Is Novatek OAO a solid growth stock? - The numbers tells it is
04 Mar 2016 • About Novatek OAO (
$NVTK) • By InTwits
Novatek OAO is an attractive growth stock in Oil & Gas Producers industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Novatek OAO showed growth in the last financial year. Novatek OAO's revenue surged on 32.9% in FY2015. At the same time Novatek OAO well managed its profitability and also showed EBITDA growth of 10.9% for the same period.
In the last 3 years Novatek OAO showed fast revenue growth of 31.1% from 2012 to 2015 annually. EBITDA surged on 18.4% from 2012 to 2015 annually.
Novatek OAO ($NVTK) financials for the last 5 years
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 176,064 | 210,973 | 298,158 | 357,643 | 475,325 |
|---|
| Revenue growth, % | | 19.8% | 41.3% | 20.0% | 32.9% |
|---|
| SG&A, % | 4.56% | 5.03% | 3.70% | 3.31% | 3.19% |
|---|
| EBITDA | 151,083 | 96,833 | 157,429 | 144,935 | 160,710 |
|---|
| EBITDA growth, % | | -35.9% | 62.6% | -7.9% | 10.9% |
|---|
| EBITDA margin, % | 85.8% | 45.9% | 52.8% | 40.5% | 33.8% |
|---|
| Net Income | 119,655 | 69,458 | 110,006 | 37,296 | 74,396 |
|---|
| Net Income margin, % | 68.0% | 32.9% | 36.9% | 10.4% | 15.7% |
|---|
| |
| CAPEX | 25,317 | 37,378 | 51,127 | 56,233 | 42,224 |
|---|
| CAPEX/Revenue, % | 14.4% | 17.7% | 17.1% | 15.7% | 8.88% |
|---|
| Debt | 95,478 | 132,487 | 165,621 | 245,679 | 358,705 |
|---|
| Cash | 23,831 | 18,420 | 7,889 | 41,318 | 29,187 |
|---|
| Net Debt/EBITDA | 0.5x | 1.2x | 1.0x | 1.4x | 2.1x |
|---|
| |
| ROIC, % | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% |
|---|
| ROE, % | 61.7% | 26.2% | 33.3% | 9.9% | 18.4% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined noticeably from 40.5% in FY2014 to 33.8% in FY2015. If we look for the longer period Novatek OAO's EBITDA margin dropped on 12.1 pp from 45.9% in 2012 to 33.8% in 2015.
Novatek OAO shows attractive ROIC at 19.4% for the last 12 months which assumes stable development model. During the last three years it dropped - it was 21.7% in FY2012. It's average ROIC for the last three years was 23.2%.
Net Income margin surged on 5.30 pp from 10.4% to 15.7% in 2015. If we look for the longer period Novatek OAO's Net Income margin dropped on 17.2 pp from 32.9% in 2012 to 15.7% in 2015.
Novatek OAO operates at ROE of 18.4%. For the last three years the average ROE was 20.5%.
Capital expenditures (CAPEX)
To fuel this fast growth Novatek OAO had to invest in CAPEX.The company's CAPEX/Revenue was 8.88% in FY2015. The company showed big decline in CAPEX/Revenue of 8.83 pp from 17.7% in 2012 to 8.88% in 2015. For the last three years the average CAPEX/Revenue was 13.9%.
Leverage (Debt)
Having such a fast growth profile Novatek OAO keeps medium debt level at 2.1x Net Debt/EBITDA. In the last 3 years Novatek OAO showed fast leverage growth of 0.87x from 1.18x in 2012 to 2.05x in 2015.
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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($VGAS) | 45.5% | | | 42.9% | |
| |
|---|
| Median (23 companies) | 16.6% | 17.7% | 20.0% | 15.1% | 9.5% |
|---|
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Great Eastern Energy Corp ($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 ($NVTK) | 85.8% | 45.9% | 52.8% | 40.5% | 33.8% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jubilant Energy N.V. ($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 ($NVTK) | 14.4% | 17.7% | 17.1% | 15.7% | 8.9% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Oil & Gas Development Co ($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 ($NVTK) | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jubilant Energy N.V. ($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 |
