CNOOC Ltd Net Income jumped on 3,774% and EBITDA Margin increased on 7.6 pp from 44.8% to 52.4%
29/03/2018 • About CNOOC Ltd (
$883) • By InTwits
CNOOC Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CNOOC Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 33.1%. At the same time it's a lot of higher than industry average of 12.1%.
- CAPEX is quite volatile: 3,262 in 2017, 1,620 in 2016, 1,427 in 2015, 1,738 in 2014, 1,950 in 2013
- The company has business model with low profitability: ROIC is at 7.2%
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 | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 285,857 | 274,634 | 171,437 | 146,490 | 186,390 | 27.2% |
| SG&A | 7,859 | 6,613 | 5,705 | 6,493 | 6,861 | 5.7% |
| EBITDA | 134,959 | 139,201 | 90,895 | 65,594 | 97,654 | 48.9% |
| Net Income | 56,461 | 60,199 | 20,246 | 637 | 24,677 | 3,773.9% |
Balance Sheet
|
|---|
| Cash | 14,318 | 14,918 | 11,867 | 13,735 | 12,572 | -8.5% |
| Short Term Debt | 49,841 | 31,180 | 33,585 | 19,678 | 13,892 | -29.4% |
| Long Term Debt | 82,011 | 105,383 | 131,060 | 130,798 | 118,358 | -9.5% |
Cash flow
|
|---|
| Capex | 86,717 | 95,673 | 67,674 | 51,347 | 47,734 | -7.0% |
Ratios
|
|---|
| Revenue growth | 15.4% | -3.9% | -37.6% | -14.6% | 27.2% | |
| EBITDA growth | 12.4% | 3.1% | -34.7% | -27.8% | 48.9% | |
| EBITDA Margin | 47.2% | 50.7% | 53.0% | 44.8% | 52.4% | 7.6% |
| Net Income Margin | 19.8% | 21.9% | 11.8% | 0.4% | 13.2% | 12.8% |
| SG&A, % of revenue | 2.7% | 2.4% | 3.3% | 4.4% | 3.7% | -0.8% |
| CAPEX, % of revenue | 30.3% | 34.8% | 39.5% | 35.1% | 25.6% | -9.4% |
| ROIC | 18.1% | 15.8% | 3.2% | -0.6% | 7.2% | 7.8% |
| ROE | 17.3% | 16.7% | 5.3% | 0.2% | 6.5% | 6.3% |
| Net Debt/EBITDA | 0.9x | 0.9x | 1.7x | 2.1x | 1.2x | -0.9x |
Revenue and profitability
The company's Revenue jumped on 27.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 10.5% to 9.4% in 2017.
SG&A as a % of Revenue decreased slightly on 0.75 pp from 4.4% to 3.7% in 2017.
Net Income marign surged on 12.8 pp from 0.43% to 13.2% in 2017.
Capital expenditures (CAPEX) and working capital investments
In 2017 the company had CAPEX/Revenue of 25.6%. CAPEX/Revenue decreased on 9.2 pp from 34.8% in 2014 to 25.6% in 2017. It's average level of CAPEX/Revenue for the last three years was 33.4%.
Return on investment
The company operates at low ROIC (7.16%) and ROE (6.47%). ROIC increased on 7.8 pp from -0.62% to 7.2% in 2017. ROE increased on 6.3 pp from 0.17% to 6.5% in 2017.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 2.1x to 1.2x in 2017. Debt dropped on 12.1% while cash decreased on 8.5%.
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 | 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% | |
| United Energy Group Ltd ($467) | 49.0% | 27.8% | -11.5% | -25.0% | |
| |
|---|
| Median (6 companies) | 8.7% | -4.6% | -11.5% | 18.7% | |
|---|
| CNOOC Ltd ($883) | | -3.9% | -37.6% | -14.6% | 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| United Energy Group Ltd ($467) | 65.3% | 69.8% | -31.9% | 70.5% | |
| 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 (4 companies) | -0.1% | 3.5% | -10.9% | 5.0% | |
|---|
| CNOOC Ltd ($883) | 47.2% | 50.7% | 53.0% | 44.8% | 52.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| 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 (2 companies) | 5.3% | 4.1% | 5.1% | 2.4% | |
|---|
| CNOOC Ltd ($883) | 30.3% | 34.8% | 39.5% | 35.1% | 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% | |
| Sunshine Oilsands Ltd ($2012) | -2.9% | -2.3% | -31.5% | -2.0% | |
| |
|---|
| Median (7 companies) | -0.0% | -0.6% | -3.7% | 6.7% | |
|---|
| CNOOC Ltd ($883) | 18.1% | 15.8% | 3.2% | -0.6% | 7.2% |
Top companies by Net Debt / EBITDA
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| PetroAsian Energy Holdings Ltd ($850) | | | | 13.9x | |
| Shanghai Tonva Petrochemical Co Ltd ($1103) | 4.3x | 3.6x | 2.8x | 3.5x | |
| Brightoil Petroleum Holdings Ltd ($933) | | 3.1x | 2.9x | 2.6x | |
| United Energy Group Ltd ($467) | 1.1x | 0.6x | | -0.9x | |
| |
|---|
| Median (4 companies) | 1.0x | 3.2x | 2.4x | 3.0x | |
|---|
| CNOOC Ltd ($883) | 0.9x | 0.9x | 1.7x | 2.1x | 1.2x |
