Gazprom Neft OJSC reports 82.5% Net Income growth and 2.0 pp EBITDA Margin growth from 21.8% to 23.8%
22 Feb 2017 • About Gazprom Neft OJSC (
$GAZ) • By InTwits
Gazprom Neft OJSC reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gazprom Neft OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.6%. At the same time it's in pair with industry average of 20.4%.
- CAPEX is quite volatile: 27,819 in 2016, 31,476 in 2015, 31,513 in 2014, 12,249 in 2013, 17,981 in 2012
- The company has business model with average profitability: ROIC is at 11.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gazprom Neft OJSC ($GAZ) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,232,649 | 1,267,603 | 1,408,238 | 1,467,943 | 1,545,608 | 5.3% |
| SG&A | 68,389 | 72,005 | 86,318 | 100,176 | 108,981 | 8.8% |
| EBITDA | 287,089 | 298,902 | 298,596 | 320,204 | 368,161 | 15.0% |
| Net Income | 176,296 | 177,917 | 122,093 | 109,661 | 200,179 | 82.5% |
Balance Sheet
|
|---|
| Cash | 79,199 | 91,077 | 53,167 | 114,198 | 33,621 | -70.6% |
| Short Term Debt | 77,193 | 52,413 | 61,121 | 147,319 | 80,187 | -45.6% |
| Long Term Debt | 166,447 | 261,455 | 502,306 | 670,779 | 596,221 | -11.1% |
Cash flow
|
|---|
| Capex | 169,213 | 208,611 | 271,330 | 349,036 | 384,817 | 10.3% |
Ratios
|
|---|
| Revenue growth | -5.1% | 2.8% | 11.1% | 4.2% | 5.3% | |
| EBITDA growth | 9.2% | 4.1% | -0.1% | 7.2% | 15.0% | |
| EBITDA Margin | 23.3% | 23.6% | 21.2% | 21.8% | 23.8% | 2.0% |
| Net Income Margin | 14.3% | 14.0% | 8.7% | 7.5% | 13.0% | 5.5% |
| SG&A, % of revenue | 5.5% | 5.7% | 6.1% | 6.8% | 7.1% | 0.2% |
| CAPEX, % of revenue | 13.7% | 16.5% | 19.3% | 23.8% | 24.9% | 1.1% |
| ROIC | 19.7% | 17.6% | 13.6% | 10.6% | 11.0% | 0.4% |
| ROE | 22.2% | 20.0% | 12.1% | 9.9% | 15.9% | 6.0% |
| Net Debt/EBITDA | 0.6x | 0.7x | 1.7x | 2.2x | 1.7x | -0.5x |
Revenue and profitability
The company's Revenue increased on 5.3% in 2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.0 pp from 8.6% to 9.6% in 2016.
SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 5.5 pp from 7.5% to 13.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 24.9% in 2016. The company showed CAPEX/Revenue growth of 8.4 pp from 16.5% in 2013 to 24.9% in 2016. It's average level of CAPEX/Revenue for the last three years was 22.6%.Gazprom Neft OJSC maintained rich investment policy and has spent a lot to CAPEX (105% of EBITDA).
Return on investment
The company operates at good ROE (15.90%) while ROIC is low (10.97%). ROIC showed almost no change in 2016. ROE increased on 6.0 pp from 9.9% to 15.9% in 2016.
Leverage (Debt)
Debt level is 1.7x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 2.2x to 1.7x in 2016. Debt dropped on 17.3% in 2016 while cash dropped on 70.6% in 2016.
Appendix 1: Peers in Oil & Gas Producers
Below you can find Gazprom Neft OJSC 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cadogan Petroleum ($CAD) | -46.1% | 0.3% | 764.9% | 131.2% | |
| Eland Oil & Gas ($ELA) | | | | 54.8% | |
| Zoltav Resources Inc ($ZOL) | | | | 40.6% | |
| Novatek OAO ($NVTK) | | 41.3% | 20.0% | 32.9% | 13.1% |
| AO Tatneft ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 23.7% | 4.3% | -0.8% | -20.1% | -11.8% |
|---|
| Gazprom Neft OJSC ($GAZ) | | 2.8% | 11.1% | 4.2% | 5.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bankers Petroleum Ltd ($BNK) | 77.5% | 81.1% | 80.8% | 72.2% | |
| Serica Energy ($SQZ) | | | | 67.0% | |
| Oil & Gas Development Co ($OGDC) | 69.9% | 70.9% | 68.5% | 62.7% | 54.0% |
| Nighthawk Energy ($HAWK) | 38.8% | 66.8% | 58.1% | 49.8% | |
| Caza Oil & Gas Inc ($CAZA) | 0.1% | 30.5% | 40.8% | 44.8% | |
| |
|---|
| Median (24 companies) | 17.7% | 20.0% | 15.1% | 12.1% | 11.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Eastern Energy Corp ($GEEC) | 61.2% | 64.1% | 70.4% | 66.5% | 50.0% |
| Oil & Gas Development Co ($OGDC) | 73.7% | 65.9% | 69.3% | 62.4% | 55.0% |
| Serica Energy ($SQZ) | | | | 61.3% | |
| Circle Oil ($COP) | 53.5% | 54.8% | 51.1% | 53.0% | |
| Caza Oil & Gas Inc ($CAZA) | -50.7% | -3.0% | 47.7% | 49.8% | |
| |
|---|
| Median (39 companies) | 16.2% | 17.4% | 15.3% | 15.8% | 13.6% |
|---|
| Gazprom Neft OJSC ($GAZ) | 23.3% | 23.6% | 21.2% | 21.8% | 23.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($PPC) | 51.5% | 24.6% | 10.4% | 142.7% | |
| Ruspetro ($RPO) | 139.8% | 55.2% | 77.2% | 80.3% | |
| Parkmead Group(The) ($PMG) | 6.4% | 85.4% | 39.8% | 67.4% | 6.1% |
| Bankers Petroleum Ltd ($BNK) | 64.1% | 50.0% | 58.7% | 47.3% | |
| Volga Gas ($VGAS) | | | 14.0% | 45.5% | |
| |
|---|
| Median (39 companies) | 17.7% | 24.6% | 15.8% | 15.5% | 9.1% |
|---|
| Gazprom Neft OJSC ($GAZ) | 13.7% | 16.5% | 19.3% | 23.8% | 24.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 13.6% | 5.8% | 5.3% | 25.4% | 17.4% |
| Oil & Gas Development Co ($OGDC) | 46.7% | 40.4% | 39.7% | 24.3% | 14.1% |
| AO Tatneft ($ATAD) | 19.2% | 19.1% | 17.8% | 19.7% | |
| Novatek OAO ($NVTK) | 21.7% | 29.0% | 21.2% | 19.4% | 26.6% |
| Serica Energy ($SQZ) | -6.2% | -5.1% | -5.5% | 19.4% | |
| |
|---|
| Median (39 companies) | 4.2% | 4.1% | 5.2% | 0.8% | 6.0% |
|---|
| Gazprom Neft OJSC ($GAZ) | 19.7% | 17.6% | 13.6% | 10.6% | 11.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($JUB) | 77.9x | 38.8x | 44.6x | 192.7x | |
| Ruspetro ($RPO) | 369.1x | 34.8x | 27.9x | 116.8x | |
| Iofina ($IOF) | -5,718.9x | | | 32.8x | |
| Edge Resources Inc ($EDG) | | | 8.0x | 7.6x | |
| BP ($BP.A) | 1.1x | 0.6x | 1.3x | 4.0x | 2.7x |
| |
|---|
| Median (30 companies) | 0.4x | 0.7x | 1.3x | 1.5x | 1.8x |
|---|
| Gazprom Neft OJSC ($GAZ) | 0.6x | 0.7x | 1.7x | 2.2x | 1.7x |
