KFM Kingdom Holdings Ltd EBITDA dropped on 97.9% and EBITDA Margin decreased on 9.2 pp from 9.5% to 0.24%
28/06/2016 • About KFM Kingdom Holdings Ltd (
$3816) • By InTwits
KFM Kingdom Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- KFM Kingdom Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -6.1%
- EBITDA Margin is quite volatile: 0.2% in FY2016, 9.5% in FY2015, 9.1% in FY2014, 9.7% in FY2013, 12.3% in FY2012
- KFM Kingdom Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.8%. At the same time it's in pair with industry average of 8.7%.
- CAPEX is quite volatile: 71.2 in FY2016, 99.6 in FY2015, 141 in FY2014, 97.6 in FY2013, 44.2 in FY2012
- The company has unprofitable business model: ROIC is at -6.1%
- It operates with high leverage: Net Debt/EBITDA is 53.8x while industry average is 2.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
KFM Kingdom Holdings Ltd ($3816) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 951 | 847 | 946 | 1,038 | 853 | -17.9% |
| Gross Profit | 235 | 205 | 208 | 250 | 178 | -28.6% |
| SG&A | | 158 | 142 | 198 | 223 | 12.4% |
| EBITDA | 117 | 82 | 86 | 98 | 2 | -97.9% |
| Net Income | 94 | 40 | 36 | 31 | -46 | -245.6% |
Balance Sheet
|
|---|
| Cash | 133 | 219 | 105 | 159 | 106 | -32.9% |
| Short Term Debt | 113 | 211 | 151 | 198 | 217 | 9.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 44 | 98 | 141 | 100 | 71 | -28.5% |
Ratios
|
|---|
| Revenue growth | 15.9% | -11.0% | 11.7% | 9.8% | -17.9% | |
| EBITDA growth | -32.2% | -30.0% | 4.3% | 14.5% | -97.9% | |
| Gross Margin | 24.6% | 24.3% | 22.0% | 24.0% | 20.9% | -3.1% |
| EBITDA Margin | 12.3% | 9.7% | 9.1% | 9.5% | 0.2% | -9.2% |
| Net Income Margin | 9.9% | 4.7% | 3.8% | 3.0% | -5.4% | -8.4% |
| SG&A, % of revenue | | 18.6% | 15.0% | 19.1% | 26.1% | 7.0% |
| CAPEX, % of revenue | 4.6% | 11.5% | 14.9% | 9.6% | 8.4% | -1.2% |
| ROIC | 17.1% | 7.5% | 6.6% | 7.4% | -6.1% | -13.5% |
| ROE | 21.5% | 8.5% | 7.2% | 6.1% | -9.3% | -15.3% |
| Net Debt/EBITDA | -0.2x | -0.1x | 0.5x | 0.4x | 53.8x | 53.4x |
Revenue and profitability
The company's Revenue dropped on 17.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 9.2 pp from 9.5% to 0.24% in FY2016.
Gross Margin decreased on 3.1 pp from 24.0% to 20.9% in FY2016. SG&A as a % of Revenue increased on 7.0 pp from 19.1% to 26.1% in FY2016.
Net Income marign decreased on 8.4 pp from 3.0% to -5.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 KFM Kingdom Holdings Ltd had CAPEX/Revenue of 8.4%. KFM Kingdom Holdings Ltd's CAPEX/Revenue decreased on 3.2 pp from 11.5% in FY2013 to 8.4% in FY2016. It's average level of CAPEX/Revenue for the last three years was 10.9%.Battling declining revenue the company made large investments to CAPEX (3,465% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-6.13%) and ROE (-9.27%). ROIC dropped on 13.5 pp from 7.4% to -6.1% in FY2016. ROE dropped on 15.3 pp from 6.1% to -9.3% in FY2016.
Leverage (Debt)
Debt level is 53.8x Net Debt / EBITDA and 105.5x Debt / EBITDA. Net Debt / EBITDA surged on 53.4x from 0.4x to 53.8x in FY2016. Debt increased on 9.7% while cash dropped on 32.9%.
Appendix 1: Peers in Engineering&Construction
Below you can find KFM Kingdom Holdings Ltd benchmarking vs. other companies in Engineering&Construction 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CNQC International Holdings Ltd ($1240) | 21.6% | 91.0% | 103.7% | 807.4% | |
| China National Culture Group Ltd ($745) | | -76.8% | -55.8% | 592.3% | 86.7% |
| Vision Fame International Holding Ltd ($1315) | | 45.9% | -10.5% | 105.6% | 40.9% |
| Sino Credit Holdings Ltd ($628) | -13.8% | | | 97.4% | |
| Grand Ming Group Holdings Ltd ($1271) | | -26.9% | -37.4% | 74.8% | 14.3% |
| |
|---|
| Median (44 companies) | 12.8% | 24.8% | 21.4% | 10.8% | 14.3% |
|---|
| KFM Kingdom Holdings Ltd ($3816) | | -11.0% | 11.7% | 9.8% | -17.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 66.4% | 62.1% | 62.4% | 61.1% | |
| Huayu Expressway Group Ltd ($1823) | 43.6% | 65.6% | 64.0% | 58.9% | |
| Broad Greenstate International Co Ltd ($1253) | 20.1% | 28.7% | 35.8% | 36.7% | |
| Sam Woo Construction Group Ltd ($3822) | 33.2% | 27.3% | 33.6% | 36.0% | 19.8% |
| China National Culture Group Ltd ($745) | 0.9% | 12.1% | 10.3% | 32.3% | 19.2% |
| |
|---|
| Median (39 companies) | 16.4% | 16.0% | 15.4% | 15.6% | 13.7% |
|---|
| KFM Kingdom Holdings Ltd ($3816) | 24.6% | 24.3% | 22.0% | 24.0% | 20.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Huayu Expressway Group Ltd ($1823) | 46.2% | 73.8% | 77.1% | 76.2% | |
| HNA Infrastructure Company Ltd ($357) | 62.8% | 63.7% | 62.8% | 61.7% | |
| Cheung Kong Infrastructure Holdings Ltd ($1038) | 31.2% | 20.6% | 36.2% | 60.9% | |
| Beijing Capital International Airport Co Ltd ($694) | 53.4% | 52.9% | 50.3% | 51.6% | |
| China National Culture Group Ltd ($745) | -30.4% | -72.7% | -279.2% | 45.3% | -14.6% |
| |
|---|
| Median (44 companies) | 9.9% | 11.2% | 9.7% | 8.3% | 4.3% |
|---|
| KFM Kingdom Holdings Ltd ($3816) | 12.3% | 9.7% | 9.1% | 9.5% | 0.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HNA Infrastructure Company Ltd ($357) | 36.8% | 5.7% | 85.4% | 155.4% | |
| Grand Ming Group Holdings Ltd ($1271) | 0.0% | 16.1% | 8.7% | 33.8% | 14.0% |
| Beijing Capital International Airport Co Ltd ($694) | 3.5% | 6.6% | 7.2% | 28.2% | |
| NEW Concepts Holdings Ltd ($2221) | 1.7% | 1.2% | 3.1% | 20.5% | 0.3% |
| Louis XIII Holdings Ltd ($577) | 1.2% | 29.5% | 9.3% | 16.1% | 47.3% |
| |
|---|
| Median (44 companies) | 2.2% | 2.5% | 1.7% | 2.0% | 1.7% |
|---|
| KFM Kingdom Holdings Ltd ($3816) | 4.6% | 11.5% | 14.9% | 9.6% | 8.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| In Construction Holdings Ltd ($1500) | | 52.8% | 37.0% | 49.4% | 40.4% |
| Chun Sing Engineering Holdings Ltd ($2277) | | 98.3% | 54.9% | 43.7% | |
| NEW Concepts Holdings Ltd ($2221) | | 51.0% | 78.8% | 39.0% | 23.3% |
| Sam Woo Construction Group Ltd ($3822) | | 28.2% | 28.7% | 33.5% | 18.3% |
| Ngai Shun Holdings Ltd ($1246) | 68.8% | 77.2% | 45.2% | 31.0% | |
| |
|---|
| Median (46 companies) | 5.8% | 5.9% | 4.4% | 5.5% | 3.4% |
|---|
| KFM Kingdom Holdings Ltd ($3816) | 17.1% | 7.5% | 6.6% | 7.4% | -6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Deson Development International Holdings ($262) | 3.8x | 4.9x | 13.7x | 47.0x | |
| Hsin Chong Construction Group Ltd ($404) | 1.8x | 8.0x | 10.2x | 41.7x | |
| China Resources and Transportation Group Ltd ($269) | | | 66.7x | 29.7x | |
| CNC Holdings Ltd ($8356) | | 22.0x | 21.9x | 24.3x | 2.7x |
| Louis XIII Holdings Ltd ($577) | 0.8x | -12.5x | -23.2x | 19.1x | |
| |
|---|
| Median (38 companies) | 0.9x | 0.3x | 0.2x | 1.3x | -1.1x |
|---|
| KFM Kingdom Holdings Ltd ($3816) | -0.2x | -0.1x | 0.5x | 0.4x | 53.8x |
