Novatek OAO demonstrates fast growth in fundamentals
06 Mar 2015 • About Novatek OAO (
$NVTK) • By InTwits
Novatek OAO is an attractive growth stock in Oil & Gas Producers industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Novatek OAO showed fast growth in the last financial year. Novatek OAO's revenue surged on 20.0% in FY2014. The growth also happened in EBITDA of -7.94% for the same period.
In the longer period the company showed fast revenue growth of 26.6% from 2011 to 2014 annually. EBITDA decreased slightly on 1.38% from 2011 to 2014 annually.
Novatek OAO ($NVTK) financials for the last 5 years
| mln. RUB | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 117,024 | 176,064 | 210,973 | 298,158 | 357,643 |
|---|
| Revenue growth, % | | 50.5% | 19.8% | 41.3% | 20.0% |
|---|
| SG&A, % | 5.63% | 4.56% | 5.03% | 3.70% | 3.31% |
|---|
| EBITDA | 56,988 | 151,083 | 96,833 | 157,429 | 144,935 |
|---|
| EBITDA growth, % | | 165.1% | -35.9% | 62.6% | -7.9% |
|---|
| EBITDA margin, % | 48.7% | 85.8% | 45.9% | 52.8% | 40.5% |
|---|
| Net Income | 40,533 | 119,655 | 69,458 | 110,006 | 37,296 |
|---|
| Net Income margin, % | 34.6% | 68.0% | 32.9% | 36.9% | 10.4% |
|---|
| |
| CAPEX | 21,436 | 25,317 | 37,378 | 51,127 | 56,233 |
|---|
| CAPEX/Revenue, % | 18.3% | 14.4% | 17.7% | 17.1% | 15.7% |
|---|
| Debt | 72,226 | 95,478 | 132,487 | 165,621 | 245,679 |
|---|
| Cash | 10,238 | 23,831 | 18,420 | 7,889 | 41,318 |
|---|
| Net Debt/EBITDA | 1.1x | 0.5x | 1.2x | 1.0x | 1.4x |
|---|
| |
| ROIC, % | 23.5% | 47.4% | 21.7% | 29.0% | 21.2% |
|---|
| ROE, % | 31.0% | 61.7% | 26.2% | 33.3% | 9.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period EBITDA margin dropped on 45.3 pp from 85.8% in 2011 to 40.5% in 2014.
We call Novatek OAO an attractive growth stock as together with the growth it delivers high ROIC at 21.2%. During the last three years it dropped - it was 47.4% in FY2011. It's average level of ROIC for the last three years was 24.0%.
Net Income margin dropped on 26.5 pp from 36.9% to 10.4% in 2014. If we look for the longer period Novatek OAO showed big decline in Net Income margin of 57.6 pp from 68% in 2011 to 10.4% in 2014.
Novatek OAO operates at ROE of 9.88%. Average ROE for the last three years was 23.1%.
Capital expenditures (CAPEX)
To fuel this fast growth Novatek OAO had to invest in CAPEX.The company's CAPEX/Revenue was 15.7% in FY2014. Novatek OAO's CAPEX/Revenue increased on 1.34 pp from 14.4% in 2011 to 15.7% in 2014. For the last three years the average CAPEX/Revenue was 16.9%.
Leverage (Debt)
Novatek OAO has medium debt level at 1.4x Net Debt/EBITDA to maintain high growth. If we look for the longer period Novatek OAO showed fast leverage growth of 0.94x from 0.47x in 2011 to 1.41x in 2014.
Peers in Oil & Gas Producers
Below you can find Novatek OAO benchmarking vs. other companies in Oil & Gas Producers 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Parkmead Group(The) ($PMG) | | 58.4% | -21.3% | 38.0% | 505.8% |
| Great Eastern Energy Corp ($GEEC) | | 443.0% | 73.9% | 24.7% | 16.0% |
| Oil & Gas Development Co ($OGDC) | | 9.2% | 27.1% | 12.9% | 15.1% |
| Edge Resources Inc ($EDG) | | | 472.1% | 45.4% | 10.0% |
| Gazprom OAO ($OGZD) | | | | 10.1% | 6.5% |
| |
|---|
| Median (13 companies) | | 22.5% | 12.5% | 2.5% | 0.5% |
|---|
| Novatek OAO ($NVTK) | | 50.5% | 19.8% | 41.3% | 20.0% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Oil & Gas Development Co ($OGDC) | 70.6% | 66.0% | 69.9% | 70.9% | 68.5% |
| Royal Dutch Shell ($RDSB) | 16.4% | 15.7% | 15.2% | 15.4% | 15.1% |
| Parkmead Group(The) ($PMG) | 34.5% | 46.2% | 51.3% | 39.7% | 13.1% |
| BP ($BP.A) | 5.5% | 17.5% | 13.1% | 14.0% | 12.5% |
| Hellenic Petroleum Sa ($HLPD) | 9.6% | 7.0% | 5.4% | 3.2% | 1.5% |
| |
|---|
| Median (6 companies) | 16.4% | 46.2% | 14.2% | 16.3% | 12.8% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Great Eastern Energy Corp ($GEEC) | -61.5% | 48.7% | 61.2% | 64.1% | 70.4% |
| Oil & Gas Development Co ($OGDC) | 69.8% | 67.6% | 73.7% | 65.9% | 69.3% |
| Jubilant Energy N.V. ($JUB) | -266.4% | -250.4% | 23.7% | 60.9% | 67.6% |
| Gazprom OAO ($OGZD) | | | 35.6% | 38.2% | 31.9% |
| AO Tatneft ($ATAD) | | | 26.9% | 27.2% | 26.8% |
| |
|---|
| Median (13 companies) | 3.3% | 11.8% | 17.2% | 15.8% | 24.7% |
|---|
| Novatek OAO ($NVTK) | 48.7% | 85.8% | 45.9% | 52.8% | 40.5% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Jubilant Energy N.V. ($JUB) | 924.8% | 301.5% | 322.7% | 481.7% | 208.5% |
| Great Eastern Energy Corp ($GEEC) | 1,086.8% | 198.8% | 176.2% | 108.3% | 63.4% |
| Edge Resources Inc ($EDG) | | 1,491.8% | 303.0% | 75.0% | 44.6% |
| Bg Group ($BG.) | 48.9% | 58.3% | 52.7% | 55.3% | 44.1% |
| Parkmead Group(The) ($PMG) | 0.9% | 2.9% | 6.4% | 85.4% | 39.8% |
| |
|---|
| Median (13 companies) | 13.4% | 11.6% | 11.4% | 26.6% | 22.1% |
|---|
| Novatek OAO ($NVTK) | 18.3% | 14.4% | 17.7% | 17.1% | 15.7% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Oil & Gas Development Co ($OGDC) | 54.1% | 41.2% | 46.7% | 40.4% | 39.7% |
| AO Tatneft ($ATAD) | | | 19.2% | 19.1% | 17.8% |
| Great Eastern Energy Corp ($GEEC) | -2.9% | 2.9% | 7.1% | 8.9% | 10.7% |
| Gazprom OAO ($OGZD) | | | 13.4% | 14.2% | 10.3% |
| Royal Dutch Shell ($RDSB) | 13.6% | 20.3% | 17.2% | 11.9% | 8.8% |
| |
|---|
| Median (13 companies) | 2.1% | 9.7% | 8.0% | 8.9% | 1.7% |
|---|
| Novatek OAO ($NVTK) | 23.5% | 47.4% | 21.7% | 29.0% | 21.2% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Jubilant Energy N.V. ($JUB) | | | 77.9x | 38.8x | 44.6x |
| Bg Group ($BG.) | 0.9x | 1.2x | 1.3x | 1.7x | 11.7x |
| Edge Resources Inc ($EDG) | | | | | 8.0x |
| Great Eastern Energy Corp ($GEEC) | | 10.7x | 6.0x | 5.6x | 4.8x |
| Total Sa ($TTA) | 0.6x | 0.6x | 0.6x | 0.7x | 1.4x |
| |
|---|
| Median (11 companies) | 0.8x | 0.7x | 0.9x | 0.7x | 1.3x |
|---|
| Novatek OAO ($NVTK) | 1.1x | 0.5x | 1.2x | 1.0x | 1.4x |
