Novatek OAO reports 99.5% Net Income growth while 6.7 pp EBITDA Margin decline from 40.5% to 33.8%
26 Feb 2016 • About Novatek OAO (
$NVTK) • By InTwits
Novatek OAO reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Novatek OAO is a fast growth stock: 2015 revenue growth was 32.9%, 5 year revenue CAGR was 32.4% at 2015 ROIC 19.4%
- EBITDA Margin is quite volatile: 33.8% in 2015, 40.5% in 2014, 52.8% in 2013, 45.9% in 2012, 85.8% in 2011
- Novatek OAO has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.8%. At the same time it's a lot of higher than industry average of 4.8%.
- CAPEX is quite volatile: 11,272 in 2015, 6,963 in 2014, 3,257 in 2013, 2,245 in 2012, 4,786 in 2011
- The company has highly profitable business model: ROIC is at 19.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Novatek OAO ($NVTK) key annual financial indicators
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 176,064 | 210,973 | 298,158 | 357,643 | 475,325 | 32.9% |
| SG&A | 8,020 | 10,622 | 11,029 | 11,831 | 15,163 | 28.2% |
| EBITDA | 151,083 | 96,833 | 157,429 | 144,935 | 160,710 | 10.9% |
| Net Income | 119,655 | 69,458 | 110,006 | 37,296 | 74,396 | 99.5% |
Balance Sheet
|
|---|
| Cash | 23,831 | 18,420 | 7,889 | 41,318 | 29,187 | -29.4% |
| Short Term Debt | 20,298 | 34,682 | 24,026 | 40,980 | 106,655 | 160.3% |
| Long Term Debt | 75,180 | 97,805 | 141,595 | 204,699 | 252,050 | 23.1% |
Cash flow
|
|---|
| Capex | 25,317 | 37,378 | 51,127 | 56,233 | 42,224 | -24.9% |
Ratios
|
|---|
| Revenue growth | 50.5% | 19.8% | 41.3% | 20.0% | 32.9% | |
| EBITDA growth | 165.1% | -35.9% | 62.6% | -7.9% | 10.9% | |
| EBITDA Margin | 85.8% | 45.9% | 52.8% | 40.5% | 33.8% | -6.7% |
| Net Income Margin | 68.0% | 32.9% | 36.9% | 10.4% | 15.7% | 5.2% |
| SG&A, % of revenue | 4.6% | 5.0% | 3.7% | 3.3% | 3.2% | -0.1% |
| CAPEX, % of revenue | 14.4% | 17.7% | 17.1% | 15.7% | 8.9% | -6.8% |
| ROIC | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% | -1.8% |
| ROE | 61.7% | 26.2% | 33.3% | 9.9% | 18.4% | 8.5% |
| Net Debt/EBITDA | 0.5x | 1.2x | 1.0x | 1.4x | 2.1x | 0.6x |
Revenue and profitability
Novatek OAO's Revenue jumped on 32.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from -7.1% to -9.2% in 2015.
SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 5.2 pp from 10.4% to 15.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 8.9%. CAPEX/Revenue decreased on 8.8 pp from 17.7% in 2012 to 8.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 13.9%.
Return on investment
The company operates at good ROIC (19.43%) and ROE (18.35%). ROIC decreased slightly on 1.8 pp from 21.2% to 19.4% in 2015. ROE increased on 8.5 pp from 9.9% to 18.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.1x and Debt / EBITDA is 2.2x. Net Debt / EBITDA surged on 0.6x from 1.4x to 2.1x in 2015. Debt surged on 46.0% in 2015 while cash dropped on 29.4% in 2015.
Appendix 1: 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cadogan Petroleum ($CAD) | 38.9% | -46.1% | 0.3% | 764.9% | |
| Parkmead Group(The) ($PMG) | | -21.3% | 38.0% | 505.8% | -24.4% |
| Caza Oil & Gas Inc ($CAZA) | 83.1% | 21.5% | 67.0% | 178.3% | |
| Nighthawk Energy ($HAWK) | -57.5% | 75.5% | 1,533.7% | 81.8% | |
| Iofina ($IOF) | 13.4% | 17.1% | 2.9% | 29.7% | |
| |
|---|
| Median (35 companies) | 30.5% | 12.8% | 3.6% | -0.8% | -19.1% |
|---|
| Novatek OAO ($NVTK) | | 19.8% | 41.3% | 20.0% | 32.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bankers Petroleum Ltd ($BNK) | 77.9% | 77.5% | 81.1% | 80.8% | |
| Oil & Gas Development Co ($OGDC) | 66.0% | 69.9% | 70.9% | 68.5% | 62.7% |
| Nighthawk Energy ($HAWK) | 14.5% | 38.8% | 66.8% | 58.1% | |
| Tethys Petroleum Limited ($TPL) | -4.2% | 14.7% | 28.9% | 46.2% | |
| Volga Gas ($VGAS) | 45.5% | | | 42.9% | |
| |
|---|
| Median (23 companies) | 16.6% | 17.7% | 20.0% | 15.1% | 9.5% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Eastern Energy Corp ($GEEC) | 48.7% | 61.2% | 64.1% | 70.4% | 66.5% |
| Oil & Gas Development Co ($OGDC) | 67.6% | 73.7% | 65.9% | 69.3% | 62.4% |
| Bankers Petroleum Ltd ($BNK) | 51.4% | 53.3% | 59.4% | 68.3% | |
| Jubilant Energy N.V. ($JUB) | -250.4% | 23.7% | 60.9% | 67.6% | 28.7% |
| Nighthawk Energy ($HAWK) | -358.5% | -80.7% | 72.2% | 57.7% | |
| |
|---|
| Median (36 companies) | 9.3% | 16.2% | 17.4% | 15.9% | 11.5% |
|---|
| Novatek OAO ($NVTK) | 85.8% | 45.9% | 52.8% | 40.5% | 33.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($JUB) | 301.5% | 322.7% | 481.7% | 208.5% | 5.9% |
| Caza Oil & Gas Inc ($CAZA) | 430.1% | 249.9% | 352.9% | 177.4% | |
| Ithaca Energy Inc ($IAE) | 160.2% | 95.1% | 83.4% | 103.5% | |
| Tethys Petroleum Limited ($TPL) | 182.8% | 52.0% | 64.4% | 95.2% | |
| Ruspetro ($RPO) | 83.5% | 139.8% | 55.2% | 77.2% | |
| |
|---|
| Median (37 companies) | 14.1% | 17.5% | 24.6% | 17.2% | 16.8% |
|---|
| Novatek OAO ($NVTK) | 14.4% | 17.7% | 17.1% | 15.7% | 8.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oil & Gas Development Co ($OGDC) | 41.2% | 46.7% | 40.4% | 39.7% | 24.3% |
| Haike Chemical Group Ltd ($HAIK) | 7.7% | 0.7% | 1.0% | 31.4% | |
| Nighthawk Energy ($HAWK) | -5.1% | -3.9% | 19.6% | 23.1% | |
| Bankers Petroleum Ltd ($BNK) | 19.7% | 17.4% | 20.8% | 20.8% | |
| AO Tatneft ($ATAD) | | 19.2% | 19.1% | 17.8% | 19.7% |
| |
|---|
| Median (38 companies) | 5.4% | 4.6% | 5.8% | 5.3% | 2.5% |
|---|
| Novatek OAO ($NVTK) | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($JUB) | | 77.9x | 38.8x | 44.6x | 192.7x |
| Ruspetro ($RPO) | | 369.1x | 34.8x | 27.9x | |
| Bg Group ($BG.) | 1.2x | 1.3x | 1.7x | 11.7x | 1.5x |
| President Energy ($PPC) | | | | 9.9x | |
| Edge Resources Inc ($EDG) | | | | 8.0x | 7.6x |
| |
|---|
| Median (27 companies) | 0.5x | 0.4x | 0.7x | 1.3x | 1.8x |
|---|
| Novatek OAO ($NVTK) | 0.5x | 1.2x | 1.0x | 1.4x | 2.1x |
