LUKOIL OAO Net Income dropped on 29.0% in 2016 and Revenue decreased on 8.3%
14 Mar 2017 • About LUKOIL OAO (
$LKOE) • By InTwits
LUKOIL OAO reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- LUKOIL OAO has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's a lot of higher than industry average of 18.0%.
- CAPEX is quite volatile: 2,324,112 in 2016, 2,560,244 in 2015, 3,505,549 in 2014, 6,569,613 in 2013, 7,054,543 in 2012
- The company has business model with low profitability: ROIC is at 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
LUKOIL OAO ($LKOE) key annual financial indicators
| mln. RUB | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,613,763 | 3,795,625 | 4,697,455 | 5,173,541 | 4,743,732 | -8.3% |
| SG&A | 116,643 | 122,646 | 146,550 | 168,669 | 196,156 | 16.3% |
| EBITDA | 587,161 | 509,926 | 705,386 | 816,705 | 730,731 | -10.5% |
| Net Income | 341,822 | 249,562 | 395,525 | 291,135 | 206,794 | -29.0% |
Balance Sheet
|
|---|
| Cash | 89,045 | 56,315 | 169,023 | 257,263 | 261,367 | 1.6% |
| Short Term Debt | 20,107 | 44,013 | 121,271 | 60,506 | 58,429 | -3.4% |
| Long Term Debt | 182,214 | 311,938 | 634,847 | 799,207 | 640,161 | -19.9% |
Cash flow
|
|---|
| Capex | 361,796 | 476,596 | 575,981 | 600,639 | 497,130 | -17.2% |
Ratios
|
|---|
| Revenue growth | 10.3% | 5.0% | 23.8% | 10.1% | -8.3% | |
| EBITDA growth | 13.3% | -13.2% | 38.3% | 15.8% | -10.5% | |
| EBITDA Margin | 16.2% | 13.4% | 15.0% | 15.8% | 15.4% | -0.4% |
| Net Income Margin | 9.5% | 6.6% | 8.4% | 5.6% | 4.4% | -1.3% |
| SG&A, % of revenue | 3.2% | 3.2% | 3.1% | 3.3% | 4.1% | 0.9% |
| CAPEX, % of revenue | 10.0% | 12.6% | 12.3% | 11.6% | 10.5% | -1.1% |
| ROIC | 17.3% | 11.5% | 11.6% | 11.2% | 9.9% | -1.3% |
| ROE | 15.6% | 10.3% | 14.1% | 9.3% | 6.4% | -2.9% |
| Net Debt/EBITDA | 0.2x | 0.6x | 0.8x | 0.7x | 0.6x | -0.1x |
Revenue and profitability
LUKOIL OAO's Revenue decreased on 8.3% in 2016. EBITDA Margin showed almost no change in 2016.
SG&A as a % of Revenue increased slightly on 0.87 pp from 3.3% to 4.1% in 2016.
Net Income marign decreased slightly on 1.3 pp from 5.6% to 4.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
LUKOIL OAO's CAPEX/Revenue was 10.5% in 2016. LUKOIL OAO showed decline in CAPEX/Revenue of 2.1 pp from 12.6% in 2013 to 10.5% in 2016. It's average level of CAPEX/Revenue for the last three years was 11.5%.The company invested a big chunk of EBITDA (68.0%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (9.90%) and ROE (6.42%). ROIC decreased slightly on 1.3 pp from 11.2% to 9.9% in 2016. ROE decreased on 2.9 pp from 9.3% to 6.4% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.1x from 0.7x to 0.6x in 2016. Debt dropped on 18.7% in 2016 while cash increased slightly on 1.6% in 2016.
Appendix 1: Peers in Oil & Gas Producers
Below you can find LUKOIL OAO 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 ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 26.1% | 3.6% | -0.8% | -20.1% | -10.6% |
|---|
| LUKOIL OAO ($LKOE) | | 5.0% | 23.8% | 10.1% | -8.3% |
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 ($CAZA) | 0.1% | 30.5% | 40.8% | 44.8% | |
| |
|---|
| Median (24 companies) | 17.7% | 20.0% | 15.1% | 12.1% | 11.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Eastern Energy Corp ($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) | 17.2% | 20.6% | 16.5% | 21.8% | 13.6% |
|---|
| LUKOIL OAO ($LKOE) | 16.2% | 13.4% | 15.0% | 15.8% | 15.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($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) | 17.7% | 24.6% | 16.5% | 16.5% | 9.1% |
|---|
| LUKOIL OAO ($LKOE) | 10.0% | 12.6% | 12.3% | 11.6% | 10.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($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% | 9.1% |
|---|
| LUKOIL OAO ($LKOE) | 17.3% | 11.5% | 11.6% | 11.2% | 9.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($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) | 0.5x | 0.7x | 1.3x | 1.7x | 1.8x |
|---|
| LUKOIL OAO ($LKOE) | 0.2x | 0.6x | 0.8x | 0.7x | 0.6x |
