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PetroChina Co Ltd revenue dropped on 17.2% and EBITDA Margin increased slightly on 0.67 pp from 16.3% to 17.0%

30/03/2017 • About PetroChina Co Ltd ($857) • By InTwits

PetroChina Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • PetroChina Co Ltd is a company in decline: 2016 revenue growth was -17.2%, 5 years revenue CAGR was -6.5%
  • PetroChina Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.4%. At the same time it's in pair with industry average of 12.1%.
  • The company has potentially unprofitable business model: ROIC is at 2.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

PetroChina Co Ltd ($857) key annual financial indicators

mln. CNY201220132014201520162016/2015
Gross Profit193,350
Net Income115,326129,599107,17235,5177,900-77.8%
Balance Sheet
Short Term Debt151,052192,586167,783106,027153,31744.6%
Long Term Debt293,774302,862370,301434,475372,887-14.2%
Cash flow
Revenue growth9.6%2.9%1.1%-24.4%-17.2%
EBITDA growth1.8%7.8%-1.3%-18.8%-13.8%
Gross Margin13.5%13.5%
EBITDA Margin14.9%15.6%15.2%16.3%17.0%0.7%
Net Income Margin5.3%5.7%4.7%2.1%0.6%-1.5%
SG&A, % of revenue3.4%3.5%3.2%4.1%8.7%4.6%
CAPEX, % of revenue14.2%13.5%13.4%12.6%13.3%0.6%
Net Debt/EBITDA1.2x1.3x1.3x1.7x1.8x0.1x

PetroChina Co Ltd ($857) key quoterly financial indicators

mln. CNY16Q116Q216Q316Q4YoY change
Net Income-13,78514,3161,2006,176
Balance Sheet
Short Term Debt138,538136,543141,016153,317
Long Term Debt424,830414,932383,941372,887
Net Income Margin -3.9% 3.7% 0.3% 1.5%

Revenue and profitability

PetroChina Co Ltd's Revenue dropped on 17.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.67 pp from 16.3% to 17.0% in 2016.

SG&A as a % of Revenue increased on 4.6 pp from 4.1% to 8.7% in 2016.

Net Income marign decreased slightly on 1.5 pp from 2.1% to 0.55% in 2016.

Capital expenditures (CAPEX) and working capital investments

In 2016 the company had CAPEX/Revenue of 13.3%. PetroChina Co Ltd showed almost no change in CAPEX/Revenue from 2013 to 2016. For the last three years the average CAPEX/Revenue was 13.1%.Battling declining revenue the company invested a large share of EBITDA (78.0%) to CAPEX but that didn't help at least in this year.

Return on investment

The company operates at low ROIC (2.02%) and ROE (0.67%). ROIC decreased on 2.2 pp from 4.2% to 2.0% in 2016. ROE decreased on 2.3 pp from 3.0% to 0.67% in 2016.

Leverage (Debt)

Debt level is 1.8x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.1x from 1.7x to 1.8x in 2016. Debt decreased on 2.6% while cash surged on 35.5%.

Appendix 1: Peers in Oil&Gas

Below we provide PetroChina Co Ltd benchmarking against other companies in Oil&Gas 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
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)1.6x2.3x3.7x4.8x
Brightoil Petroleum Holdings Ltd ($933)8.9x3.1x2.9x2.6x
Shanghai Tonva Petrochemical Co Ltd ($1103)6.0x4.3x3.6x2.8x3.5x
China CBM Group Co Ltd ($8270)3.2x3.3x2.1x
CNOOC Ltd ($883)0.9x0.9x1.7x2.1x
Median (7 companies)1.6x1.0x3.1x2.1x2.6x