's CAPEX/Revenue was 6.2% in 2015. Maanshan Iron & Steel Co Ltd showed almost no change in CAPEX/Revenue from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 6.0%.
Return on investment
The company operates at negative ROIC (-8.34%) and ROE (-23.01%). ROIC dropped on 10.4 pp from 2.1% to -8.3% in 2015. ROE dropped on 24.0 pp from 0.95% to -23.0% in 2015.
Leverage (Debt)
Debt level is -2.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 5.3x from 5.3x to in 2015. Debt increased on 2.7% in 2015 while cash surged on 10.2% in 2015.
Appendix 1: Peers in Iron/Steel
Below we provide Maanshan Iron & Steel Co Ltd benchmarking against other companies in Iron/Steel 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 |
|---|
| CAA Resources Ltd ($2112) | | 99.6% | 103.2% | 38.0% | 261.2% |
| Newton Resources Ltd ($1231) | | | | -41.6% | 170.9% |
| Fosun International Ltd ($656) | | -8.9% | -1.4% | 21.0% | 27.6% |
| Wanguo International Mining Group Ltd ($3939) | | -1.0% | -11.0% | -16.2% | 0.7% |
| Da Ming International Holdings Ltd ($1090) | | -2.1% | 29.3% | 29.8% | -8.1% |
| |
|---|
| Median (16 companies) | 41.1% | -7.7% | 0.3% | -1.7% | -13.5% |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | | -14.3% | -0.8% | -19.1% | -24.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 63.3% | | -223.7% | 15.7% | 37.5% |
| Wanguo International Mining Group Ltd ($3939) | 51.1% | 47.4% | 50.7% | 39.6% | 29.2% |
| China Metal International Holdings Inc ($319) | 21.0% | 20.9% | 24.3% | 24.8% | 25.5% |
| China Hanking Holdings Ltd ($3788) | 66.1% | 53.6% | 54.4% | 35.1% | 23.8% |
| Fosun International Ltd ($656) | 18.6% | 18.0% | 20.3% | 23.7% | 22.4% |
| |
|---|
| Median (16 companies) | 21.0% | 17.8% | 20.3% | 12.9% | 16.3% |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | 3.8% | 1.9% | 4.4% | 6.3% | -1.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanguo International Mining Group Ltd ($3939) | 46.5% | 39.7% | 36.2% | 31.3% | 26.7% |
| Fosun International Ltd ($656) | 15.8% | 16.7% | 23.0% | 20.9% | 22.2% |
| China Metal International Holdings Inc ($319) | 17.8% | 19.7% | 21.3% | 21.0% | 22.0% |
| Xingda International Holdings Ltd ($1899) | 21.6% | 17.3% | 22.2% | 19.1% | 13.6% |
| Tiangong International Co Ltd ($826) | 22.5% | 25.1% | 25.8% | 19.3% | 11.6% |
| |
|---|
| Median (16 companies) | 15.7% | 16.4% | 21.3% | 7.1% | 2.0% |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | 6.2% | 0.7% | 5.7% | 8.1% | -2.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newton Resources Ltd ($1231) | 690.4% | | 926.9% | 1,395.7% | 197.0% |
| Vale SA ($6210) | 25.8% | 34.0% | 28.1% | 29.8% | 34.5% |
| China Hanking Holdings Ltd ($3788) | 24.5% | 38.0% | 35.7% | 20.2% | 30.5% |
| Pan Asia Mining Ltd ($8173) | 0.4% | 1.5% | 0.4% | 2.4% | 24.4% |
| China Vanadium Titano - Magnetite Mining Co Ltd ($893) | 14.2% | 8.9% | 10.5% | 20.4% | 24.1% |
| |
|---|
| Median (16 companies) | 10.8% | 9.0% | 10.9% | 8.1% | 9.4% |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | 4.9% | 6.7% | 7.5% | 4.4% | 6.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Metal International Holdings Inc ($319) | 11.5% | 11.0% | 12.0% | 12.7% | 11.4% |
| Wanguo International Mining Group Ltd ($3939) | 74.9% | 38.4% | 24.4% | 15.0% | 11.1% |
| Golik Holdings Ltd ($1118) | 9.0% | 7.0% | 7.4% | 10.0% | 10.8% |
| CAA Resources Ltd ($2112) | 33.0% | 69.2% | 33.5% | 2.2% | 6.9% |
| Fosun International Ltd ($656) | 6.7% | 6.1% | 7.9% | 6.8% | 6.9% |
| |
|---|
| Median (16 companies) | 11.5% | 6.7% | 7.9% | 5.0% | -3.4% |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | 1.8% | -4.9% | 0.5% | 2.1% | -8.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Fosun International Ltd ($656) | 4.6x | 4.4x | 4.8x | 5.5x | 4.4x |
| China Hanking Holdings Ltd ($3788) | 0.3x | 0.4x | 2.5x | 4.7x | 27.3x |
| China Oriental Group Co Ltd ($581) | 2.4x | 4.6x | 5.3x | 4.5x | |
| Angang Steel Co Ltd ($347) | 6.6x | 21.4x | 4.0x | 4.3x | 29.1x |
| Da Ming International Holdings Ltd ($1090) | 8.0x | 8.4x | 8.5x | 4.0x | |
| |
|---|
| Median (13 companies) | 1.3x | 2.1x | 2.5x | 2.9x | 0.8x |
|---|
| Maanshan Iron & Steel Co Ltd ($323) | 5.0x | 55.2x | 7.3x | 5.3x | |
