LUKOIL OAO reports 26.4% Net Income decline while 10.1% Revenue growth
04 Apr 2016 • About LUKOIL OAO (
$LKOE) • By InTwits
LUKOIL OAO reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- LUKOIL OAO is a growth stock: 2015 revenue growth was 10.1%, 5 year revenue CAGR was 14.6% at 2015 ROIC 11.2%
- LUKOIL OAO has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.8%. At the same time it's a lot of higher than industry average of 21.1%.
- CAPEX is quite volatile: 307,539 in FY2015, 496,108 in FY2014, 581,786 in FY2013, 412,991 in FY2012, 228,654 in FY2011
- The company has business model with average profitability: ROIC is at 11.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
LUKOIL OAO ($LKOE) key annual financial indicators
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,276,042 | 3,613,763 | 3,795,625 | 4,697,455 | 5,173,541 | 10.1% |
| SG&A | 112,364 | 116,643 | 122,646 | 146,550 | 168,669 | 15.1% |
| EBITDA | 518,249 | 587,161 | 509,926 | 705,386 | 816,705 | 15.8% |
| Net Income | 304,488 | 341,822 | 249,562 | 395,525 | 291,135 | -26.4% |
Balance Sheet
|
|---|
| Cash | 88,440 | 89,045 | 56,315 | 169,023 | 257,263 | 52.2% |
| Short Term Debt | 57,568 | 20,107 | 44,013 | 121,271 | 60,506 | -50.1% |
| Long Term Debt | 234,513 | 182,214 | 311,938 | 634,847 | 799,207 | 25.9% |
Cash flow
|
|---|
| Capex | 242,514 | 361,796 | 476,596 | 575,981 | 600,639 | 4.3% |
Ratios
|
|---|
| Revenue growth | 25.3% | 10.3% | 5.0% | 23.8% | 10.1% | |
| EBITDA growth | 8.8% | 13.3% | -13.2% | 38.3% | 15.8% | |
| EBITDA Margin | 15.8% | 16.2% | 13.4% | 15.0% | 15.8% | 0.8% |
| Net Income Margin | 9.3% | 9.5% | 6.6% | 8.4% | 5.6% | -2.8% |
| SG&A, % of revenue | 3.4% | 3.2% | 3.2% | 3.1% | 3.3% | 0.1% |
| CAPEX, % of revenue | 7.4% | 10.0% | 12.6% | 12.3% | 11.6% | -0.7% |
| ROIC | 17.3% | 17.3% | 11.5% | 11.6% | 11.2% | -0.4% |
| ROE | 16.3% | 15.6% | 10.3% | 14.1% | 9.3% | -4.8% |
| Net Debt/EBITDA | 0.4x | 0.2x | 0.6x | 0.8x | 0.7x | -0.1x |
Revenue and profitability
The company's Revenue surged on 10.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.3 pp from 10.9% to 15.2% in 2015.
SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 2.8 pp from 8.4% to 5.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
LUKOIL OAO's CAPEX/Revenue was 11.6% in 2015. The company showed small growth in CAPEX/Revenue of 1.6 pp from 10.0% in 2012 to 11.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 12.1%.LUKOIL OAO invested a big chunk of EBITDA (73.5%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (11.17%) and ROE (9.30%). ROIC showed almost no change in 2015. ROE decreased on 4.8 pp from 14.1% to 9.3% in 2015.
Leverage (Debt)
Debt level is 0.7x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from 0.8x to 0.7x in 2015. Debt jumped on 13.7% in 2015 while cash jumped on 52.2% in 2015.
Appendix 1: Peers in Oil & Gas Producers
Below we provide LUKOIL OAO benchmarking against other companies in Oil & Gas Producers industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 ($CAZA) | | 21.5% | 67.0% | 178.3% | -22.2% |
| Nighthawk Energy ($HAWK) | -57.5% | 75.5% | 1,533.7% | 81.8% | |
| Iofina ($IOF) | 13.4% | 17.1% | 2.9% | 29.7% | |
| |
|---|
| Median (35 companies) | 20.1% | 17.1% | 3.6% | -0.8% | -19.2% |
|---|
| LUKOIL OAO ($LKOE) | | 10.3% | 5.0% | 23.8% | 10.1% |
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 ($VGAS) | 45.5% | | | 42.9% | 12.6% |
| |
|---|
| Median (23 companies) | 16.6% | 17.7% | 20.0% | 15.1% | 11.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Eastern Energy Corp ($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) | 9.3% | 17.2% | 20.6% | 18.2% | 11.5% |
|---|
| LUKOIL OAO ($LKOE) | 15.8% | 16.2% | 13.4% | 15.0% | 15.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($JUB) | 301.5% | 322.7% | 481.7% | 208.5% | 5.9% |
| Caza Oil & Gas Inc ($CAZA) | 430.1% | 249.9% | 352.9% | 177.4% | 15.5% |
| Ithaca Energy Inc ($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% | 16.8% |
|---|
| LUKOIL OAO ($LKOE) | 7.4% | 10.0% | 12.6% | 12.3% | 11.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oil & Gas Development Co ($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% | 2.5% |
|---|
| LUKOIL OAO ($LKOE) | 17.3% | 17.3% | 11.5% | 11.6% | 11.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($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 | 0.5x | 0.7x | 1.3x | 1.8x |
|---|
| LUKOIL OAO ($LKOE) | 0.4x | 0.2x | 0.6x | 0.8x | 0.7x |
