China Petroleum & Chemical Corp reports 35.9% revenue decline in 2015 and 2.7 pp EBITDA Margin growth from 5.9% to 8.6%
29 Mar 2016 • About China Petroleum & Chemical Corp (
$SNP) • By InTwits
China Petroleum & Chemical Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Petroleum & Chemical Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 45,972 in 2015, 23,834 in 2014, 18,674 in 2013, 29,919 in 2012, 57,381 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Petroleum & Chemical Corp ($SNP) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,463,767 | 2,733,618 | 2,833,247 | 2,781,641 | 1,784,026 | -35.9% |
| SG&A | 58,909 | 61,130 | 69,892 | 68,330 | 62,545 | -8.5% |
| EBITDA | 169,346 | 169,118 | 178,050 | 163,584 | 153,396 | -6.2% |
| Net Income | 73,225 | 63,879 | 66,132 | 46,466 | 32,281 | -30.5% |
Balance Sheet
|
|---|
| Cash | 25,197 | 10,864 | 15,101 | 10,100 | 43,553 | 331.2% |
| Short Term Debt | 80,373 | 115,982 | 163,870 | 178,148 | 119,572 | -32.9% |
| Long Term Debt | 154,457 | 162,116 | 145,590 | 150,932 | 139,746 | -7.4% |
Cash flow
|
|---|
| Capex | 142,254 | 157,066 | 154,946 | 124,381 | 102,657 | -17.5% |
Ratios
|
|---|
| Revenue growth | 31.3% | 11.0% | 3.6% | -1.8% | -35.9% | |
| EBITDA growth | 3.1% | -0.1% | 5.3% | -8.1% | -6.2% | |
| EBITDA Margin | 6.9% | 6.2% | 6.3% | 5.9% | 8.6% | 2.7% |
| Net Income Margin | 3.0% | 2.3% | 2.3% | 1.7% | 1.8% | 0.1% |
| SG&A, % of revenue | 2.4% | 2.2% | 2.5% | 2.5% | 3.5% | 1.0% |
| CAPEX, % of revenue | 5.8% | 5.7% | 5.5% | 4.5% | 5.8% | 1.3% |
| ROIC | 14.2% | 11.9% | 10.6% | 7.5% | 5.5% | -2.0% |
| ROE | 16.4% | 13.0% | 12.2% | 8.0% | 5.1% | -2.9% |
| Net Debt/EBITDA | 1.2x | 1.6x | 1.7x | 1.9x | 1.4x | -0.5x |
Revenue and profitability
China Petroleum & Chemical Corp's Revenue dropped on 35.9% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.7 pp from 5.9% to 8.6% in 2015.
SG&A as a % of Revenue increased slightly on 1.0 pp from 2.5% to 3.5% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.8% in 2015. CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 5.2%.Battling declining revenue the company invested a large share of EBITDA (66.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (5.49%) and ROE (5.12%). ROIC decreased slightly on 2.0 pp from 7.5% to 5.5% in 2015. ROE decreased on 2.9 pp from 8.0% to 5.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is 1.7x. Net Debt / EBITDA dropped on 0.5x from 1.9x to 1.4x in 2015. Debt dropped on 21.2% in 2015 while cash surged on 331% in 2015.
Appendix 1: Peers in Oil & Gas Producers
Below you can find China Petroleum & Chemical Corp 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 ($IOF) | 13.4% | 17.1% | 2.9% | 29.7% | |
| |
|---|
| Median (35 companies) | 28.7% | 17.1% | 4.3% | 0.5% | -19.1% |
|---|
| China Petroleum & Chemical Corp ($SNP) | | 11.0% | 3.6% | -1.8% | -35.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bankers Petroleum Ltd ($BNK) | 77.9% | 77.5% | 81.1% | 80.8% | 72.2% |
| Oil & Gas Development Co ($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% | -76.0% |
| 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% | 38.5% |
| 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) | 11.8% | 17.2% | 20.6% | 18.2% | 11.5% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 6.9% | 6.2% | 6.3% | 5.9% | 8.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($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% | 42.8% |
| Tethys Petroleum Limited ($TPL) | 182.8% | 52.0% | 64.4% | 95.2% | 37.5% |
| Ruspetro ($RPO) | 83.5% | 139.8% | 55.2% | 77.2% | |
| |
|---|
| Median (37 companies) | 14.6% | 17.7% | 24.6% | 17.2% | 17.5% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 5.8% | 5.7% | 5.5% | 4.5% | 5.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oil & Gas Development Co ($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% | |
| Novatek OAO ($NVTK) | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% |
| Bankers Petroleum Ltd ($BNK) | 19.7% | 17.4% | 20.8% | 20.8% | -0.2% |
| |
|---|
| Median (38 companies) | 5.4% | 4.6% | 5.8% | 5.3% | 0.2% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 14.2% | 11.9% | 10.6% | 7.5% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($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 | 1.9x |
|---|
| China Petroleum & Chemical Corp ($SNP) | 1.2x | 1.6x | 1.7x | 1.9x | 1.4x |
