Novatek OAO Net Income jumped on 247% in 2016 and EBITDA Margin surged on 14.5 pp from 33.8% to 48.4%
22 Feb 2017 • About Novatek OAO (
$NVTK) • By InTwits
Novatek OAO reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Novatek OAO is a fast growth stock: 2016 revenue growth was 13.1%, 5 year revenue CAGR was 25.0% at 2016 ROIC 26.6%
- Novatek OAO has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.9%. At the same time it's in pair with industry average of 20.4%.
- CAPEX is quite volatile: 32,319 in FY2016, 28,898 in FY2015, 52,697 in FY2014, 89,904 in FY2013, 98,482 in FY2012
- The company has highly profitable business model: ROIC is at 26.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Novatek OAO ($NVTK) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 210,973 | 298,158 | 357,643 | 475,325 | 537,472 | 13.1% |
| SG&A | 10,622 | 11,029 | 11,831 | 15,163 | 18,126 | 19.5% |
| EBITDA | 96,833 | 157,429 | 144,935 | 160,710 | 259,897 | 61.7% |
| Net Income | 69,458 | 110,006 | 37,296 | 74,396 | 257,795 | 246.5% |
Balance Sheet
|
|---|
| Cash | 18,420 | 7,889 | 41,318 | 29,187 | 48,301 | 65.5% |
| Short Term Debt | 34,682 | 24,026 | 40,980 | 106,655 | 55,469 | -48.0% |
| Long Term Debt | 97,805 | 141,595 | 204,699 | 252,050 | 161,296 | -36.0% |
Cash flow
|
|---|
| Capex | 37,378 | 51,127 | 56,233 | 42,224 | 28,170 | -33.3% |
Ratios
|
|---|
| Revenue growth | 19.8% | 41.3% | 20.0% | 32.9% | 13.1% | |
| EBITDA growth | -35.9% | 62.6% | -7.9% | 10.9% | 61.7% | |
| EBITDA Margin | 45.9% | 52.8% | 40.5% | 33.8% | 48.4% | 14.5% |
| Net Income Margin | 32.9% | 36.9% | 10.4% | 15.7% | 48.0% | 32.3% |
| SG&A, % of revenue | 5.0% | 3.7% | 3.3% | 3.2% | 3.4% | 0.2% |
| CAPEX, % of revenue | 17.7% | 17.1% | 15.7% | 8.9% | 5.2% | -3.6% |
| ROIC | 21.7% | 29.0% | 21.2% | 19.4% | 26.6% | 7.2% |
| ROE | 26.2% | 33.3% | 9.9% | 18.4% | 48.0% | 29.6% |
| Net Debt/EBITDA | 1.2x | 1.0x | 1.4x | 2.1x | 0.6x | -1.4x |
Revenue and profitability
Novatek OAO's Revenue surged on 13.1% in 2016. Having declining revenue the company managed to increase EBITDA margin. 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 jumped on 32.3 pp from 15.7% to 48.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 5.2%. Novatek OAO showed big decline in CAPEX/Revenue of 11.9 pp from 17.1% in 2013 to 5.2% in 2016. It's average CAPEX/Revenue for the last three years was 9.9%.
Return on investment
The company operates at high and attractive ROIC (26.59%) and ROE (47.99%). ROIC increased on 7.2 pp from 19.4% to 26.6% in 2016. ROE jumped on 29.6 pp from 18.4% to 48.0% in 2016.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA dropped on 1.4x from 2.1x to 0.6x in 2016. Debt dropped on 39.6% in 2016 while cash surged on 65.5% in 2016.
Valuation
Novatek OAO's trades at EV/EBITDA 0.6x and P/E 0.0x while industy averages are 15.6x and 19.1x. Novatek OAO's EV/(EBITDA-CAPEX) is 0.7x with the industry average at 19.0x.
Appendix 1: Peers in Oil & Gas Producers
Below we provide Novatek 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 | 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 ($ZOL) | | | | 40.6% | |
| AO Tatneft ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| Surgutneftegaz ($SGGD) | 7.8% | -1.4% | 6.3% | 12.6% | |
| |
|---|
| Median (38 companies) | 23.7% | 3.6% | -0.8% | -20.1% | -11.8% |
|---|
| Novatek OAO ($NVTK) | | 41.3% | 20.0% | 32.9% | 13.1% |
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% |
|---|
| Novatek OAO ($NVTK) | 45.9% | 52.8% | 40.5% | 33.8% | 48.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($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) | 17.5% | 24.6% | 16.5% | 16.5% | 9.5% |
|---|
| Novatek OAO ($NVTK) | 17.7% | 17.1% | 15.7% | 8.9% | 5.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($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% | |
| Serica Energy ($SQZ) | -6.2% | -5.1% | -5.5% | 19.4% | |
| Great Eastern Energy Corp ($GEEC) | 7.1% | 8.9% | 10.7% | 11.2% | 6.0% |
| |
|---|
| Median (39 companies) | 4.2% | 4.1% | 5.2% | 0.8% | 6.0% |
|---|
| Novatek OAO ($NVTK) | 21.7% | 29.0% | 21.2% | 19.4% | 26.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($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 |
|---|
| Novatek OAO ($NVTK) | 1.2x | 1.0x | 1.4x | 2.1x | 0.6x |
