Hagl JSC Net Income dropped on 303% in 2016 and EBITDA Margin dropped on 11.7 pp from 28.2% to 16.5%
17 Feb 2017 • About Hagl JSC (
$HAG) • By InTwits
Hagl JSC reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hagl JSC doesn't have a profitable business model yet: FY2016 ROIC is 0.8%
- EBITDA Margin is declining: 16.5% in FY2016 vs. 28.2% in FY2015 vs. 23.1% in FY2012
- EBITDA Margin is quite volatile: 16.5% in FY2016, 28.2% in FY2015, 39.6% in FY2014, 40.5% in FY2013, 23.1% in FY2012
- Hagl JSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 128.6%. At the same time it's a lot of higher than industry average of 18.0%.
- CAPEX is quite volatile: 2,324,112 in 2016, 2,560,244 in 2015, 3,505,549 in 2014, 6,569,613 in 2013, 7,054,543 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.8%
- It operates with high leverage: Net Debt/EBITDA is 25.0x while industry average is 10.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hagl JSC ($HAG) key annual financial indicators
| mln. VND | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,394,478 | 2,771,219 | 3,054,331 | 6,252,447 | 6,454,475 | 3.2% |
| Gross Profit | 1,200,566 | 1,196,126 | 1,226,993 | 1,854,426 | 1,000,184 | -46.1% |
| SG&A | 411,588 | 400,299 | 351,119 | 461,611 | 637,389 | 38.1% |
| EBITDA | 1,013,641 | 1,122,276 | 1,210,055 | 1,765,407 | 1,064,162 | -39.7% |
| Net Income | 349,964 | 846,072 | 1,453,000 | 502,343 | -1,020,040 | -303.1% |
Balance Sheet
|
|---|
| Cash | 2,518,419 | 2,448,256 | 978,414 | 967,967 | 794,085 | -18.0% |
| Short Term Debt | 2,517,412 | 3,129,670 | 6,839,583 | 8,297,755 | 6,572,321 | -20.8% |
| Long Term Debt | 13,614,099 | 11,128,674 | 11,286,990 | 18,801,460 | 20,794,258 | 10.6% |
Cash flow
|
|---|
| Capex | 5,897,608 | 4,743,279 | 4,447,439 | 7,946,189 | 4,176,272 | -47.4% |
Ratios
|
|---|
| Revenue growth | 39.5% | -36.9% | 10.2% | 104.7% | 3.2% | |
| EBITDA growth | -13.0% | 10.7% | 7.8% | 45.9% | -39.7% | |
| Gross Margin | 27.3% | 43.2% | 40.2% | 29.7% | 15.5% | -14.2% |
| EBITDA Margin | 23.1% | 40.5% | 39.6% | 28.2% | 16.5% | -11.7% |
| Net Income Margin | 8.0% | 30.5% | 47.6% | 8.0% | -15.8% | -23.8% |
| SG&A, % of revenue | 9.4% | 14.4% | 11.5% | 7.4% | 9.9% | 2.5% |
| CAPEX, % of revenue | 134.2% | 171.2% | 145.6% | 127.1% | 64.7% | -62.4% |
| ROIC | 3.2% | 2.9% | 2.8% | 3.6% | 0.8% | -2.8% |
| ROE | 3.7% | 7.5% | 11.1% | 3.7% | -7.3% | -11.0% |
| Net Debt/EBITDA | 13.4x | 10.5x | 14.2x | 14.8x | 25.0x | 10.2x |
Revenue and profitability
The company's Revenue increased on 3.2% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin dropped on 11.7 pp from 28.2% to 16.5% in FY2016.
Gross Margin dropped on 14.2 pp from 29.7% to 15.5% in FY2016. SG&A as a % of Revenue increased on 2.5 pp from 7.4% to 9.9% in FY2016.
Net Income marign dropped on 23.8 pp from 8.0% to -15.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 64.7%. CAPEX/Revenue dropped on 106 pp from 171% in FY2013 to 64.7% in FY2016. It's average CAPEX/Revenue for the last three years was 112%.The company maintained rich investment policy and has spent a lot to CAPEX (392% of EBITDA).
Return on investment
The company operates at low but positive ROIC (0.82%) and negative ROE (-7.26%). ROIC decreased on 2.8 pp from 3.6% to 0.82% in FY2016. ROE dropped on 11.0 pp from 3.7% to -7.3% in FY2016.
Leverage (Debt)
Debt level is 25.0x Net Debt / EBITDA and 25.7x Debt / EBITDA. Net Debt / EBITDA surged on 10.2x from 14.8x to 25.0x in FY2016. Debt increased slightly on 0.99% in FY2016 while cash dropped on 18.0% in FY2016.
Appendix 1: Peers in Real Estate Investment & Services
Below we provide Hagl JSC benchmarking against other companies in Real Estate Investment & Services 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 |
|---|
| Formation Group ($FRM) | | 147.9% | 35.8% | 199.3% | 23.8% |
| Development Securities ($DSC) | | | -20.4% | 156.8% | 18.9% |
| Damac Real Estate Development Ltd ($DMC) | | 76.9% | -16.8% | 128.2% | -16.2% |
| Quintain Estates & Development ($QED) | -3.2% | -13.0% | -17.5% | 77.0% | |
| Farglory Land Development Co Ltd ($FLDS) | -23.9% | 63.2% | -29.0% | 52.6% | |
| |
|---|
| Median (18 companies) | 2.6% | 20.8% | -0.1% | 2.0% | 13.3% |
|---|
| Hagl JSC ($HAG) | | -36.9% | 10.2% | 104.7% | 3.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arricano Real Estate ($ARO) | | 96.1% | 96.5% | 96.1% | |
| Summit Germany Ltd ($SMTG) | | | | 92.3% | |
| Taliesin Property Fund Ltd ($TPFZ) | 75.2% | 76.6% | 74.9% | 76.3% | |
| Panther Securities ($PNS) | 69.2% | 77.2% | 68.0% | 73.5% | |
| Songbird Estates ($SBD) | 71.5% | 68.3% | 70.7% | 72.5% | |
| |
|---|
| Median (14 companies) | 41.0% | 50.3% | 31.9% | 46.6% | 33.7% |
|---|
| Hagl JSC ($HAG) | 27.3% | 43.2% | 40.2% | 29.7% | 15.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Quintain Estates & Development ($QED) | -81.5% | -70.4% | 43.6% | 76.3% | |
| Summit Germany Ltd ($SMTG) | 78.3% | 78.7% | 89.3% | 75.5% | |
| Safeland ($SAF) | -1.5% | -1.6% | 7.0% | 65.8% | 28.0% |
| Damac Real Estate Development Ltd ($DMC) | 32.9% | 54.5% | 46.4% | 53.5% | 52.2% |
| Panther Securities ($PNS) | 44.8% | 56.9% | 50.3% | 52.0% | |
| |
|---|
| Median (17 companies) | 32.9% | 17.5% | 14.9% | 20.3% | 20.2% |
|---|
| Hagl JSC ($HAG) | 23.1% | 40.5% | 39.6% | 28.2% | 16.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Quintain Estates & Development ($QED) | 210.6% | 162.3% | 217.2% | 173.3% | |
| HALS-Development JSC ($HALS) | 83.2% | 347.0% | 25.0% | 47.3% | |
| Taliesin Property Fund Ltd ($TPFZ) | 14.1% | 21.3% | 45.2% | 43.7% | |
| Development Securities ($DSC) | | 2.9% | 13.5% | 24.6% | 2.9% |
| Safeland ($SAF) | 1.2% | 1.2% | 1.1% | 19.5% | 0.5% |
| |
|---|
| Median (18 companies) | 2.6% | 1.2% | 1.8% | 2.1% | 1.0% |
|---|
| Hagl JSC ($HAG) | 134.2% | 171.2% | 145.6% | 127.1% | 64.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Damac Real Estate Development Ltd ($DMC) | 163.1% | 127.1% | 31.3% | 41.5% | 24.5% |
| Safeland ($SAF) | -1.3% | -1.1% | 3.7% | 31.2% | 22.5% |
| PIK Group OJSC ($PIK) | 21.2% | 25.6% | 13.5% | 25.3% | |
| Hml Hldgs ($HMLH) | 8.2% | 9.9% | 12.5% | 12.5% | 11.3% |
| Etalon Group Ltd ($ETLN) | 12.1% | 14.4% | 14.3% | 10.2% | |
| |
|---|
| Median (18 companies) | 4.2% | 2.5% | 3.4% | 4.9% | 8.2% |
|---|
| Hagl JSC ($HAG) | 3.2% | 2.9% | 2.8% | 3.6% | 0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arricano Real Estate ($ARO) | | 11.3x | | 43.0x | |
| Plaza Centers Nv ($PLAZ) | 17.9x | | 41.9x | 25.4x | |
| London & Associated Properties ($LAS) | 40.8x | 11.1x | 13.0x | 20.2x | |
| Songbird Estates ($SBD) | 13.1x | | | 12.3x | |
| Panther Securities ($PNS) | 13.0x | 10.6x | 11.8x | 9.7x | |
| |
|---|
| Median (14 companies) | 7.3x | 7.4x | 9.9x | 4.5x | 2.7x |
|---|
| Hagl JSC ($HAG) | 13.4x | 10.5x | 14.2x | 14.8x | 25.0x |
