Gulf Oil Corporation reports 35.3% Net Income decline in 2016 and 2.4 pp EBITDA Margin decline from 8.2% to 5.8%
26-05-2016 • About Gulf Oil Corporation (
$GULFOILCOR) • By InTwits
Gulf Oil Corporation reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.8% in FY2016, 8.2% in FY2015, 3.3% in FY2014, 1.8% in FY2013, 5.5% in FY2012
- Gulf Oil Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: ₹87m in FY2016, ₹75m in FY2015, ₹537m in FY2014, ₹120m in FY2013, ₹113m in FY2012
- The company has potentially unprofitable business model: ROIC is 1.0%
- It operates with high leverage: Net Debt/EBITDA is 43.4x while industry average is 28.1x
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 surged on 24.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 5.2% to 1.3% in FY2016.
Net Income margin decreased on 5.1 pp from 10.7% to 5.6% in FY2016. During FY2012-FY2016 Net Income margin topped in FY2015 at 10.7%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.8% in FY2016. Gulf Oil Corporation's CAPEX/Revenue increased slightly on 0.85 pp from 0.95% in FY2013 to 1.8% in FY2016. It's average CAPEX/Revenue for the last three years was 2.6%. During the last 5 years CAPEX as a % of Revenue topped in FY2014 at 4.1% and was declining since that time.
Return on investment
The company operates at low ROIC (1.0%) and ROE (2.6%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.3 pp from 3.9% to 2.6% in FY2016.
Leverage (Debt)
Debt level is 43.4x Net Debt / EBITDA and 44.2x Debt / EBITDA. Net Debt / EBITDA jumped on 2.0x from 41.5x to 43.4x in FY2016. Debt decreased on 6.8% while cash surged on 89.6%.
Gulf Oil Corporation has short term refinancing risk: cash is only 9.0% of short term debt.
Valuation and dividends
Gulf Oil Corporation's trades at EV/EBITDA 72.4x and P/E 30.3x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 104.7x with the industry average at 22.8x.
Management team
Ravi Jain is a Gulf Oil Corporation's CFO. Ravi Jain has spent 4 years at the company.
Financial and operational results
Gulf Oil Corporation ($GULFOILCOR) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 12,365 | 12,648 | 13,024 | 3,901 | 4,842 | 24.1% |
| EBITDA | 681 | 228 | 432 | 320 | 282 | -11.8% |
| Net Income | 482 | 502 | 677 | 416 | 269 | -35.3% |
Balance Sheet
|
|---|
| Cash | 997 | 514 | 432 | 111 | 210 | 89.6% |
| Short Term Debt | 3,497 | 3,003 | 1,927 | 2,180 | 2,341 | 7.4% |
| Long Term Debt | 300 | 17,510 | 12,542 | 11,207 | 10,134 | -9.6% |
Cash flow
|
|---|
| Capex | 113 | 120 | 537 | 75 | 87 | 16.4% |
Ratios
|
|---|
| Revenue growth | 12.0% | 2.3% | 3.0% | -70.0% | 24.1% | |
| EBITDA growth | 4.4% | -66.5% | 89.8% | -26.0% | -11.8% | |
|
|---|
| EBITDA Margin | 5.5% | 1.8% | 3.3% | 8.2% | 5.8% | -2.4% |
| Net Income Margin | 3.9% | 4.0% | 5.2% | 10.7% | 5.6% | -5.1% |
| CAPEX, % of revenue | 0.9% | 1.0% | 4.1% | 1.9% | 1.8% | -0.1% |
|
|---|
| ROIC | 4.5% | 0.2% | 0.9% | 1.1% | 1.0% | -0.1% |
| ROE | 6.4% | 4.7% | 6.1% | 3.9% | 2.6% | -1.3% |
| Net Debt/EBITDA | 4.1x | 87.8x | 32.5x | 41.5x | 43.4x | 2.0x |
Peers in Oil Marketing & Distribution
Below you can find Gulf Oil Corporation benchmarking vs. other companies in Oil Marketing & Distribution 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 |
|---|
| Sah Petroleums ($SAHPETRO) | - | -13.1% | -3.3% | 0.9% | 3.7% |
| Eastern Gases ($EASTERNGAS) | 51.5% | 54.1% | 8.5% | 0.5% | - |
| Indian Oil Corporation ($IOC) | 31.8% | 13.1% | 5.8% | -8.0% | - |
| |
|---|
| Median (3 companies) | 41.7% | 13.1% | 5.8% | 0.5% | 3.7% |
|---|
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 5.7% | 3.5% | 3.8% | 3.5% | 6.8% |
| |
|---|
| Median (1 company) | 5.5% | 3.4% | 4.0% | 3.0% | 6.8% |
|---|
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 5.8% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 0.4% | 0.2% | 0.2% | 3.9% | 2.8% |
| |
|---|
| Median (1 company) | 1.9% | 1.5% | 2.3% | 3.4% | 2.8% |
|---|
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 1.8% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | 20.0% | 10.0% | 10.9% | 7.5% | 11.8% |
| Indian Oil Corporation ($IOC) | 12.7% | 6.4% | 8.7% | 3.9% | - |
| Eastern Gases ($EASTERNGAS) | 15.4% | 15.1% | - | - | - |
| |
|---|
| Median (3 companies) | 15.4% | 10.0% | 9.8% | 5.7% | 11.8% |
|---|
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sah Petroleums ($SAHPETRO) | -0.5x | -0.8x | -1.0x | 1.9x | 3.5x |
| |
|---|
| Median (1 company) | 2.3x | 2.9x | 1.7x | 3.7x | 3.5x |
|---|
| Gulf Oil Corporation ($GULFOILCOR) | - | - | - | - | 43.4x |
