MTR Corp Ltd reports 21.1% Net Income decline and 6.8 pp EBITDA Margin decline from 41.6% to 34.9%
07/03/2017 • About MTR Corp Ltd (
$66) • By InTwits
MTR Corp Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has potentially unprofitable business model: ROIC is at 5.5%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
MTR Corp Ltd ($66) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 35,739 | 38,707 | 40,156 | 41,701 | 45,189 | 8.4% |
| SG&A | 479 | 515 | 640 | 610 | 659 | 8.0% |
| EBITDA | 15,250 | 14,548 | 18,169 | 17,366 | 15,754 | -9.3% |
| Net Income | 13,375 | 13,025 | 15,606 | 12,994 | 10,254 | -21.1% |
Balance Sheet
|
|---|
| Cash | 5,105 | 7,209 | 15,413 | 6,227 | 20,290 | 225.8% |
| Short Term Debt | 355 | 47 | 546 | 1,649 | 1,350 | -18.1% |
| Long Term Debt | 34,069 | 35,257 | 30,699 | 29,836 | 49,205 | 64.9% |
Cash flow
|
|---|
| Capex | 11,125 | 13,356 | 12,359 | 21,670 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 6.9% | 8.3% | 3.7% | 3.8% | 8.4% | |
| EBITDA growth | -7.1% | -4.6% | 24.9% | -4.4% | -9.3% | |
| EBITDA Margin | 42.7% | 37.6% | 45.2% | 41.6% | 34.9% | -6.8% |
| Net Income Margin | 37.4% | 33.7% | 38.9% | 31.2% | 22.7% | -8.5% |
| SG&A, % of revenue | 1.3% | 1.3% | 1.6% | 1.5% | 1.5% | -0.0% |
| CAPEX, % of revenue | 31.1% | 34.5% | 30.8% | 52.0% | | -52.0% |
| ROIC | 6.6% | 5.8% | 7.2% | 6.4% | 5.5% | -1.0% |
| ROE | 9.6% | 8.8% | 9.9% | 7.8% | 6.4% | -1.4% |
| Net Debt/EBITDA | 1.9x | 1.9x | 0.9x | 1.5x | 1.9x | 0.5x |
Revenue and profitability
MTR Corp Ltd's Revenue increased on 8.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 62.8% to 64.0% in 2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 8.5 pp from 31.2% to 22.7% in FY2016.
Return on investment
The company operates at low ROIC (5.46%) and ROE (6.42%). ROIC decreased slightly on 0.97 pp from 6.4% to 5.5% in FY2016. ROE decreased slightly on 1.4 pp from 7.8% to 6.4% in FY2016.
Leverage (Debt)
Debt level is 1.9x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA jumped on 0.5x from 1.5x to 1.9x in FY2016. Debt jumped on 60.6% while cash jumped on 226%.
Management team
MTR Corp Ltd's CEO Leong Lincoln has spent 4 years at the company.
Appendix 1: Peers in Transportation
Below we provide MTR Corp 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Noble Century Investment Holdings Ltd ($2322) | | | | 2,388.3% | 326.5% |
| 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) | | 7.9% | 5.5% | 7.9% | 1.1% |
| Guangshen Railway Co Ltd ($525) | 2.7% | 4.7% | -6.9% | 6.9% | |
| |
|---|
| Median (31 companies) | 7.4% | 4.0% | 5.6% | -6.7% | -6.3% |
|---|
| MTR Corp Ltd ($66) | | 8.3% | 3.7% | 3.8% | 8.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CIG Yangtze Ports PLC ($8233) | 51.3% | 44.8% | 46.6% | 48.7% | |
| Qinhuangdao Port Co Ltd ($3369) | 43.1% | 42.4% | 43.3% | 40.5% | |
| Kwoon Chung Bus Holdings Ltd ($306) | 18.9% | 20.4% | 22.7% | 26.8% | 27.5% |
| Chu Kong Shipping Enterprise Group Co Ltd ($560) | 23.1% | 25.1% | 24.1% | 23.1% | |
| Tianjin Port Development Holdings Ltd ($3382) | 22.5% | 18.4% | 13.6% | 22.7% | |
| |
|---|
| Median (28 companies) | 13.1% | 11.2% | 10.8% | 12.1% | -1.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Qinhuangdao Port Co Ltd ($3369) | 46.0% | 44.6% | 46.5% | 41.1% | |
| CIG Yangtze Ports PLC ($8233) | 30.2% | 27.6% | 38.5% | 39.5% | |
| China Shipping Development Co Ltd ($1138) | 12.5% | 3.0% | 24.7% | 26.7% | |
| Kwoon Chung Bus Holdings Ltd ($306) | 13.3% | 16.1% | 20.7% | 26.1% | 25.7% |
| Transport International Holdings Ltd ($62) | 12.1% | 14.4% | 15.7% | 19.6% | |
| |
|---|
| Median (31 companies) | 8.8% | 6.4% | 7.2% | 6.9% | 1.9% |
|---|
| MTR Corp Ltd ($66) | 42.7% | 37.6% | 45.2% | 41.6% | 34.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Harvest Maeta Group Holdings Ltd ($3683) | 4.0% | 6.1% | 40.7% | 164.7% | 8.7% |
| Frontier Services Group Ltd ($500) | 6.3% | 3.6% | 63.3% | 75.9% | |
| CIG Yangtze Ports PLC ($8233) | 17.8% | 24.8% | 2.1% | 50.7% | |
| Transport International Holdings Ltd ($62) | 7.9% | 16.2% | 16.0% | 26.2% | |
| Qinhuangdao Port Co Ltd ($3369) | 57.9% | 35.8% | 46.3% | 21.0% | |
| |
|---|
| Median (31 companies) | 7.7% | 8.5% | 6.8% | 9.0% | 10.5% |
|---|
| MTR Corp Ltd ($66) | 31.1% | 34.5% | 30.8% | 52.0% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Changan Minsheng APLL Logistics Co Ltd ($1292) | 21.1% | 20.9% | 19.1% | 19.3% | |
| Kwoon Chung Bus Holdings Ltd ($306) | 3.6% | 5.7% | 9.2% | 14.6% | 12.4% |
| SITC International Holdings Co Ltd ($1308) | 8.2% | 9.1% | 9.1% | 11.2% | |
| CIG Yangtze Ports PLC ($8233) | 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) | 3.3% | 2.8% | 3.2% | 3.3% | -2.4% |
|---|
| MTR Corp Ltd ($66) | 6.6% | 5.8% | 7.2% | 6.4% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jinhui Holdings Co Ltd ($137) | 5.0x | 4.2x | 17.5x | 19.6x | |
| China Shipping Development Co Ltd ($1138) | 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) | 2.1x | 4.6x | | 4.7x | 12.0x |
| AMS Public Transport Holdings Ltd ($77) | 1.2x | 11.6x | 7.7x | 4.5x | 1.6x |
| |
|---|
| Median (20 companies) | 0.9x | 1.5x | 0.8x | 0.8x | 1.6x |
|---|
| MTR Corp Ltd ($66) | 1.9x | 1.9x | 0.9x | 1.5x | 1.9x |
