Frontier Services Group Ltd revenue dropped on 30.6% in 2015 and EBITDA Margin dropped on 119 pp from -36.8% to -156%
31/03/2016 • About Frontier Services Group Ltd (
$500) • By InTwits
Frontier Services Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Frontier Services Group Ltd is a company in decline: 2015 revenue growth was -30.6%, 5 years revenue CAGR was -19.9%
- The company operates at negative EBITDA Margin: -156.2%
- Frontier Services Group Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -76.8% for the sames years0
- Frontier Services Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 30.9%. At the same time it's a lot of higher than industry average of 18.2%.
- CAPEX is quite volatile: 163 in 2015, 196 in 2014, 1.0 in 2013, 3.5 in 2012, 3.4 in 2011
- The company has unprofitable business model: ROIC is at -27.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Frontier Services Group Ltd ($500) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 61.9 | 55.2 | 27.7 | 310.4 | 215.3 | -30.6% |
| Gross Profit | 50.0 | 46.3 | 18.3 | 139.0 | -31.1 | -122.4% |
| SG&A | | | 76.8 | 207.5 | 216.7 | 4.5% |
| EBITDA | 72.1 | -26.0 | -110.8 | -114.2 | -336.3 | 194.3% |
| Net Income | -117.7 | -214.7 | -182.2 | -130.4 | -142.9 | 9.6% |
Balance Sheet
|
|---|
| Cash | 413.6 | 601.0 | 707.2 | 283.3 | 223.4 | -21.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 10.5 | 235.9 | 2,142.8% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 436.0 | 307.6 | -29.4% |
Cash flow
|
|---|
| Capex | 3.4 | 3.5 | 1.0 | 196.5 | 163.4 | -16.8% |
Ratios
|
|---|
| Revenue growth | -90.5% | -10.8% | -49.9% | 1,021.1% | -30.6% | |
| EBITDA growth | | -136.1% | 326.2% | 3.1% | 194.3% | |
| Gross Margin | 80.7% | 83.8% | 65.9% | 44.8% | -14.4% | -59.2% |
| EBITDA Margin | 116.4% | -47.1% | -400.3% | -36.8% | -156.2% | -119.4% |
| Net Income Margin | -190.2% | -388.7% | -658.0% | -42.0% | -66.4% | -24.4% |
| SG&A, % of revenue | | | 277.3% | 66.8% | 100.6% | 33.8% |
| CAPEX, % of revenue | 5.4% | 6.3% | 3.6% | 63.3% | 75.9% | 12.6% |
| ROIC | | -3.7% | -13.8% | -11.4% | -27.9% | -16.4% |
| ROE | -11.1% | -25.7% | -28.0% | -19.4% | -23.2% | -3.8% |
| Net Debt/EBITDA | -5.7x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 30.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from -9.1% to -7.5% in FY2015.
Gross Margin dropped on 59.2 pp from 44.8% to -14.4% in 2015. SG&A as a % of Revenue surged on 33.8 pp from 66.8% to 101% in 2015.
Net Income marign dropped on 24.4 pp from -42.0% to -66.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 75.9% in 2015. The company's CAPEX/Revenue jumped on 69.6 pp from 6.3% in 2012 to 75.9% in 2015. For the last three years the average CAPEX/Revenue was 47.6%.
Return on investment
The company operates at negative ROIC (-27.87%) and ROE (-23.23%). ROIC dropped on 16.4 pp from -11.4% to -27.9% in 2015. ROE decreased on 3.8 pp from -19.4% to -23.2% in 2015.
Leverage (Debt)
Debt level is -2.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt jumped on 21.7% in 2015 while cash dropped on 21.2% in 2015.
Appendix 1: Peers in Transportation
Below we provide Frontier Services Group Ltd benchmarking against other companies in Transportation 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 |
|---|
| Noble Century Investment Holdings Ltd ($2322) | | | | | 2,388.3% |
| China Best Group Holding Ltd ($370) | | 202.4% | -53.6% | 459.4% | 25.9% |
| Changan Minsheng APLL Logistics Co Ltd ($1292) | | 10.9% | 27.9% | 15.0% | 13.3% |
| Kwoon Chung Bus Holdings Ltd ($306) | | -8.6% | 7.9% | 5.5% | 7.9% |
| Guangshen Railway Co Ltd ($525) | | 2.7% | 4.7% | -6.9% | 6.9% |
| |
|---|
| Median (31 companies) | | 7.2% | 4.6% | 5.1% | -5.7% |
|---|
| Frontier Services Group Ltd ($500) | | -10.8% | -49.9% | 1,021.1% | -30.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CIG Yangtze Ports PLC ($8233) | 51.0% | 51.3% | 44.8% | 46.6% | 48.7% |
| Qinhuangdao Port Co Ltd ($3369) | 43.2% | 43.1% | 42.4% | 43.3% | 40.5% |
| Kwoon Chung Bus Holdings Ltd ($306) | 17.6% | 18.9% | 20.4% | 22.7% | 26.8% |
| Chu Kong Shipping Enterprise Group Co Ltd ($560) | 21.5% | 23.1% | 25.1% | 24.1% | 23.1% |
| Tianjin Port Development Holdings Ltd ($3382) | 21.7% | 22.5% | 18.4% | 13.6% | 22.7% |
| |
|---|
| Median (27 companies) | 17.0% | 13.0% | 10.9% | 10.3% | 12.6% |
|---|
| Frontier Services Group Ltd ($500) | 80.7% | 83.8% | 65.9% | 44.8% | -14.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| MTR Corp Ltd ($66) | 49.1% | 42.7% | 37.6% | 45.2% | 41.6% |
| Qinhuangdao Port Co Ltd ($3369) | 45.3% | 46.0% | 44.6% | 46.5% | 41.1% |
| CIG Yangtze Ports PLC ($8233) | 29.9% | 30.2% | 27.6% | 38.5% | 39.5% |
| China Shipping Development Co Ltd ($1138) | 24.7% | 12.5% | 3.0% | 24.7% | 26.7% |
| Kwoon Chung Bus Holdings Ltd ($306) | 15.4% | 13.3% | 16.1% | 20.7% | 26.1% |
| |
|---|
| Median (31 companies) | 13.9% | 9.9% | 7.4% | 7.8% | 9.5% |
|---|
| Frontier Services Group Ltd ($500) | 116.4% | -47.1% | -400.3% | -36.8% | -156.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Harvest Maeta Group Holdings Ltd ($3683) | 150.5% | 4.0% | 6.1% | 40.7% | 164.7% |
| MTR Corp Ltd ($66) | 30.0% | 31.1% | 34.5% | 30.8% | 52.0% |
| CIG Yangtze Ports PLC ($8233) | 31.4% | 17.8% | 24.8% | 2.1% | 50.7% |
| Transport International Holdings Ltd ($62) | 10.9% | 7.9% | 16.2% | 16.0% | 26.2% |
| Qinhuangdao Port Co Ltd ($3369) | 47.2% | 57.9% | 35.8% | 46.3% | 21.0% |
| |
|---|
| Median (31 companies) | 11.1% | 7.9% | 9.0% | 6.8% | 9.0% |
|---|
| Frontier Services Group Ltd ($500) | 5.4% | 6.3% | 3.6% | 63.3% | 75.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Changan Minsheng APLL Logistics Co Ltd ($1292) | 34.2% | 21.1% | 20.9% | 19.1% | 19.3% |
| Kwoon Chung Bus Holdings Ltd ($306) | 6.9% | 3.6% | 5.7% | 9.2% | 14.6% |
| SITC International Holdings Co Ltd ($1308) | 9.0% | 8.2% | 9.1% | 9.1% | 11.2% |
| CIG Yangtze Ports PLC ($8233) | 4.3% | 4.9% | 5.7% | 11.0% | 11.1% |
| On Time Logistics Holdings Ltd ($6123) | | 15.6% | 15.5% | 16.7% | 11.1% |
| |
|---|
| Median (31 companies) | 5.2% | 3.5% | 3.7% | 3.7% | 3.9% |
|---|
| Frontier Services Group Ltd ($500) | | -3.7% | -13.8% | -11.4% | -27.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jinhui Holdings Co Ltd ($137) | 2.8x | 5.0x | 4.2x | 17.5x | 19.6x |
| China Shipping Development Co Ltd ($1138) | 7.2x | 20.2x | 92.8x | 12.8x | 11.4x |
| China COSCO Holdings Co Ltd ($1919) | | | 18.8x | 9.0x | 8.1x |
| Pacific Basin Shipping Ltd ($2343) | 0.8x | 2.1x | 4.6x | | 4.7x |
| AMS Public Transport Holdings Ltd ($77) | 0.7x | 1.2x | 11.6x | 7.7x | 4.5x |
| |
|---|
| Median (21 companies) | 0.5x | 1.1x | 1.5x | 0.8x | 1.1x |
|---|
