Orient Overseas International Ltd Net Debt / EBITDA jumped on 6.8x from 3.9x to 10.7x in 2016 and Debt showed almost no change
13/03/2017 • About Orient Overseas International Ltd (
$316) • By InTwits
Orient Overseas International Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Orient Overseas International Ltd is a company in decline: FY2016 revenue growth was -11.0%, 5 years revenue CAGR was -2.5%
- Orient Overseas International Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 10.7%.
- CAPEX is quite volatile: 252 in FY2016, 366 in FY2015, 361 in FY2014, 574 in FY2013, 732 in FY2012
- The company has unprofitable business model: ROIC is at -2.0%
- It operates with high leverage: Net Debt/EBITDA is 10.7x while industry average is 3.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Orient Overseas International Ltd ($316) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,459 | 6,232 | 6,522 | 5,953 | 5,298 | -11.0% |
| Gross Profit | 652 | 460 | 646 | 691 | 265 | -61.6% |
| SG&A | 441 | 415 | 432 | 442 | | -100.0% |
| EBITDA | 479 | 352 | 592 | 613 | 231 | -62.3% |
| Net Income | 295 | 47 | 271 | 284 | -219 | -177.2% |
Balance Sheet
|
|---|
| Cash | 1,597 | 1,720 | 1,943 | 1,738 | 1,626 | -6.4% |
| Short Term Debt | 556 | 268 | 389 | 439 | 601 | 37.1% |
| Long Term Debt | 2,326 | 3,266 | 3,596 | 3,663 | 3,489 | -4.7% |
Cash flow
|
|---|
| Capex | 732 | 574 | 361 | 366 | 252 | -31.2% |
Ratios
|
|---|
| Revenue growth | 7.4% | -3.5% | 4.7% | -8.7% | -11.0% | |
| EBITDA growth | 27.5% | -26.4% | 68.1% | 3.5% | -62.3% | |
| Gross Margin | 10.1% | 7.4% | 9.9% | 11.6% | 5.0% | -6.6% |
| EBITDA Margin | 7.4% | 5.7% | 9.1% | 10.3% | 4.4% | -5.9% |
| Net Income Margin | 4.6% | 0.8% | 4.1% | 4.8% | -4.1% | -8.9% |
| SG&A, % of revenue | 6.8% | 6.7% | 6.6% | 7.4% | | -7.4% |
| CAPEX, % of revenue | 11.3% | 9.2% | 5.5% | 6.2% | 4.8% | -1.4% |
| ROIC | 3.2% | 0.5% | 3.1% | 3.3% | -2.0% | -5.3% |
| ROE | 6.8% | 1.1% | 5.9% | 6.0% | -4.7% | -10.7% |
| Net Debt/EBITDA | 2.7x | 5.1x | 3.4x | 3.9x | 10.7x | 6.8x |
Revenue and profitability
The company's Revenue dropped on 11.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.9 pp from 10.3% to 4.4% in FY2016.
Gross Margin decreased on 6.6 pp from 11.6% to 5.0% in FY2016.
Net Income marign decreased on 8.9 pp from 4.8% to -4.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Orient Overseas International Ltd had CAPEX/Revenue of 4.8%. Orient Overseas International Ltd's CAPEX/Revenue decreased on 4.5 pp from 9.2% in FY2013 to 4.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 5.5%.The company has spent a lot to CAPEX (109% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-2.01%) and ROE (-4.71%). ROIC decreased on 5.3 pp from 3.3% to -2.0% in FY2016. ROE dropped on 10.7 pp from 6.0% to -4.7% in FY2016.
Leverage (Debt)
Debt level is 10.7x Net Debt / EBITDA and 17.7x Debt / EBITDA. Net Debt / EBITDA surged on 6.8x from 3.9x to 10.7x in FY2016. Debt showed almost no change in FY2016 while cash decreased on 6.4%.
Management team
Orient Overseas International Ltd's CEO is Tung Chee Chen. Tung Chee Chen has 22 years tenure at the company. Orient Overseas International Ltd's CFO Tung Lieh Sing "Alan" has spent 5 years at the company.
Appendix 1: Peers in Transportation
Below you can find Orient Overseas International Ltd benchmarking vs. other companies in Transportation 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 |
|---|
| 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) | 8.6% | 4.6% | 5.6% | -5.7% | -13.7% |
|---|
| Orient Overseas International Ltd ($316) | | -3.5% | 4.7% | -8.7% | -11.0% |
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 (27 companies) | 13.2% | 11.3% | 11.3% | 12.6% | -5.0% |
|---|
| Orient Overseas International Ltd ($316) | 10.1% | 7.4% | 9.9% | 11.6% | 5.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| MTR Corp Ltd ($66) | 42.7% | 37.6% | 45.2% | 41.6% | 34.9% |
| 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% |
| |
|---|
| Median (31 companies) | 9.9% | 7.4% | 7.2% | 6.9% | 1.9% |
|---|
| Orient Overseas International Ltd ($316) | 7.4% | 5.7% | 9.1% | 10.3% | 4.4% |
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% | |
| MTR Corp Ltd ($66) | 31.1% | 34.5% | 30.8% | 52.0% | |
| 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% | |
| |
|---|
| Median (31 companies) | 7.7% | 8.5% | 7.4% | 9.2% | 10.5% |
|---|
| Orient Overseas International Ltd ($316) | 11.3% | 9.2% | 5.5% | 6.2% | 4.8% |
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) | 3.5% | 3.7% | 3.7% | 3.9% | -2.4% |
|---|
| Orient Overseas International Ltd ($316) | 3.2% | 0.5% | 3.1% | 3.3% | -2.0% |
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 | 1.7x |
|---|
| Orient Overseas International Ltd ($316) | 2.7x | 5.1x | 3.4x | 3.9x | 10.7x |
