Great Eastern Shipping Co reports 56.5% CAPEX decline in 2016 while 10.8% Revenue growth
05-05-2016 • About Great Eastern Shipping Co (
$GESHIP) • By InTwits
Great Eastern Shipping Co reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Great Eastern Shipping Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 36.6%. At the same time it's a lot of higher than industry average of 11.6%.
- CAPEX is quite volatile: ₹6,751m in FY2016, ₹15,506m in FY2015, ₹6,228m in FY2014, ₹14,368m in FY2013, ₹14,979m in FY2012
- The company has business model with low profitability: ROIC is 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 10.8%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 7.3 pp from 44.7% to 52.0% in FY2016. EBITDA Margin stuck to a growing trend at 3.6 pp per annum in FY2012-FY2016.
Net Income margin increased on 5.6 pp from 22.0% to 27.5% in FY2016. Net Income margin grew at 3.7 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 17.9%. CAPEX/Revenue dropped on 30.3 pp from 48.2% in FY2013 to 17.9% in FY2016. It's average CAPEX/Revenue for the last three years was 27.9%.
Return on investment
The company operates at good ROE (13.2%) while ROIC is low (9.9%). ROIC increased on 2.8 pp from 7.1% to 9.9% in FY2016. ROE increased on 2.7 pp from 10.5% to 13.2% in FY2016. ROIC grew at 1.4 pp per annum in the last 5 years. ROE followed a growing trend at 1.8 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 2.5x. Net Debt / EBITDA dropped on 0.9x from 2.2x to 1.3x in FY2016. Debt decreased on 9.7% while cash surged on 15.2%. Net Debt/EBITDA followed a declining trend at -1.3x per annum in FY2012-FY2016.
The company has no short term refinancing risk: short term debt is zero.
Financial and operational results
Great Eastern Shipping Co ($GESHIP) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 29,343 | 29,821 | 30,492 | 34,080 | 37,748 | 10.8% |
| EBITDA | 10,897 | 11,624 | 14,357 | 15,237 | 19,642 | 28.9% |
| Net Income | 3,166 | 5,378 | 5,740 | 7,482 | 10,394 | 38.9% |
Balance Sheet
|
|---|
| Cash | 1 | 3 | 8,542 | 21,347 | 24,582 | 15.2% |
| Short Term Debt | 7,350 | 10,500 | 11,435 | 0 | 0 | |
| Long Term Debt | 56,725 | 56,894 | 49,760 | 54,626 | 49,302 | -9.7% |
Cash flow
|
|---|
| Capex | 14,979 | 14,368 | 6,228 | 15,506 | 6,751 | -56.5% |
Ratios
|
|---|
| Revenue growth | 20.6% | 1.6% | 2.3% | 11.8% | 10.8% | |
| EBITDA growth | 21.9% | 6.7% | 23.5% | 6.1% | 28.9% | |
|
|---|
| EBITDA Margin | 37.1% | 39.0% | 47.1% | 44.7% | 52.0% | 7.3% |
| Net Income Margin | 10.8% | 18.0% | 18.8% | 22.0% | 27.5% | 5.6% |
| CAPEX, % of revenue | 51.0% | 48.2% | 20.4% | 45.5% | 17.9% | -27.6% |
|
|---|
| ROIC | 4.4% | 4.5% | 6.0% | 7.1% | 9.9% | 2.8% |
| ROE | 5.3% | 8.7% | 8.8% | 10.5% | 13.2% | 2.7% |
| Net Debt/EBITDA | 5.9x | 5.8x | 3.7x | 2.2x | 1.3x | -0.9x |
Peers in Shipping
Below you can find Great Eastern Shipping Co benchmarking vs. other companies in Shipping 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shreyas Shipping & Logistics ($SHREYAS) | 42.2% | 43.6% | 25.3% | 12.0% | - |
| Global Offshore Services ($GLOBOFFS) | 14.0% | 2.9% | 52.2% | 8.5% | - |
| Shipping Corporation Of India ($SCI) | 7.8% | 8.7% | 0.0% | -0.0% | - |
| |
|---|
| Median (3 companies) | 14.0% | 8.7% | 25.3% | 8.5% | - |
|---|
| Great Eastern Shipping Co ($GESHIP) | - | 1.6% | 2.3% | 11.8% | 10.8% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Global Offshore Services ($GLOBOFFS) | 42.1% | 62.4% | 48.3% | 45.6% | - |
| Shipping Corporation Of India ($SCI) | 7.8% | 6.1% | 14.2% | 23.5% | - |
| Shreyas Shipping & Logistics ($SHREYAS) | 9.0% | 10.7% | 9.4% | 13.6% | - |
| |
|---|
| Median (3 companies) | 9.0% | 10.7% | 14.2% | 23.5% | - |
|---|
| Great Eastern Shipping Co ($GESHIP) | 37.1% | 39.0% | 47.1% | 44.7% | 52.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shipping Corporation Of India ($SCI) | 57.3% | 70.2% | 27.3% | 17.2% | - |
| Shreyas Shipping & Logistics ($SHREYAS) | 7.5% | 17.9% | 1.3% | 11.3% | - |
| Global Offshore Services ($GLOBOFFS) | 39.6% | 140.1% | 106.2% | 0.0% | - |
| |
|---|
| Median (3 companies) | 39.6% | 70.2% | 27.3% | 11.3% | - |
|---|
| Great Eastern Shipping Co ($GESHIP) | 51.0% | 48.2% | 20.4% | 45.5% | 17.9% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shreyas Shipping & Logistics ($SHREYAS) | 4.8% | 9.4% | 9.8% | 20.7% | - |
| Global Offshore Services ($GLOBOFFS) | 5.6% | 9.0% | 7.1% | 6.7% | - |
| Shipping Corporation Of India ($SCI) | -2.5% | -3.6% | -1.8% | 1.5% | - |
| |
|---|
| Median (3 companies) | 4.8% | 9.0% | 7.1% | 6.7% | - |
|---|
| Great Eastern Shipping Co ($GESHIP) | 4.4% | 4.5% | 6.0% | 7.1% | 9.9% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shipping Corporation Of India ($SCI) | 16.3x | 27.2x | 12.3x | 5.7x | - |
| Global Offshore Services ($GLOBOFFS) | 6.8x | 5.8x | 6.4x | 5.6x | - |
| Shreyas Shipping & Logistics ($SHREYAS) | 3.0x | 3.0x | 2.3x | 1.3x | - |
| |
|---|
| Median (3 companies) | 6.8x | 5.8x | 6.4x | 5.6x | - |
|---|
| Great Eastern Shipping Co ($GESHIP) | 5.9x | 5.8x | 3.7x | 2.2x | 1.3x |
