China Petroleum & Chemical Corp reports 6.3% EBITDA growth and 1.0 pp EBITDA Margin growth from 8.6% to 9.6%
24/03/2017 • About China Petroleum & Chemical Corp (
$386) • By InTwits
China Petroleum & Chemical Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Petroleum & Chemical Corp is a company in decline: 2016 revenue growth was -4.8%, 5 years revenue CAGR was -7.2%
- China Petroleum & Chemical Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%.
- The company has potentially unprofitable business model: ROIC is at 4.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Petroleum & Chemical Corp ($386) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,733,618 | 2,833,247 | 2,781,641 | 1,784,026 | 1,698,905 | -4.8% |
| Gross Profit | | | | | 206,740 | |
| SG&A | 61,130 | 69,892 | 68,330 | 62,545 | 123,705 | 97.8% |
| EBITDA | 169,118 | 178,050 | 163,584 | 153,396 | 161,646 | 5.4% |
| Net Income | 63,879 | 66,132 | 46,466 | 32,281 | 46,416 | 43.8% |
Balance Sheet
|
|---|
| Cash | 10,864 | 15,101 | 10,100 | 43,553 | 49,468 | 13.6% |
| Short Term Debt | 115,982 | 163,870 | 178,148 | 119,572 | 81,174 | -32.1% |
| Long Term Debt | 162,116 | 145,590 | 150,932 | 139,746 | 117,446 | -16.0% |
Cash flow
|
|---|
| Capex | 157,066 | 154,946 | 124,381 | 102,657 | 72,847 | -29.0% |
Ratios
|
|---|
| Revenue growth | 11.0% | 3.6% | -1.8% | -35.9% | -4.8% | |
| EBITDA growth | -0.1% | 5.3% | -8.1% | -6.2% | 5.4% | |
| Gross Margin | | | | | 12.2% | 12.2% |
| EBITDA Margin | 6.2% | 6.3% | 5.9% | 8.6% | 9.5% | 0.9% |
| Net Income Margin | 2.3% | 2.3% | 1.7% | 1.8% | 2.7% | 0.9% |
| SG&A, % of revenue | 2.2% | 2.5% | 2.5% | 3.5% | 7.3% | 3.8% |
| CAPEX, % of revenue | 5.7% | 5.5% | 4.5% | 5.8% | 4.3% | -1.5% |
| ROIC | 11.9% | 10.6% | 7.5% | 5.5% | 4.9% | -0.6% |
| ROE | 13.0% | 12.2% | 8.0% | 5.1% | 6.7% | 1.6% |
| Net Debt/EBITDA | 1.6x | 1.7x | 1.9x | 1.4x | 0.9x | -0.5x |
China Petroleum & Chemical Corp ($386) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 403,832 | 407,429 | 426,483 | 506,033 | | | | |
| Net Income | 6,668 | 13,060 | 9,916 | 17,250 | | | | |
Balance Sheet
|
|---|
| Cash | 63,889 | 73,250 | 86,383 | 49,468 | | | | |
| Short Term Debt | 107,169 | 109,514 | 76,590 | 81,174 | | | | |
| Long Term Debt | 137,668 | 120,042 | 132,332 | 117,446 | | | | |
Ratios
|
|---|
| Gross Margin | 12.7% | 13.7% | 11.6% | 11.1% | | | | |
| Net Income Margin | 1.7% | 3.2% | 2.3% | 3.4% | | | | |
Revenue and profitability
The company's Revenue decreased on 4.8%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.92 pp from 8.6% to 9.5% in 2016.
SG&A as a % of Revenue increased on 3.8 pp from 3.5% to 7.3% in 2016.
Net Income marign increased slightly on 0.92 pp from 1.8% to 2.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.3% in 2016. CAPEX/Revenue decreased slightly on 1.2 pp from 5.5% in 2013 to 4.3% in 2016. It's average level of CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at low ROIC (4.92%) and ROE (6.69%). ROIC decreased slightly on 0.57 pp from 5.5% to 4.9% in 2016. ROE increased slightly on 1.6 pp from 5.1% to 6.7% in 2016.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 1.4x to 0.9x in 2016. Debt dropped on 23.4% while cash jumped on 13.6%.
Appendix 1: Peers in Oil&Gas
Below you can find China Petroleum & Chemical Corp 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 (16 companies) | -13.9% | 8.7% | -4.3% | -11.9% | 13.6% |
|---|
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 |
|---|
| CNOOC Ltd ($883) | | 47.2% | 50.7% | 53.0% | 44.8% |
| 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% |
| |
|---|
| Median (16 companies) | 2.1% | 0.4% | 5.2% | -6.7% | 6.5% |
|---|
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% | |
| CNOOC Ltd ($883) | | 30.3% | 34.8% | 39.5% | 35.1% |
| 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% | |
| |
|---|
| Median (16 companies) | 13.4% | 7.9% | 7.5% | 6.5% | 3.1% |
|---|
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% | |
| CNOOC Ltd ($883) | | 18.1% | 15.8% | 3.2% | -0.6% |
| |
|---|
| Median (18 companies) | -0.7% | 0.8% | 0.1% | -1.7% | 3.3% |
|---|
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 | |
| CNOOC Ltd ($883) | | 0.9x | 0.9x | 1.7x | 2.1x |
| |
|---|
| Median (7 companies) | 1.6x | 1.0x | 3.1x | 2.1x | 2.6x |
|---|
