Century Enka reports 34.5% EBITDA decline and 16.9% Revenue decline
05-05-2015 • About Century Enka (
$CENTENKA) • By InTwits
Century Enka reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Century Enka is a company in decline: FY2015 revenue growth was -16.9%, 5 years revenue CAGR was -3.2%
- Century Enka has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.3%. At the same time it's a lot of higher than industry average of 2.2%.
- CAPEX is quite volatile: 555 in FY2015, 386 in FY2014, 241 in FY2013, 488 in FY2012, 1,985 in FY2011
- The company has business model with low profitability: ROIC is at 7.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Century Enka ($CENTENKA) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,491 | 16,495 | 15,522 | 14,668 | 12,185 | -16.9% |
| EBITDA | 1,736 | 814 | 1,378 | 1,814 | 1,188 | -34.5% |
| Net Income | 794 | 88 | 219 | 629 | 366 | -41.9% |
Balance Sheet
|
|---|
| Cash | 93 | 40 | 34 | 49 | 42 | -14.0% |
| Short Term Debt | 2,569 | 2,074 | 2,096 | 1,466 | 869 | -40.7% |
| Long Term Debt | 1,495 | 1,450 | 671 | 482 | 652 | 35.3% |
Cash flow
|
|---|
| Capex | 1,985 | 488 | 241 | 386 | 555 | 43.7% |
Ratios
|
|---|
| Revenue growth | -5.7% | 22.3% | -5.9% | -5.5% | -16.9% | |
| EBITDA growth | -21.3% | -53.1% | 69.2% | 31.7% | -34.5% | |
| EBITDA Margin | 12.9% | 4.9% | 8.9% | 12.4% | 9.8% | -2.6% |
| Net Income Margin | 5.9% | 0.5% | 1.4% | 4.3% | 3.0% | -1.3% |
| CAPEX, % of revenue | 14.7% | 3.0% | 1.6% | 2.6% | 4.6% | 1.9% |
| ROIC | 10.8% | 1.2% | 6.1% | 10.9% | 7.7% | -3.2% |
| ROE | 12.9% | 1.4% | 3.4% | 9.3% | 5.2% | -4.1% |
| Net Debt/EBITDA | 2.3x | 4.3x | 2.0x | 1.0x | 1.2x | 0.2x |
Revenue and profitability
The company's Revenue dropped on 16.9% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.9 pp from 6.8% to 14.6% in FY2015.
Net Income marign decreased slightly on 1.3 pp from 4.3% to 3.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Century Enka had CAPEX/Revenue of 4.6%. CAPEX/Revenue increased slightly on 1.6 pp from 3.0% in FY2012 to 4.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.9%.
Return on investment
The company operates at low ROIC (7.74%) and ROE (5.16%). ROIC decreased on 3.2 pp from 10.9% to 7.7% in FY2015. ROE decreased on 4.1 pp from 9.3% to 5.2% in FY2015.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.3x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 1.0x to 1.2x in FY2015. Debt dropped on 21.9% in FY2015 while cash dropped on 14.0% in FY2015.
Appendix 1: Peers in Textiles
Below we provide Century Enka benchmarking against other companies in Textiles 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Industries ($OLYMPTX) | -99.6% | -58.0% | -96.6% | 74,809.1% | |
| Gujarat Cotex ($GUJCOTEX) | 625.9% | -6.2% | -66.0% | 176.2% | |
| T T ($TTL) | -39.2% | -21.8% | 28.7% | 47.8% | |
| Filatex India ($FILATEX) | -74.3% | -2.7% | 158.7% | 44.5% | |
| Gtn Textiles ($GTNTEX) | -27.7% | -8.8% | 51.2% | 39.4% | |
| |
|---|
| Median (73 companies) | -32.1% | 4.8% | 10.0% | 14.4% | 7.7% |
|---|
| Century Enka ($CENTENKA) | | 22.3% | -5.9% | -5.5% | -16.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ruby Mills ($RUBYMILLS) | 25.2% | 28.3% | 25.1% | 28.6% | |
| Vardhman Textiles ($VTL) | 24.9% | 13.8% | 20.1% | 24.3% | |
| Welspun India ($WELSPUNIND) | 13.3% | 12.2% | 16.8% | 22.6% | 24.1% |
| Nitin Spinners ($NITINSPIN) | 23.7% | 10.5% | 19.7% | 19.3% | 17.0% |
| Shri Dinesh Mills ($SHRIDINE) | 24.7% | 22.4% | 18.5% | 18.7% | |
| |
|---|
| Median (53 companies) | 12.7% | 6.5% | 9.5% | 9.5% | 14.2% |
|---|
| Century Enka ($CENTENKA) | 12.9% | 4.9% | 8.9% | 12.4% | 9.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Worldwide ($JINDWORLD) | 3.6% | 3.0% | 10.5% | 20.7% | |
| SRF ($SRF) | 0.0% | 0.0% | 18.7% | 20.0% | |
| Welspun India ($WELSPUNIND) | 11.3% | 5.6% | 7.8% | 16.4% | 10.9% |
| Sel Manufacturing Company ($SELMCL) | 54.2% | 53.9% | 25.1% | 14.0% | |
| Grasim Industries ($GRASIM) | 7.8% | 17.7% | 21.7% | 11.6% | 10.2% |
| |
|---|
| Median (20 companies) | 4.5% | 3.4% | 5.9% | 7.4% | 10.2% |
|---|
| Century Enka ($CENTENKA) | 14.7% | 3.0% | 1.6% | 2.6% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nitin Spinners ($NITINSPIN) | 13.8% | 6.0% | 19.5% | 21.5% | 17.5% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 16.0% | 9.5% | 13.6% | 19.8% | |
| Vardhman Textiles ($VTL) | 15.5% | 6.6% | 11.9% | 17.3% | |
| Maral Overseas ($MARALOVER) | | 4.6% | 14.1% | 16.0% | |
| Rswm ($RSWM) | 17.4% | 2.2% | 15.2% | 15.5% | |
| |
|---|
| Median (126 companies) | 10.1% | 3.6% | 9.3% | 8.9% | 12.8% |
|---|
| Century Enka ($CENTENKA) | 10.8% | 1.2% | 6.1% | 10.9% | 7.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jaybharat Textiles & Real Estate ($JAYTEX) | 8.4x | 10.9x | 53.6x | 23.8x | |
| Sree Jayalakshmi Autospin ($SREEJAYA) | 3.4x | | 9.7x | 12.8x | |
| Bombay Rayon Fashions ($BRFL) | 5.9x | 4.9x | 4.9x | 11.6x | |
| Sel Manufacturing Company ($SELMCL) | 5.6x | 9.4x | 6.6x | 11.5x | |
| Ruby Mills ($RUBYMILLS) | 15.9x | 12.6x | 15.3x | 10.8x | |
| |
|---|
| Median (69 companies) | 3.9x | 3.8x | 3.2x | 0.0x | 2.3x |
|---|
| Century Enka ($CENTENKA) | 2.3x | 4.3x | 2.0x | 1.0x | 1.2x |
