Global Offshore Services Net Income dropped on 125% and EBITDA Margin dropped on 16.5 pp from 45.6% to 29.0%
30-05-2016 • About Global Offshore Services (
$GLOBOFFS) • By InTwits
Global Offshore Services reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 29.0% in FY2016 vs. 45.6% in FY2015 vs. 42.1% in FY2012
- Global Offshore Services has high CAPEX intensity: 5 year average CAPEX/Revenue was 66.1%. At the same time it's a lot of higher than industry average of 18.2%.
- CAPEX is quite volatile: ₹1,635m in FY2016, ₹0m in FY2015, ₹3,733m in FY2014, ₹3,235m in FY2013, ₹889m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.1%
- It operates with high leverage: Net Debt/EBITDA is 10.4x while industry average is 6.7x
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 3.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.4 pp from 64.4% to 80.8% in FY2016. During the last 5 years EBITDA Margin topped in FY2013 at 62.4% and was declining since that time.
Net Income margin dropped on 14.7 pp from 11.6% to -3.1% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 44.6% in FY2016. Global Offshore Services's CAPEX/Revenue dropped on 95.5 pp from 140% in FY2013 to 44.6% in FY2016. Global Offshore Services has spent a lot to CAPEX (154% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (2.1%) and negative ROE (-2.4%). ROIC decreased on 4.6 pp from 6.7% to 2.1% in FY2016. ROE dropped on 12.9 pp from 10.5% to -2.4% in FY2016. During the last 5 years ROIC topped in FY2013 at 9.0% and was declining since that time.
Leverage (Debt)
Debt level is 10.4x Net Debt / EBITDA and 10.7x Debt / EBITDA. Net Debt / EBITDA surged on 4.9x from 5.6x to 10.4x in FY2016. Debt jumped on 11.4% while cash dropped on 54.4%.
Global Offshore Services has short term refinancing risk: cash is only 11.4% of short term debt.
Financial and operational results
Global Offshore Services ($GLOBOFFS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,244 | 2,309 | 3,516 | 3,814 | 3,664 | -3.9% |
| EBITDA | 944 | 1,442 | 1,697 | 1,738 | 1,064 | -38.8% |
| Net Income | 240 | 520 | 382 | 444 | -113 | -125.4% |
Balance Sheet
|
|---|
| Cash | 297 | 128 | 169 | 503 | 229 | -54.4% |
| Short Term Debt | 1,263 | 1,232 | 1,741 | 1,547 | 2,013 | 30.2% |
| Long Term Debt | 5,472 | 7,232 | 9,253 | 8,625 | 9,319 | 8.1% |
Cash flow
|
|---|
| Capex | 889 | 3,235 | 3,733 | 0 | 1,635 | |
Ratios
|
|---|
| Revenue growth | 14.0% | 2.9% | 52.2% | 8.5% | -3.9% | |
| EBITDA growth | 12.3% | 52.7% | 17.7% | 2.4% | -38.8% | |
|
|---|
| EBITDA Margin | 42.1% | 62.4% | 48.3% | 45.6% | 29.0% | -16.5% |
| Net Income Margin | 10.7% | 22.5% | 10.9% | 11.6% | -3.1% | -14.7% |
| CAPEX, % of revenue | 39.6% | 140.1% | 106.2% | 0.0% | 44.6% | |
|
|---|
| ROIC | 5.6% | 9.0% | 7.1% | 6.7% | 2.1% | -4.6% |
| ROE | 8.9% | 16.5% | 10.1% | 10.5% | -2.4% | -12.9% |
| Net Debt/EBITDA | 6.8x | 5.8x | 6.4x | 5.6x | 10.4x | 4.9x |
Peers in Shipping
Below we provide Global Offshore Services benchmarking against other companies in Shipping 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Eastern Shipping Co ($GESHIP) | - | 1.6% | 2.3% | 11.8% | 10.8% |
| Shreyas Shipping & Logistics ($SHREYAS) | - | 43.6% | 25.3% | 12.0% | 9.1% |
| Shipping Corporation Of India ($SCI) | - | 8.7% | 0.0% | -0.0% | -1.8% |
| Essar Shipping ($ESSARSHPNG) | - | 14.5% | -42.1% | 2.8% | -10.3% |
| |
|---|
| Median (4 companies) | - | 11.6% | 1.1% | 7.3% | 3.6% |
|---|
| Global Offshore Services ($GLOBOFFS) | - | 2.9% | 52.2% | 8.5% | -3.9% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Eastern Shipping Co ($GESHIP) | 37.1% | 39.0% | 47.1% | 44.7% | 52.0% |
| Shipping Corporation Of India ($SCI) | 7.8% | 6.1% | 14.2% | 23.5% | 28.3% |
| Essar Shipping ($ESSARSHPNG) | 25.3% | 25.8% | 29.6% | 14.3% | 14.0% |
| Shreyas Shipping & Logistics ($SHREYAS) | 9.0% | 10.7% | 9.4% | 13.6% | 13.0% |
| |
|---|
| Median (4 companies) | 17.1% | 18.3% | 21.9% | 18.9% | 21.2% |
|---|
| Global Offshore Services ($GLOBOFFS) | 42.1% | 62.4% | 48.3% | 45.6% | 29.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shreyas Shipping & Logistics ($SHREYAS) | 7.5% | 17.9% | 1.3% | 11.3% | 18.4% |
| Great Eastern Shipping Co ($GESHIP) | 51.0% | 48.2% | 20.4% | 45.5% | 17.9% |
| Shipping Corporation Of India ($SCI) | 57.3% | 70.2% | 27.3% | 17.2% | 9.4% |
| Essar Shipping ($ESSARSHPNG) | 8.2% | 8.2% | 1.3% | 4.9% | 0.5% |
| |
|---|
| Median (4 companies) | 29.6% | 33.1% | 10.9% | 14.3% | 13.7% |
|---|
| Global Offshore Services ($GLOBOFFS) | 39.6% | 140.1% | 106.2% | 0.0% | 44.6% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shreyas Shipping & Logistics ($SHREYAS) | 4.8% | 9.4% | 9.8% | 20.7% | 14.7% |
| Great Eastern Shipping Co ($GESHIP) | 4.4% | 4.5% | 6.0% | 7.1% | 9.9% |
| Shipping Corporation Of India ($SCI) | -2.5% | -3.6% | -1.8% | 1.5% | 4.3% |
| Essar Shipping ($ESSARSHPNG) | - | 4.1% | 0.6% | -1.3% | -2.1% |
| |
|---|
| Median (4 companies) | 4.4% | 4.3% | 3.3% | 4.3% | 7.1% |
|---|
| Global Offshore Services ($GLOBOFFS) | 5.6% | 9.0% | 7.1% | 6.7% | 2.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Essar Shipping ($ESSARSHPNG) | 7.2x | 5.8x | 10.1x | 13.3x | 15.5x |
| Shipping Corporation Of India ($SCI) | 16.3x | 27.2x | 12.3x | 5.7x | 4.0x |
| Shreyas Shipping & Logistics ($SHREYAS) | 3.0x | 3.0x | 2.3x | 1.3x | 2.5x |
| Great Eastern Shipping Co ($GESHIP) | 5.9x | 5.8x | 3.7x | 2.2x | 1.3x |
| |
|---|
| Median (4 companies) | 6.5x | 5.8x | 6.9x | 3.9x | 3.3x |
|---|
| Global Offshore Services ($GLOBOFFS) | 6.8x | 5.8x | 6.4x | 5.6x | 10.4x |
