Cathay Pacific Airways Ltd Net Debt / EBITDA jumped on 1.7x from 6.7x to 8.4x in 2017 and Debt surged on 11.7%
14/03/2018 • About Cathay Pacific Airways Ltd (
$293) • By InTwits
Cathay Pacific Airways Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cathay Pacific Airways Ltd doesn't have a profitable business model yet: 2017 ROIC is -1.0%
- Cathay Pacific Airways Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.1%. At the same time it's in pair with industry average of 17.4%.
- CAPEX is quite volatile: 12,154 in 2017, 9,905 in 2016, 8,485 in 2015, 4,319 in 2014, 4,881 in 2013
- The company has unprofitable business model: ROIC is at -1.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 8.4x while industry average is 8.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cathay Pacific Airways Ltd ($293) key annual financial indicators
| mln. HKD | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 100,484 | 105,991 | 102,342 | 92,751 | 97,284 | 4.9% |
| EBITDA | 11,252 | 13,070 | 15,354 | 8,308 | 7,933 | -4.5% |
| Net Income | 2,620 | 3,150 | 6,000 | -575 | -1,259 | |
Balance Sheet
|
|---|
| Cash | 21,387 | 18,922 | 12,932 | 14,734 | 11,966 | -18.8% |
| Short Term Debt | 10,218 | 9,781 | 13,238 | 11,263 | 8,888 | -21.1% |
| Long Term Debt | 56,834 | 55,315 | 49,867 | 58,906 | 69,506 | 18.0% |
Cash flow
|
|---|
| Capex | 20,534 | 14,818 | 13,179 | 14,886 | 16,926 | 13.7% |
Ratios
|
|---|
| Revenue growth | 1.1% | 5.5% | -3.4% | -9.4% | 4.9% | |
| EBITDA growth | 38.6% | 16.2% | 17.5% | -45.9% | -4.5% | |
| EBITDA Margin | 11.2% | 12.3% | 15.0% | 9.0% | 8.2% | -0.8% |
| Net Income Margin | 2.6% | 3.0% | 5.9% | -0.6% | -1.3% | -0.7% |
| CAPEX, % of revenue | 20.4% | 14.0% | 12.9% | 16.0% | 17.4% | 1.3% |
| ROIC | 2.9% | 3.5% | 5.3% | -0.2% | -1.0% | -0.8% |
| ROE | 4.4% | 5.5% | 12.0% | -1.1% | -2.2% | -1.0% |
| Net Debt/EBITDA | 4.1x | 3.5x | 3.3x | 6.7x | 8.4x | 1.7x |
Revenue and profitability
Cathay Pacific Airways Ltd's Revenue increased on 4.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.62 pp from 20.4% to 21.0% in 2017.
Net Income marign decreased slightly on 0.67 pp from -0.62% to -1.3% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 Cathay Pacific Airways Ltd had CAPEX/Revenue of 17.4%. CAPEX/Revenue increased on 3.4 pp from 14.0% in 2014 to 17.4% in 2017. It's average CAPEX/Revenue for the last three years was 15.4%.The company investments to CAPEX were large: 213% of EBITDA.
Return on investment
The company operates at negative ROIC (-0.98%) and ROE (-2.16%). ROIC decreased slightly on 0.79 pp from -0.19% to -0.98% in 2017. ROE decreased slightly on 1.0 pp from -1.1% to -2.2% in 2017.
Leverage (Debt)
Debt level is 8.4x Net Debt / EBITDA and 9.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.7x from 6.7x to 8.4x in 2017. Debt jumped on 11.7% while cash dropped on 18.8%.
Appendix 1: Peers in Airlines
Below you can find Cathay Pacific Airways Ltd benchmarking vs. other companies in Airlines 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.
