Rosneft OJSC reports 49.0% Net Income decline and 0.51 pp EBITDA Margin growth from 22.6% to 23.1%
22 Feb 2017 • About Rosneft OJSC (
$ROSN) • By InTwits
Rosneft OJSC reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rosneft OJSC has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.8%. At the same time it's a lot of higher than industry average of 18.0%.
- CAPEX is quite volatile: 2,324,112 in 2016, 2,560,244 in 2015, 3,505,549 in 2014, 6,569,613 in 2013, 7,054,543 in 2012
- The company has business model with low profitability: ROIC is at 9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rosneft OJSC ($ROSN) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,987,000 | 4,546,000 | 5,376,000 | 5,038,000 | 4,988,000 | -1.0% |
| SG&A | 68,000 | 111,000 | 114,000 | 130,000 | 129,000 | -0.8% |
| EBITDA | 595,000 | 935,000 | 1,069,000 | 1,139,000 | 1,153,000 | 1.2% |
| Net Income | 363,000 | 549,000 | 348,000 | 355,000 | 181,000 | -49.0% |
Balance Sheet
|
|---|
| Cash | 299,000 | 275,000 | 216,000 | 559,000 | 790,000 | 41.3% |
| Short Term Debt | 131,000 | 682,000 | 1,055,000 | 936,000 | 1,573,000 | 68.1% |
| Long Term Debt | 845,000 | 1,684,000 | 2,190,000 | 2,283,000 | 1,914,000 | -16.2% |
Cash flow
|
|---|
| Capex | 473,000 | 560,000 | 533,000 | 595,000 | 709,000 | 19.2% |
Ratios
|
|---|
| Revenue growth | 12.8% | 52.2% | 18.3% | -6.3% | -1.0% | |
| EBITDA growth | -7.9% | 57.1% | 14.3% | 6.5% | 1.2% | |
| EBITDA Margin | 19.9% | 20.6% | 19.9% | 22.6% | 23.1% | 0.5% |
| Net Income Margin | 12.2% | 12.1% | 6.5% | 7.0% | 3.6% | -3.4% |
| SG&A, % of revenue | 2.3% | 2.4% | 2.1% | 2.6% | 2.6% | 0.0% |
| CAPEX, % of revenue | 15.8% | 12.3% | 9.9% | 11.8% | 14.2% | 2.4% |
| ROIC | 11.8% | 11.1% | 9.4% | 10.3% | 9.1% | -1.1% |
| ROE | 16.8% | 20.3% | 11.6% | 12.3% | 5.8% | -6.5% |
| Net Debt/EBITDA | 1.1x | 2.2x | 2.8x | 2.3x | 2.3x | 0.0x |
Revenue and profitability
Rosneft OJSC's Revenue decreased slightly on 0.99% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.51 pp from 22.6% to 23.1% in 2016.
SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased on 3.4 pp from 7.0% to 3.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 14.2%. The company showed small growth in CAPEX/Revenue of 1.9 pp from 12.3% in 2013 to 14.2% in 2016. Average CAPEX/Revenue for the last three years was 12.0%.Battling declining revenue the company invested a large share of EBITDA (61.5%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (9.11%) and ROE (5.84%). ROIC decreased slightly on 1.1 pp from 10.3% to 9.1% in 2016. ROE decreased on 6.5 pp from 12.3% to 5.8% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 3.0x. Net Debt / EBITDA showed almost no change in 2016. Debt increased on 8.3% in 2016 while cash jumped on 41.3% in 2016.
Appendix 1: Peers in Oil & Gas Producers
Below you can find Rosneft 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 ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 23.7% | 3.6% | -0.8% | -20.1% | -11.8% |
|---|
| Rosneft OJSC ($ROSN) | | 52.2% | 18.3% | -6.3% | -1.0% |
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% |
|---|
| Rosneft OJSC ($ROSN) | 19.9% | 20.6% | 19.9% | 22.6% | 23.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($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% | 16.5% | 16.5% | 9.1% |
|---|
| Rosneft OJSC ($ROSN) | 15.8% | 12.3% | 9.9% | 11.8% | 14.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($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% | |
| 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% |
|---|
| Rosneft OJSC ($ROSN) | 11.8% | 11.1% | 9.4% | 10.3% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($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 | 1.7x |
|---|
| Rosneft OJSC ($ROSN) | 1.1x | 2.2x | 2.8x | 2.3x | 2.3x |
