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PetroChina Co Ltd revenue jumped on 41.1% while EBITDA Margin decreased slightly on 1.9 pp from 17.0% to 15.1%

22/03/2018 • About PetroChina Co Ltd ($857) • By InTwits

PetroChina Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is relatively stable: 15.1% in 2017 vs. 17.0% in 2016 vs. 15.6% in 2013
  • PetroChina Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.8%. At the same time it's in pair with industry average of 12.1%.
  • The company has potentially unprofitable business model: ROIC is at 3.5%
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. CNY201320142015201620172017/2016
P&L
Revenue2,258,1242,282,9621,725,4281,429,0572,015,89041.1%
Gross Profit193,350-100.0%
SG&A79,02173,41371,270124,32877,042-38.0%
EBITDA351,649347,021281,839242,983305,05525.5%
Net Income129,599107,17235,5177,90022,798188.6%
Balance Sheet
Cash51,40773,77872,77398,617122,77724.5%
Short Term Debt192,586167,783106,027153,317175,28714.3%
Long Term Debt302,862370,301434,475372,887289,858-22.3%
Cash flow
Capex304,100306,551217,750189,421229,23921.0%
Ratios
Revenue growth2.9%1.1%-24.4%-17.2%41.1%
EBITDA growth7.8%-1.3%-18.8%-13.8%25.5%
Gross Margin13.5%-13.5%
EBITDA Margin15.6%15.2%16.3%17.0%15.1%-1.9%
Net Income Margin5.7%4.7%2.1%0.6%1.1%0.6%
SG&A, % of revenue3.5%3.2%4.1%8.7%3.8%-4.9%
CAPEX, % of revenue13.5%13.4%12.6%13.3%11.4%-1.9%
ROIC10.9%9.3%4.2%2.0%3.5%1.5%
ROE11.8%9.3%3.0%0.7%1.9%1.2%
Net Debt/EBITDA1.3x1.3x1.7x1.8x1.1x-0.6x


PetroChina Co Ltd ($857) key quoterly financial indicators

mln. CNY17Q117Q217Q317Q4YoY change
P&L
Revenue445,669435,607430,483558,18626.3%12.8%4.6%34.4%
Net Income5,6996,9754,6885,432-51.3%290.7%-12.0%
Balance Sheet
Cash101,037121,052169,469122,7771.4%19.5%41.3%24.5%
Short Term Debt206,479201,559205,720175,28749.0%47.6%45.9%14.3%
Long Term Debt294,343300,191299,925289,858-30.7%-27.7%-21.9%-22.3%
Ratios
Net Income Margin 1.3% 1.6% 1.1% 1.0%5.2%-2.1%0.8%-0.5%

Revenue and profitability


PetroChina Co Ltd's Revenue jumped on 41.1%. Revenue growth showed slow down in 17Q4 - it was 34.4% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from 17.0% to 15.1% in 2017.

SG&A as a % of Revenue decreased on 4.9 pp from 8.7% to 3.8% in 2017.

Net Income marign increased slightly on 0.58 pp from 0.55% to 1.1% in 2017.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 11.4% in 2017. PetroChina Co Ltd's CAPEX/Revenue decreased on 2.1 pp from 13.4% in 2014 to 11.4% in 2017. It's average level of CAPEX/Revenue for the last three years was 12.4%.PetroChina Co Ltd invested a big chunk of EBITDA (75.1%) to CAPEX to secure its growth.

Return on investment


The company operates at low ROIC (3.53%) and ROE (1.91%). ROIC increased slightly on 1.5 pp from 2.0% to 3.5% in 2017. ROE increased slightly on 1.2 pp from 0.67% to 1.9% in 2017.

Leverage (Debt)


Debt level is 1.1x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 1.8x to 1.1x in 2017. Debt dropped on 11.6% while cash jumped on 24.5%.

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 FY2013 FY2014 FY2015 FY2016 FY2017
PetroAsian Energy Holdings Ltd ($850)191.7%-1.0%-18.1%637.7%
Shanghai Tonva Petrochemical Co Ltd ($1103)33.1%-10.1%55.4%74.7%
COSCO International Holdings Ltd ($517)-7.0%-18.5%-20.9%23.8%
Zhongyu Gas Holdings Ltd ($3633)13.7%9.0%-4.0%13.6%
CNOOC Ltd ($883)-3.9%-37.6%-14.6%27.2%
 
Median (7 companies)8.7%-4.3%-11.9%13.6%27.2%


Top companies by Gross margin, %

Top  FY2013 FY2014 FY2015 FY2016 FY2017
United Energy Group Ltd ($467)48.0%53.8%51.5%52.6%
Brightoil Petroleum Holdings Ltd ($933)2.1%2.1%2.6%4.2%
Shanghai Tonva Petrochemical Co Ltd ($1103)6.8%7.3%6.1%4.2%
PetroAsian Energy Holdings Ltd ($850)4.1%2.7%0.4%2.1%
 
Median (4 companies)5.4%9.7%6.1%4.2%


Top companies by EBITDA margin, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
United Energy Group Ltd ($467)65.3%69.8%-31.9%70.5%
CNOOC Ltd ($883)47.2%50.7%53.0%44.8%52.4%
Brightoil Petroleum Holdings Ltd ($933)-0.6%1.4%4.7%6.5%
Shanghai Tonva Petrochemical Co Ltd ($1103)6.0%6.9%5.4%3.5%
PetroAsian Energy Holdings Ltd ($850)-5.7%-9.8%-10.9%0.2%
 
Median (5 companies)0.4%5.2%-6.7%6.5%52.4%


Top companies by CAPEX/Revenue, %

Top  FY2013 FY2014 FY2015 FY2016 FY2017
CNOOC Ltd ($883)30.3%34.8%39.5%35.1%25.6%
Brightoil Petroleum Holdings Ltd ($933)2.7%0.6%0.9%3.1%
PetroAsian Energy Holdings Ltd ($850)1.0%0.2%0.8%1.7%
 
Median (3 companies)7.9%7.5%6.5%3.1%25.6%


Top companies by ROIC, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
United Energy Group Ltd ($467)10.3%15.7%-25.0%10.8%
Shanghai Tonva Petrochemical Co Ltd ($1103)12.6%13.0%13.9%9.6%
Brightoil Petroleum Holdings Ltd ($933)-4.4%6.5%13.8%6.7%
PetroAsian Energy Holdings Ltd ($850)-10.3%-15.5%-13.4%-0.0%
CNOOC Ltd ($883)18.1%15.8%3.2%-0.6%7.2%
 
Median (8 companies)0.8%0.1%-1.7%3.3%7.2%


Top companies by Net Debt / EBITDA

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
PetroAsian Energy Holdings Ltd ($850)13.9x
Shanghai Tonva Petrochemical Co Ltd ($1103)4.3x3.6x2.8x3.5x
Brightoil Petroleum Holdings Ltd ($933)3.1x2.9x2.6x
CNOOC Ltd ($883)0.9x0.9x1.7x2.1x1.2x
United Energy Group Ltd ($467)1.1x0.6x-0.9x
 
Median (5 companies)1.0x3.1x2.1x2.6x1.2x