China Petroleum & Chemical Corp reports 6.3% EBITDA growth while 4.8% Revenue decline
24 Mar 2017 • About China Petroleum & Chemical Corp (
$SNP) • By InTwits
China Petroleum & Chemical Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Petroleum & Chemical Corp is a company in decline: 2016 revenue growth was -4.8%, 5 years revenue CAGR was -7.2%
- China Petroleum & Chemical Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: 27,819 in 2016, 31,476 in 2015, 31,513 in 2014, 12,249 in 2013, 17,981 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Petroleum & Chemical Corp ($SNP) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,733,618 | 2,833,247 | 2,781,641 | 1,784,026 | 1,698,905 | -4.8% |
| Gross Profit | | | | | 206,740 | |
| SG&A | 61,130 | 69,892 | 68,330 | 62,545 | 123,705 | 97.8% |
| EBITDA | 169,118 | 178,050 | 163,584 | 153,396 | 163,133 | 6.3% |
| Net Income | 63,879 | 66,132 | 46,466 | 32,281 | 46,416 | 43.8% |
Balance Sheet
|
|---|
| Cash | 10,864 | 15,101 | 10,100 | 43,553 | 49,468 | 13.6% |
| Short Term Debt | 115,982 | 163,870 | 178,148 | 119,572 | 81,174 | -32.1% |
| Long Term Debt | 162,116 | 145,590 | 150,932 | 139,746 | 117,446 | -16.0% |
Cash flow
|
|---|
| Capex | 157,066 | 154,946 | 124,381 | 102,657 | 72,847 | -29.0% |
Ratios
|
|---|
| Revenue growth | 11.0% | 3.6% | -1.8% | -35.9% | -4.8% | |
| EBITDA growth | -0.1% | 5.3% | -8.1% | -6.2% | 6.3% | |
| Gross Margin | | | | | 12.2% | 12.2% |
| EBITDA Margin | 6.2% | 6.3% | 5.9% | 8.6% | 9.6% | 1.0% |
| Net Income Margin | 2.3% | 2.3% | 1.7% | 1.8% | 2.7% | 0.9% |
| SG&A, % of revenue | 2.2% | 2.5% | 2.5% | 3.5% | 7.3% | 3.8% |
| CAPEX, % of revenue | 5.7% | 5.5% | 4.5% | 5.8% | 4.3% | -1.5% |
| ROIC | 11.9% | 10.6% | 7.5% | 5.5% | 5.1% | -0.4% |
| ROE | 13.0% | 12.2% | 8.0% | 5.1% | 6.7% | 1.6% |
| Net Debt/EBITDA | 1.6x | 1.7x | 1.9x | 1.4x | 0.9x | -0.5x |
Revenue and profitability
The company's Revenue decreased on 4.8% 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 increased on 3.8 pp from 3.5% to 7.3% in 2016.
Net Income marign increased slightly on 0.92 pp from 1.8% to 2.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.3% in 2016. China Petroleum & Chemical Corp's CAPEX/Revenue decreased slightly on 1.2 pp from 5.5% in 2013 to 4.3% in 2016. It's average level of CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at low ROIC (5.07%) and ROE (6.70%). ROIC showed almost no change in 2016. ROE increased slightly on 1.6 pp from 5.1% to 6.7% in 2016.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 1.4x to 0.9x in 2016. Debt dropped on 23.4% in 2016 while cash jumped on 13.6% in 2016.
Appendix 1: Peers in Oil & Gas Producers
Below we provide China Petroleum & Chemical Corp 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 ($ZOL) | | | | 40.6% | |
| Novatek OAO ($NVTK) | | 41.3% | 20.0% | 32.9% | 13.1% |
| AO Tatneft ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 26.4% | 4.3% | 0.5% | -19.5% | -11.2% |
|---|
| China Petroleum & Chemical Corp ($SNP) | | 3.6% | -1.8% | -35.9% | -4.8% |
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% | 14.5% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 6.2% | 6.3% | 5.9% | 8.6% | 9.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($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% | 9.7% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 5.7% | 5.5% | 4.5% | 5.8% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($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% | 7.7% |
|---|
| China Petroleum & Chemical Corp ($SNP) | 11.9% | 10.6% | 7.5% | 5.5% | 5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($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 | 1.7x | 1.8x |
|---|
| China Petroleum & Chemical Corp ($SNP) | 1.6x | 1.7x | 1.9x | 1.4x | 0.9x |
