TSC Group Holdings Ltd reports 89.8% Net Income decline and 6.7 pp EBITDA Margin decline from 13.2% to 6.5%
30/03/2016 • About TSC Group Holdings Ltd (
$206) • By InTwits
TSC Group Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TSC Group Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.6%
- TSC Group Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's a lot of higher than industry average of 4.6%.
- CAPEX is quite volatile: 16.0 in 2015, 15.9 in 2014, 9.7 in 2013, 8.0 in 2012, 7.8 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TSC Group Holdings Ltd ($206) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 139.5 | 183.7 | 201.9 | 270.6 | 194.9 | -28.0% |
| Gross Profit | 53.1 | 56.4 | 63.8 | 75.2 | 54.4 | -27.8% |
| SG&A | 35.6 | 33.0 | 33.0 | 33.3 | 33.1 | -0.6% |
| EBITDA | 16.4 | 20.9 | 28.2 | 35.7 | 12.6 | -64.6% |
| Net Income | 3.5 | 7.5 | 14.6 | 20.5 | 2.1 | -89.8% |
Balance Sheet
|
|---|
| Cash | 34.1 | 31.0 | 37.9 | 52.3 | 46.5 | -11.1% |
| Short Term Debt | 20.5 | 28.4 | 29.8 | 27.3 | 28.7 | 5.2% |
| Long Term Debt | 4.9 | 3.7 | 7.1 | 37.9 | 38.2 | 0.8% |
Cash flow
|
|---|
| Capex | 7.8 | 8.0 | 9.7 | 15.9 | 16.0 | 0.3% |
Ratios
|
|---|
| Revenue growth | -2.8% | 31.7% | 9.9% | 34.0% | -28.0% | |
| EBITDA growth | -20.9% | 27.9% | 34.5% | 26.6% | -64.6% | |
| Gross Margin | 38.0% | 30.7% | 31.6% | 27.8% | 27.9% | 0.1% |
| EBITDA Margin | 11.7% | 11.4% | 14.0% | 13.2% | 6.5% | -6.7% |
| Net Income Margin | 2.5% | 4.1% | 7.2% | 7.6% | 1.1% | -6.5% |
| SG&A, % of revenue | 25.5% | 18.0% | 16.3% | 12.3% | 17.0% | 4.7% |
| CAPEX, % of revenue | 5.6% | 4.3% | 4.8% | 5.9% | 8.2% | 2.3% |
| ROIC | 5.2% | 6.7% | 9.1% | 10.5% | 1.6% | -8.9% |
| ROE | 2.1% | 4.3% | 7.8% | 9.8% | 1.0% | -8.8% |
| Net Debt/EBITDA | -0.5x | 0.1x | -0.0x | 0.4x | 1.6x | 1.3x |
Revenue and profitability
TSC Group Holdings Ltd's Revenue dropped on 28.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.7 pp from 13.2% to 6.5% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased on 4.7 pp from 12.3% to 17.0% in 2015.
Net Income marign decreased on 6.5 pp from 7.6% to 1.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
TSC Group Holdings Ltd's CAPEX/Revenue was 8.2% in 2015. The company showed CAPEX/Revenue growth of 3.9 pp from 4.3% in 2012 to 8.2% in 2015. For the last three years the average CAPEX/Revenue was 6.3%.The company has spent a lot to CAPEX (127% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (1.60%) and ROE (0.96%). ROIC decreased on 8.9 pp from 10.5% to 1.6% in 2015. ROE decreased on 8.8 pp from 9.8% to 0.96% in 2015.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA jumped on 1.3x from 0.4x to 1.6x in 2015. Debt increased on 2.6% in 2015 while cash dropped on 11.1% in 2015.
Appendix 1: Peers in Oil&Gas Services
Below we provide TSC Group Holdings Ltd benchmarking against other companies in Oil&Gas Services 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 |
|---|
| Hans Energy Co Ltd ($554) | | 40.8% | 8.0% | -4.0% | 5.5% |
| Hilong Holding Ltd ($1623) | | 23.5% | 8.3% | 5.0% | -3.6% |
| Sinopec Engineering Group Co Ltd ($2386) | | 25.9% | 13.1% | 13.3% | -7.8% |
| Petro-King Oilfield Services Ltd ($2178) | | 543.3% | 0.3% | -33.5% | -10.5% |
| Anton Oilfield Services Group/Hong Kong ($3337) | | 59.2% | 26.4% | -18.2% | -11.5% |
| |
|---|
| Median (10 companies) | 28.8% | 24.7% | 10.7% | 0.5% | -19.2% |
|---|
| TSC Group Holdings Ltd ($206) | | 31.7% | 9.9% | 34.0% | -28.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 1.6% | 1.1% | 0.7% | 4.4% | 41.1% |
| Hilong Holding Ltd ($1623) | 41.0% | 39.5% | 40.3% | 39.6% | 32.6% |
| Anton Oilfield Services Group/Hong Kong ($3337) | 41.5% | 45.0% | 44.3% | 31.2% | 31.8% |
| CIMC Enric Holdings Ltd ($3899) | 18.7% | 19.5% | 20.4% | 18.8% | 18.6% |
| Sinopec Engineering Group Co Ltd ($2386) | 16.6% | 14.3% | 14.7% | 12.7% | 13.5% |
| |
|---|
| Median (7 companies) | 18.7% | 14.3% | 14.7% | 12.7% | 18.6% |
|---|
| TSC Group Holdings Ltd ($206) | 38.0% | 30.7% | 31.6% | 27.8% | 27.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sinopec Kantons Holdings Ltd ($934) | 2.1% | 1.5% | 0.9% | 6.6% | 63.8% |
| Hans Energy Co Ltd ($554) | -38.3% | 40.4% | 45.0% | 42.8% | 42.7% |
| China Oilfield Services Ltd ($2883) | 43.7% | 39.8% | 40.0% | 37.0% | 25.2% |
| Hilong Holding Ltd ($1623) | 28.5% | 25.9% | 27.8% | 28.8% | 22.7% |
| Anton Oilfield Services Group/Hong Kong ($3337) | 18.6% | 24.5% | 28.0% | 12.5% | 17.2% |
| |
|---|
| Median (10 companies) | 12.8% | 16.0% | 16.9% | 11.0% | 13.9% |
|---|
| TSC Group Holdings Ltd ($206) | 11.7% | 11.4% | 14.0% | 13.2% | 6.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Oilfield Services Ltd ($2883) | 24.9% | 16.5% | 30.9% | 29.8% | 25.3% |
| SPT Energy Group Inc ($1251) | 6.8% | 7.4% | 5.6% | 7.9% | 23.5% |
| Sinopec Kantons Holdings Ltd ($934) | 0.3% | 0.8% | 1.7% | 6.7% | 15.8% |
| Petro-King Oilfield Services Ltd ($2178) | 8.2% | 13.3% | 13.3% | 75.4% | 12.3% |
| Hilong Holding Ltd ($1623) | 17.1% | 16.7% | 18.9% | 48.1% | 9.6% |
| |
|---|
| Median (10 companies) | 6.8% | 10.0% | 6.3% | 7.3% | 9.6% |
|---|
| TSC Group Holdings Ltd ($206) | 5.6% | 4.3% | 4.8% | 5.9% | 8.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sinopec Engineering Group Co Ltd ($2386) | 59.6% | 77.5% | 33.3% | 18.6% | 15.3% |
| CIMC Enric Holdings Ltd ($3899) | 19.4% | 20.3% | 20.0% | 21.3% | 8.9% |
| Hilong Holding Ltd ($1623) | 19.0% | 15.5% | 14.8% | 12.0% | 6.0% |
| Sinopec Kantons Holdings Ltd ($934) | 8.3% | 3.5% | 0.4% | 6.0% | 5.0% |
| Yuan Heng Gas Holdings Ltd ($332) | | -59.8% | -0.0% | 25.6% | 3.9% |
| |
|---|
| Median (10 companies) | 8.6% | 11.8% | 12.2% | 7.9% | 3.0% |
|---|
| TSC Group Holdings Ltd ($206) | 5.2% | 6.7% | 9.1% | 10.5% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hans Energy Co Ltd ($554) | | 14.0x | 11.9x | 12.9x | 11.3x |
| Anton Oilfield Services Group/Hong Kong ($3337) | -0.5x | 0.0x | 0.9x | 7.4x | 6.4x |
| Yuan Heng Gas Holdings Ltd ($332) | | | | 2.7x | 8.9x |
| Hilong Holding Ltd ($1623) | 0.8x | 0.9x | 1.1x | 2.6x | 3.3x |
| Sinopec Kantons Holdings Ltd ($934) | -1.2x | -7.1x | -7.4x | 2.5x | 2.2x |
| |
|---|
| Median (11 companies) | 0.2x | 0.0x | -0.4x | 1.8x | 3.6x |
|---|
| TSC Group Holdings Ltd ($206) | -0.5x | 0.1x | -0.0x | 0.4x | 1.6x |
