NWS Holdings Ltd reports 80.3% Net Income decline in 2020 and 3.4% Revenue decline 30/09/2020
• About NWS Holdings Ltd ($659
) • By InTwits
NWS Holdings Ltd reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 3.9% in FY2020, 13.9% in FY2019, 17.6% in FY2018, 14.2% in FY2017, 17.1% in FY2016
- The company has unprofitable business model: ROIC is -0.5%
- It operates with high leverage: Net Debt/EBITDA is 19.3x while industry average is 6.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 3.4%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 10.0 pp from 13.9% to 3.9% in FY2020.
Gross Margin decreased slightly on 1.6 pp from 11.3% to 9.7% in FY2020. SG&A as a % of Revenue increased on 4.5 pp from 5.3% to 9.8% in FY2020. SG&A as a % of Revenue followed a growing trend in the last 5 years.
Net Income margin dropped on 12.5 pp from 15.8% to 3.2% in FY2020. During the last 5 years Net Income margin topped in FY2017 at 17.9% and was declining since that time.
Return on investment
The company operates at negative ROIC (-0.5%) and low but positive ROE (0.4%). ROIC decreased on 3.7 pp from 3.3% to -0.46% in FY2020. ROE decreased on 7.1 pp from 7.6% to 0.44% in FY2020. During FY2016-FY2020 ROE topped in FY2018 at 12.3% and was declining since that time.
Debt level is 19.3x Net Debt / EBITDA and 32.2x Debt / EBITDA. Net Debt / EBITDA jumped on 19.3x from 0.0064x to 19.3x in FY2020. Debt jumped on 118% while cash dropped on 12.1%. During FY2016-FY2020 Net Debt/EBITDA bottomed in FY2019 at 0.0064x.
NWS Holdings Ltd has no short term refinancing risk: cash is higher than short term debt (297.7%).
Valuation and dividends
The company's trades at EV/EBITDA 43.1x and P/E 29.1x.
NWS Holdings Ltd's CEO is Ma Siu-Cheung "Eric". Ma Siu-Cheung "Eric" has 1 year tenure with the company.
Financial and operational resultsNWS Holdings Ltd ($659) key annual financial indicators
|Short Term Debt||5,813||306||1,035||2,403||4,441||84.8%|
|Long Term Debt||9,252||9,377||9,140||12,666||28,467||124.7%|
|SG&A, % of revenue||3.7%||4.1%||4.2%||5.3%||9.8%||4.5%|
|Net Income Margin||16.7%||17.9%||17.3%||15.8%||3.2%||-12.5%|
|CAPEX, % of revenue||1.9%||2.2%||0.0%||0.0%|
Peers in Holding Companies-Divers
Below we provide NWS Holdings Ltd benchmarking against other companies in Holding Companies-Divers 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.