Oil & Gas Development Co CAPEX dropped on 56.1% while Revenue surged on 19.5%
02 Oct 2018 • About Oil & Gas Development Co (
$OGDC) • By InTwits
Oil & Gas Development Co reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Oil & Gas Development Co has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.3%. At the same time it's a lot of higher than industry average of 15.9%.
- CAPEX is quite volatile: 17,491 PKRm in FY2018, 39,805 PKRm in FY2017, 42,314 PKRm in FY2016, 66,318 PKRm in FY2015, 44,288 PKRm in FY2014
- The company has highly profitable business model: ROIC is 17.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 19.5%. During FY2014-FY2018 Revenue growth bottomed in FY2016 at -22.7% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 2.2% to 5.6% in 2018. During the last 5 years EBITDA Margin bottomed in FY2016 at 53.9% and was growing since that time.
Gross Margin increased on 3.9 pp from 55.3% to 59.2% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2016 at 54.0% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin increased slightly on 1.2 pp from 37.1% to 38.3% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at 36.8% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Oil & Gas Development Co had CAPEX/Revenue of 8.5%. Oil & Gas Development Co showed big decline in CAPEX/Revenue of 23.0 pp from 31.5% in FY2015 to 8.5% in FY2018. Average CAPEX/Revenue for the last three years was 19.2%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2015 at 31.5% and was declining since that time.
Return on investment
The company operates at good ROIC (17.3%) and ROE (14.8%). ROIC increased on 3.1 pp from 14.2% to 17.3% in FY2018. ROE increased slightly on 1.9 pp from 12.9% to 14.8% in FY2018. During the last 5 years ROIC bottomed in FY2016 at 13.7% and was growing since that time. During FY2014-FY2018 ROE bottomed in FY2017 at 12.9%.
Leverage (Debt)
The company has no debt. Cash dropped on 11.7%.
Financial and operational results
FY ended 30 Jun 2018
Oil & Gas Development Co ($OGDC) key annual financial indicators| mln. PKR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 257,014 | 210,625 | 162,867 | 171,829 | 205,335 | 19.5% |
| Gross Profit | 176,073 | 131,967 | 87,890 | 95,004 | 121,480 | 27.9% |
| SG&A | | | 3,854 | 4,317 | 4,163 | -3.6% |
| EBITDA | 178,115 | 131,351 | 87,731 | 95,808 | 121,857 | 27.2% |
| Net Income | 123,915 | 87,249 | 59,971 | 63,803 | 78,736 | 23.4% |
Balance Sheet
|
|---|
| Cash | 154 | 13,003 | 7,904 | 4,159 | 3,670 | -11.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 44,288 | 66,318 | 42,314 | 39,805 | 17,491 | -56.1% |
Ratios
|
|---|
| Revenue growth | 15.1% | -18.0% | -22.7% | 5.5% | 19.5% | |
| EBITDA growth | 21.0% | -26.3% | -33.2% | 9.2% | 27.2% | |
|
|---|
| Gross Margin | 68.5% | 62.7% | 54.0% | 55.3% | 59.2% | 3.9% |
| EBITDA Margin | 69.3% | 62.4% | 53.9% | 55.8% | 59.3% | 3.6% |
| SG&A, % of revenue | | | 2.4% | 2.5% | 2.0% | -0.5% |
| Net Income Margin | 48.2% | 41.4% | 36.8% | 37.1% | 38.3% | 1.2% |
| CAPEX, % of revenue | 17.2% | 31.5% | 26.0% | 23.2% | 8.5% | -14.6% |
|
|---|
| ROIC | 39.7% | 24.3% | 13.7% | 14.2% | 17.3% | 3.1% |
| ROE | 35.0% | 20.8% | 13.0% | 12.9% | 14.8% | 1.9% |
| Net Debt/EBITDA | -0.0x | -0.1x | -0.1x | -0.0x | -0.0x | 0.0x |
Peers in Oil & Gas Producers
Below we provide Oil & Gas Development Co 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Eland Oil & Gas ($ELA) | | 54.8% | -86.9% | 2,804.1% | |
| President Energy ($PPC) | -6.1% | -19.8% | -1.9% | 81.3% | |
| Amerisur Resources ($AMER) | 17.9% | -69.3% | -22.9% | 79.6% | |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | -3.3% | -7.1% | -5.5% | 54.8% | |
| Urals Energy Public Co ($UEN) | -11.5% | -38.8% | 6.8% | 52.1% | |
| |
|---|
| Median (32 companies) | -1.8% | -20.1% | -8.9% | 19.7% | 54.8% |
|---|
| Oil & Gas Development Co ($OGDC) | | -18.0% | -22.7% | 5.5% | 19.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | 99.0% | 98.5% | 98.7% | |
| Serica Energy ($SQZ) | | 67.0% | 30.7% | 60.4% | |
| Tethys Petroleum Limited ($TPL) | 46.2% | -76.0% | -30.0% | 42.8% | |
| Zoltav Resources Inc ($ZOL) | 32.5% | 30.7% | 41.9% | 36.0% | |
| Parkmead Group(The) ($PMG) | 13.1% | -111.5% | -44.2% | 28.5% | |
| |
|---|
| Median (21 companies) | 15.1% | 11.6% | 12.1% | 18.0% | -55.6% |
|---|
| Oil & Gas Development Co ($OGDC) | 68.5% | 62.7% | 54.0% | 55.3% | 59.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trinity Exploration & Production ($TRIN) | 25.1% | 30.9% | 13.0% | 77.1% | |
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | 62.5% | 49.7% | 59.3% | |
| Zoltav Resources Inc ($ZOL) | -16.1% | 25.6% | 42.6% | 49.8% | |
| Serica Energy ($SQZ) | | 61.3% | 24.6% | 47.9% | |
| Novatek OAO ($NVTK) | 40.5% | 33.8% | 48.4% | 34.0% | |
| |
|---|
| Median (32 companies) | 15.2% | 13.7% | 12.8% | 15.9% | -62.7% |
|---|
| Oil & Gas Development Co ($OGDC) | 69.3% | 62.4% | 53.9% | 55.8% | 59.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| President Energy ($PPC) | 10.4% | 142.7% | 147.0% | 69.1% | |
| Tethys Petroleum Limited ($TPL) | 95.2% | 37.5% | 12.0% | 66.0% | |
| Ithaca Energy Inc ($IAE) | 103.5% | 42.8% | 41.6% | 33.9% | |
| Volga Gas ($VGAS) | 14.0% | 45.5% | 12.8% | 33.9% | |
| Amerisur Resources ($AMER) | 21.2% | 72.4% | 65.8% | 33.8% | |
| |
|---|
| Median (32 companies) | 15.6% | 15.4% | 12.4% | 10.6% | 1.9% |
|---|
| Oil & Gas Development Co ($OGDC) | 17.2% | 31.5% | 26.0% | 23.2% | 8.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trinity Exploration & Production ($TRIN) | 8.0% | 11.0% | -18.7% | 80.5% | |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 5.3% | 25.4% | 16.8% | 25.6% | |
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | | 10.9% | 20.3% | |
| Novatek OAO ($NVTK) | 21.2% | 19.4% | 26.6% | 17.7% | |
| Serica Energy ($SQZ) | -5.5% | 19.4% | 5.5% | 16.9% | |
| |
|---|
| Median (36 companies) | 5.2% | 0.5% | 3.9% | 5.5% | -13.9% |
|---|
| Oil & Gas Development Co ($OGDC) | 39.7% | 24.3% | 13.7% | 14.2% | 17.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ruspetro ($RPO) | 27.9x | 116.8x | | 22.9x | |
| Ithaca Energy Inc ($IAE) | | | 4.5x | 7.5x | |
| Jkx Oil & Gas ($JKX) | | | | 3.5x | |
| Rosneft OJSC ($ROSN) | 2.8x | 2.3x | 2.3x | 3.1x | |
| Hellenic Petroleum Sa ($HLPD) | | 2.5x | 2.1x | 2.1x | |
| |
|---|
| Median (26 companies) | 1.3x | 1.5x | 1.0x | 1.0x | |
|---|
| Oil & Gas Development Co ($OGDC) | -0.0x | -0.1x | -0.1x | -0.0x | -0.0x |
