CNOOC Ltd Net Income dropped on 96.9% in 2016 and EBITDA Margin decreased on 8.2 pp from 53.0% to 44.8%
23/03/2017 • About CNOOC Ltd (
$883) • By InTwits
CNOOC Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNOOC Ltd is a company in decline: 2016 revenue growth was -14.6%, 5 years revenue CAGR was -9.5%
- CNOOC Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 33.0%. At the same time it's a lot of higher than industry average of 12.1%.
- CAPEX is quite volatile: 2,147 in 2016, 2,063 in 2015, 1,831 in 2014, 2,439 in 2013, 151 in 2012
- The company has unprofitable business model: ROIC is at -0.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CNOOC Ltd ($883) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 247,627 | 285,857 | 274,634 | 171,437 | 146,490 | -14.6% |
| SG&A | 3,377 | 7,859 | 6,613 | 5,705 | 6,493 | 13.8% |
| EBITDA | 120,044 | 134,959 | 139,201 | 90,895 | 65,594 | -27.8% |
| Net Income | 63,691 | 56,461 | 60,199 | 20,246 | 637 | -96.9% |
Balance Sheet
|
|---|
| Cash | 55,024 | 14,318 | 14,918 | 11,867 | 13,735 | 15.7% |
| Short Term Debt | 28,830 | 49,841 | 31,180 | 33,585 | 19,678 | -41.4% |
| Long Term Debt | 29,056 | 82,011 | 105,383 | 131,060 | 130,798 | -0.2% |
Cash flow
|
|---|
| Capex | 62,898 | 86,717 | 95,673 | 67,674 | 51,347 | -24.1% |
Ratios
|
|---|
| Revenue growth | 2.8% | 15.4% | -3.9% | -37.6% | -14.6% | |
| EBITDA growth | -0.9% | 12.4% | 3.1% | -34.7% | -27.8% | |
| EBITDA Margin | 48.5% | 47.2% | 50.7% | 53.0% | 44.8% | -8.2% |
| Net Income Margin | 25.7% | 19.8% | 21.9% | 11.8% | 0.4% | -11.4% |
| SG&A, % of revenue | 1.4% | 2.7% | 2.4% | 3.3% | 4.4% | 1.1% |
| CAPEX, % of revenue | 25.4% | 30.3% | 34.8% | 39.5% | 35.1% | -4.4% |
| ROIC | 25.7% | 18.1% | 15.8% | 3.2% | -0.6% | -3.9% |
| ROE | 22.2% | 17.3% | 16.7% | 5.3% | 0.2% | -5.1% |
| Net Debt/EBITDA | 0.0x | 0.9x | 0.9x | 1.7x | 2.1x | 0.4x |
Revenue and profitability
CNOOC Ltd's Revenue dropped on 14.6%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 8.2 pp from 53.0% to 44.8% in 2016.
SG&A as a % of Revenue increased slightly on 1.1 pp from 3.3% to 4.4% in 2016.
Net Income marign dropped on 11.4 pp from 11.8% to 0.43% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 CNOOC Ltd had CAPEX/Revenue of 35.1%. CAPEX/Revenue increased on 4.7 pp from 30.3% in 2013 to 35.1% in 2016. For the last three years the average CAPEX/Revenue was 36.5%.The company invested a big chunk of EBITDA (78.3%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-0.62%) and low but positive ROE (0.17%). ROIC decreased on 3.9 pp from 3.2% to -0.62% in 2016. ROE decreased on 5.1 pp from 5.3% to 0.17% in 2016.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA surged on 0.4x from 1.7x to 2.1x in 2016. Debt decreased on 8.6% while cash surged on 15.7%.
Management team
Yang Hua is a CNOOC Ltd's CEO. Yang Hua has spent 8 years at the company. The company's CFO is Zhong Hua. Zhong Hua has 8 years tenure at the company.
Appendix 1: Peers in Oil&Gas
Below you can find CNOOC Ltd benchmarking vs. other companies in Oil&Gas 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 |
|---|
| Enviro Energy International Holdings Ltd ($1102) | -57.9% | 1,572.5% | -9.6% | 1,162.8% | |
| Sino Oil And Gas Holdings Ltd ($702) | -17.5% | -25.3% | -23.4% | 305.2% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | | 33.1% | -10.1% | 55.4% | 74.7% |
| China CBM Group Co Ltd ($8270) | -27.6% | 1.8% | 60.9% | 9.3% | |
| Yanchang Petroleum International Ltd ($346) | 641.9% | 155.6% | 15.5% | 4.4% | |
| |
|---|
| Median (15 companies) | -13.9% | 8.7% | -4.6% | -11.5% | 18.7% |
|---|
| CNOOC Ltd ($883) | | | -3.9% | -37.6% | -14.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| United Energy Group Ltd ($467) | 39.4% | 48.0% | 53.8% | 51.5% | 52.6% |
| EPI Holdings Ltd ($689) | 58.0% | 50.7% | 54.6% | 41.2% | |
| Zhongyu Gas Holdings Ltd ($3633) | 23.6% | 23.8% | 24.9% | 24.0% | |
| South Sea Petroleum Holdings Ltd ($76) | 27.3% | 25.3% | 38.5% | 22.2% | |
| COSCO International Holdings Ltd ($517) | 6.9% | 7.5% | 10.6% | 11.5% | |
| |
|---|
| Median (11 companies) | 8.8% | 5.4% | 9.7% | 6.1% | 4.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kunlun Energy Co Ltd ($135) | 47.0% | 39.5% | 34.9% | 30.9% | |
| Zhongyu Gas Holdings Ltd ($3633) | 18.6% | 18.9% | 21.0% | 21.5% | |
| China CBM Group Co Ltd ($8270) | 16.0% | -4.7% | 7.5% | 11.4% | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 4.2% | 6.0% | 6.9% | 5.4% | 3.5% |
| Brightoil Petroleum Holdings Ltd ($933) | 1.1% | -0.6% | 1.4% | 4.7% | 6.5% |
| |
|---|
| Median (15 companies) | 2.1% | -0.1% | 3.5% | -10.9% | 5.0% |
|---|
| CNOOC Ltd ($883) | | 47.2% | 50.7% | 53.0% | 44.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| MIE Holdings Corp ($1555) | 52.2% | 43.3% | 44.1% | 62.4% | |
| United Energy Group Ltd ($467) | 37.2% | 62.7% | 42.4% | 49.1% | |
| Zhongyu Gas Holdings Ltd ($3633) | 8.2% | 17.8% | 18.9% | 22.9% | |
| Kunlun Energy Co Ltd ($135) | 46.7% | 35.5% | 19.9% | 14.2% | |
| EPI Holdings Ltd ($689) | 30.6% | 30.9% | 4.1% | 12.8% | |
| |
|---|
| Median (15 companies) | 13.4% | 5.3% | 4.1% | 5.1% | 2.4% |
|---|
| CNOOC Ltd ($883) | | 30.3% | 34.8% | 39.5% | 35.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 7.3% | 12.6% | 13.0% | 13.9% | 9.6% |
| Brightoil Petroleum Holdings Ltd ($933) | 4.2% | -4.4% | 6.5% | 13.8% | 6.7% |
| Zhongyu Gas Holdings Ltd ($3633) | 17.4% | 15.0% | 12.3% | 8.2% | |
| Kunlun Energy Co Ltd ($135) | 13.0% | 12.6% | 11.0% | 7.7% | |
| COSCO International Holdings Ltd ($517) | 3.8% | 2.4% | 2.9% | 2.8% | |
| |
|---|
| Median (17 companies) | -0.7% | -0.0% | -0.6% | -3.7% | 6.7% |
|---|
| CNOOC Ltd ($883) | | 18.1% | 15.8% | 3.2% | -0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zhongyu Gas Holdings Ltd ($3633) | 1.6x | 2.3x | 3.7x | 4.8x | |
| Brightoil Petroleum Holdings Ltd ($933) | 8.9x | | 3.1x | 2.9x | 2.6x |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 6.0x | 4.3x | 3.6x | 2.8x | 3.5x |
| China CBM Group Co Ltd ($8270) | 3.2x | | 3.3x | 2.1x | |
| Kunlun Energy Co Ltd ($135) | 0.8x | 1.0x | 0.9x | 0.9x | |
| |
|---|
| Median (6 companies) | 1.6x | 1.0x | 3.2x | 2.4x | 3.0x |
|---|
| CNOOC Ltd ($883) | | 0.9x | 0.9x | 1.7x | 2.1x |
