Frontline Ltd reports 319% CAPEX growth and 104% Revenue growth
29 Feb 2016 • About Frontline Ltd (
$FRO) • By InTwits
Frontline Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 74.6% in FY2015, 64.5% in FY2014, -4.6% in FY2013, 17.2% in FY2012, 13.7% in FY2011
- Frontline Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 53.6%. At the same time it's a lot of higher than industry average of 23.4%.
- CAPEX is quite volatile: 515 in FY2015, 123 in FY2014, 1.6 in FY2013, 9.2 in FY2012, 51.4 in FY2011
- The company has highly profitable business model: ROIC is at 12.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Frontline Ltd ($FRO) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 505.3 | 365.0 | 330.8 | 146.9 | 300.4 | 104.5% |
| SG&A | 22.4 | 21.4 | 20.2 | 3.0 | 6.9 | 130.7% |
| EBITDA | 69.1 | 62.8 | -15.1 | 94.8 | 224.2 | 136.5% |
| Net Income | -330.3 | -52.2 | -120.6 | 90.8 | 101.2 | 11.5% |
Balance Sheet
|
|---|
| Cash | 103.5 | 84.7 | 32.5 | 151.3 | 179.5 | 18.6% |
| Short Term Debt | 48.6 | 32.1 | 28.3 | 28.3 | 100.0 | 253.8% |
| Long Term Debt | 935.9 | 851.2 | 725.3 | 303.9 | 809.2 | 166.3% |
Cash flow
|
|---|
| Capex | 51.4 | 9.2 | 1.6 | 122.9 | 515.0 | 319.2% |
Ratios
|
|---|
| Revenue growth | -33.0% | -27.8% | -9.4% | -55.6% | 104.5% | |
| EBITDA growth | -78.3% | -9.1% | -124.1% | -727.4% | 136.5% | |
| EBITDA Margin | 13.7% | 17.2% | -4.6% | 64.5% | 74.6% | 10.1% |
| Net Income Margin | -65.4% | -14.3% | -36.4% | 61.8% | 33.7% | -28.1% |
| SG&A, % of revenue | 4.4% | 5.9% | 6.1% | 2.0% | 2.3% | 0.3% |
| CAPEX, % of revenue | 10.2% | 2.5% | 0.5% | 83.6% | 171.4% | 87.8% |
| ROIC | -3.4% | -1.0% | -8.9% | 7.6% | 12.1% | 4.5% |
| ROE | -111.7% | -51.6% | | | 12.0% | 12.0% |
| Net Debt/EBITDA | 12.7x | 12.7x | | 1.9x | 3.3x | 1.3x |
Revenue and profitability
Frontline Ltd's Revenue jumped on 104% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 10.4% to 12.0% in FY2015.
SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign dropped on 28.1 pp from 61.8% to 33.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 171%. The company's CAPEX/Revenue surged on 169 pp from 2.5% in FY2012 to 171% in FY2015. For the last three years the average CAPEX/Revenue was 85.2%.Frontline Ltd has spent a lot to CAPEX (230% of EBITDA) to secure its growth.
Return on investment
The company operates at good ROIC (12.11%) and ROE (12.03%). ROIC increased on 4.5 pp from 7.6% to 12.1% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is 4.1x. Net Debt / EBITDA jumped on 1.3x from 1.9x to 3.3x in FY2015. Debt surged on 174% in FY2015 while cash jumped on 18.6% in FY2015.
Appendix 1: Peers in Industrial Transportation
Below you can find Frontline Ltd benchmarking vs. other companies in Industrial Transportation 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 |
|---|
| Hellenic Carriers Ltd ($HCL) | -42.3% | -60.3% | -17.0% | 88.5% | |
| Global Ports Investments ($GLPR) | 31.1% | 0.1% | -33.8% | 69.3% | |
| Zhejiang Expressway Co ($ZHEH) | 0.2% | 2.2% | 13.3% | 20.5% | |
| Yangming Marine Transport Corp ($YMTD) | -9.2% | 10.9% | -9.5% | 13.4% | |
| Dp World Ltd ($0P5M) | -6.6% | 4.8% | -1.5% | 12.7% | |
| |
|---|
| Median (14 companies) | 10.8% | 3.5% | -1.4% | 5.8% | -7.1% |
|---|
| Frontline Ltd ($FRO) | | -27.8% | -9.4% | -55.6% | 104.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Novorossiysk Commercial Sea Port ($NCSP) | 52.8% | 57.9% | 54.3% | 61.0% | |
| Global Ports Investments ($GLPR) | 52.6% | 40.3% | 58.8% | 58.8% | |
| Dp World Ltd ($0P5M) | 32.7% | 35.8% | 39.8% | 41.9% | |
| Zhejiang Expressway Co ($ZHEH) | 39.9% | 34.0% | 36.9% | 37.7% | |
| Globaltrans Investment ($GLTR) | 30.1% | 31.4% | 25.8% | 23.2% | |
| |
|---|
| Median (10 companies) | 35.0% | 30.8% | 23.0% | 21.9% | 15.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Capital Lease Aviation ($CLA) | 105.0% | 101.2% | 88.5% | 89.2% | 80.5% |
| Global Ports Investments ($GLPR) | 55.1% | 57.1% | 60.3% | 69.6% | |
| Novorossiysk Commercial Sea Port ($NCSP) | 52.7% | 48.4% | 26.8% | 58.3% | |
| Zhejiang Expressway Co ($ZHEH) | 52.8% | 49.6% | 51.1% | 53.5% | |
| Wisdom Marine Lines Co Limited ($WML) | 60.1% | 56.9% | 52.0% | 52.8% | 55.2% |
| |
|---|
| Median (14 companies) | 45.5% | 29.6% | 24.8% | 17.0% | 10.5% |
|---|
| Frontline Ltd ($FRO) | 13.7% | 17.2% | -4.6% | 64.5% | 74.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hellenic Carriers Ltd ($HCL) | 1.3% | 11.7% | 246.3% | 75.1% | |
| Dp World Ltd ($0P5M) | 15.1% | 20.6% | 33.4% | 20.7% | |
| Zhejiang Expressway Co ($ZHEH) | 6.6% | 5.3% | 3.2% | 13.4% | |
| Center Fr Cargo Cont Trf Trcnt PJSC ($TRCN) | 13.7% | 15.6% | 16.9% | 11.5% | |
| Novorossiysk Commercial Sea Port ($NCSP) | 9.1% | 5.4% | 10.4% | 9.9% | |
| |
|---|
| Median (14 companies) | 9.5% | 11.2% | 9.3% | 4.2% | 1.5% |
|---|
| Frontline Ltd ($FRO) | 10.2% | 2.5% | 0.5% | 83.6% | 171.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Novorossiysk Commercial Sea Port ($NCSP) | 18.7% | 11.0% | 4.5% | 17.1% | |
| Dx ($DX.) | 8.2% | 9.3% | 9.6% | 14.5% | 12.8% |
| Zhejiang Expressway Co ($ZHEH) | 13.3% | 11.2% | 13.3% | 13.2% | |
| Global Ports Investments ($GLPR) | 18.5% | 17.0% | 7.1% | 12.1% | |
| Center Fr Cargo Cont Trf Trcnt PJSC ($TRCN) | 18.2% | 20.2% | 17.6% | 8.8% | |
| |
|---|
| Median (14 companies) | 8.4% | 8.4% | 6.3% | 6.7% | 4.9% |
|---|
| Frontline Ltd ($FRO) | -3.4% | -1.0% | -8.9% | 7.6% | 12.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hellenic Carriers Ltd ($HCL) | 2.5x | 533.2x | 291.0x | 39.1x | |
| Yangming Marine Transport Corp ($YMTD) | | 19.7x | | 9.8x | |
| Wisdom Marine Lines Co Limited ($WML) | 7.9x | 8.5x | 9.0x | 9.1x | 8.4x |
| Evergreen Marine Corp(Taiwan) ($EGMD) | | 7.9x | 33.6x | 6.7x | 18.3x |
| Interbulk Group ($INB) | 3.5x | 3.3x | 4.1x | 3.5x | 3.6x |
| |
|---|
| Median (14 companies) | 3.1x | 3.1x | 4.1x | 2.8x | 3.4x |
|---|
| Frontline Ltd ($FRO) | 12.7x | 12.7x | | 1.9x | 3.3x |
