Norsk Hydro Asa reports 216% Net Income growth while 6.5% Revenue decline
09 Feb 2017 • About Norsk Hydro Asa (
$NHY) • By InTwits
Norsk Hydro Asa reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Norsk Hydro Asa has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 6,913 in 2016, 5,254 in 2015, 3,294 in 2014, 2,867 in 2013, 3,256 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Norsk Hydro Asa ($NHY) key annual financial indicators
| mln. NOK | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 64,181 | 64,877 | 77,907 | 87,694 | 81,953 | -6.5% |
| EBITDA | 6,565 | 6,447 | 9,823 | 12,771 | 11,067 | -13.3% |
| Net Income | -1,318 | -920 | 797 | 2,020 | 6,388 | 216.2% |
Balance Sheet
|
|---|
| Cash | 7,034 | 8,412 | 9,253 | 6,917 | 8,037 | 16.2% |
| Short Term Debt | 5,956 | 6,220 | 6,040 | 3,562 | 3,283 | -7.8% |
| Long Term Debt | 3,674 | 3,986 | 5,127 | 3,969 | 3,397 | -14.4% |
Cash flow
|
|---|
| Capex | 3,256 | 2,867 | 3,294 | 5,254 | 6,913 | 31.6% |
Ratios
|
|---|
| Revenue growth | -10.2% | 1.1% | 20.1% | 12.6% | -6.5% | |
| EBITDA growth | -55.5% | -1.8% | 52.4% | 30.0% | -13.3% | |
| EBITDA Margin | 10.2% | 9.9% | 12.6% | 14.6% | 13.5% | -1.1% |
| Net Income Margin | -2.1% | -1.4% | 1.0% | 2.3% | 7.8% | 5.5% |
| CAPEX, % of revenue | 5.1% | 4.4% | 4.2% | 6.0% | 8.4% | 2.4% |
| ROIC | 1.1% | 2.2% | 5.9% | 8.7% | 6.6% | -2.1% |
| ROE | -1.8% | -1.3% | 1.1% | 2.7% | 8.2% | 5.5% |
| Net Debt/EBITDA | 0.4x | 0.3x | 0.2x | 0.0x | -0.1x | -0.2x |
Revenue and profitability
Norsk Hydro Asa's Revenue decreased on 6.5% in 2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 14.6% to 13.5% in 2016.
Net Income marign increased on 5.5 pp from 2.3% to 7.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Norsk Hydro Asa had CAPEX/Revenue of 8.4%. CAPEX/Revenue increased on 4.0 pp from 4.4% in 2013 to 8.4% in 2016. Average CAPEX/Revenue for the last three years was 6.2%.The company invested a big chunk of EBITDA (62.5%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (6.62%) and ROE (8.19%). ROIC decreased on 2.1 pp from 8.7% to 6.6% in 2016. ROE increased on 5.5 pp from 2.7% to 8.2% in 2016.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.048x to -0.1x in 2016. Debt dropped on 11.3% in 2016 while cash surged on 16.2% in 2016.
Appendix 1: Peers in Industrial Metals & Mining
Below we provide Norsk Hydro Asa benchmarking against other companies in Industrial Metals & Mining 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Base Resources Ltd ($BSE) | | | | 399.7% | 16.2% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 2.4% | -0.1% | 26.4% | 45.5% | |
| Afarak Group ($AFRK) | -19.2% | 5.4% | 27.4% | 8.7% | |
| Vimetco Nv ($VICO) | -13.4% | -6.5% | -12.8% | -5.3% | |
| Aluminium Bahrain Bsc ($ALBH) | | 0.8% | 9.7% | -6.7% | -12.6% |
| |
|---|
| Median (15 companies) | -0.4% | -1.4% | 0.7% | -14.2% | -7.5% |
|---|
| Norsk Hydro Asa ($NHY) | | 1.1% | 20.1% | 12.6% | -6.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.1% | 43.4% | 52.2% | 55.7% | |
| Severstal PJSC ($SVST) | 23.5% | 29.9% | 34.4% | 40.4% | 39.6% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 23.8% | 19.4% | 28.3% | 31.4% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 15.5% | 14.9% | 21.9% | 30.6% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 17.7% | 15.1% | 28.6% | 24.8% | |
| |
|---|
| Median (14 companies) | 15.5% | 15.0% | 18.7% | 17.0% | 12.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 38.6% | 29.2% | 46.8% | 47.0% | |
| Base Resources Ltd ($BSE) | | | -1.8% | 37.7% | 35.8% |
| Severstal PJSC ($SVST) | 14.9% | 19.3% | 26.4% | 32.4% | 31.2% |
| Magnitogorsk Iron & Steel Works ($MMK) | 13.1% | 14.0% | 19.5% | 28.3% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 15.6% | 13.8% | 21.8% | 24.3% | |
| |
|---|
| Median (15 companies) | 13.3% | 13.8% | 13.0% | 17.3% | 18.4% |
|---|
| Norsk Hydro Asa ($NHY) | 10.2% | 9.9% | 12.6% | 14.6% | 13.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| First Quantum Minerals ($FQM) | 46.5% | 73.2% | 81.7% | 72.5% | |
| Mmc Norilsk Nickel ($MNOD) | 22.3% | 17.1% | 10.8% | 19.0% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 7.0% | 7.9% | 9.9% | 8.1% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 12.0% | 6.9% | 5.4% | 7.7% | |
| Ezz Steel ($AEZD) | 2.3% | 3.9% | 6.4% | 6.8% | |
| |
|---|
| Median (15 companies) | 7.0% | 7.7% | 6.4% | 6.3% | 4.4% |
|---|
| Norsk Hydro Asa ($NHY) | 5.1% | 4.4% | 4.2% | 6.0% | 8.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 21.8% | 14.2% | 34.1% | 31.7% | |
| Severstal PJSC ($SVST) | 10.3% | 9.6% | 17.7% | 30.3% | 29.7% |
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | 41.7% | 56.6% | 55.8% | 26.6% | 0.9% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 6.2% | -2.7% | 25.6% | 24.4% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 1.8% | 1.4% | 9.1% | 18.1% | |
| |
|---|
| Median (15 companies) | 6.2% | 4.9% | 9.1% | 5.6% | 4.0% |
|---|
| Norsk Hydro Asa ($NHY) | 1.1% | 2.2% | 5.9% | 8.7% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vimetco Nv ($VICO) | 7.7x | | 10.9x | 14.6x | |
| Ezz Steel ($AEZD) | 4.8x | 3.6x | 19.4x | 13.3x | |
| First Quantum Minerals ($FQM) | 0.0x | 2.5x | 4.0x | 10.5x | |
| Base Resources Ltd ($BSE) | | | | 4.4x | 3.7x |
| OAO TMK ($TMKS) | 3.6x | 3.9x | 3.8x | 4.3x | |
| |
|---|
| Median (14 companies) | 2.0x | 2.1x | 1.2x | 1.1x | 0.5x |
|---|
| Norsk Hydro Asa ($NHY) | 0.4x | 0.3x | 0.2x | 0.0x | -0.1x |
