Bank Muscat revenue jumped on 5,513%
04 Dec 2018 • About Bank Muscat (
$BKM) • By InTwits
Bank Muscat reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank Muscat is a fast growth stock: FY2018 revenue growth was 5,513%, 5 year revenue CAGR was 137% at FY2018 ROIC 5.4%
- Bank Muscat has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 3.4%
- CAPEX is quite volatile: 330 OMRm in FY2018, 11 OMRm in FY2017, 10 OMRm in FY2016, 16 OMRm in FY2015, 0 OMRm in FY2014
- In the last 5 years the company invested considerably less than D&A: 367 OMRm vs. 903 OMRm. In FY2018 this situation was still the same: CAPEX was 330 while D&A was 903
- The company has potentially unprofitable business model: ROIC is 5.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Bank Muscat's Revenue jumped on 5,513%. During the last 5 years Revenue growth bottomed in FY2015 at 3.3% and was accelerating since that time.
Net Income margin dropped on 13.8 pp from 30.5% to 16.8% in FY2018. During the last 5 years Net Income margin topped in FY2015 at 35.1% and was declining since that time. The efficient tax rate was 26.4% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Bank Muscat had CAPEX/Revenue of 1.0%. CAPEX/Revenue decreased on 2.2 pp from 3.2% in FY2015 to 1.0% in FY2018. It's average level of CAPEX/Revenue for the last three years was 1.6%.
Bank Muscat has spent 365m OMR on M&A in FY2018 which accounts for 1.1% of revenue.
Return on investment
The company operates at good ROE (12.9%) while ROIC is low (5.4%). ROIC decreased slightly on 1.2 pp from 6.5% to 5.4% in FY2018. ROE increased slightly on 2.0 pp from 10.9% to 12.9% in FY2018.
Leverage (Debt)
Debt jumped on 2,283% while cash surged on 4,408%.
Bank Muscat has no short term refinancing risk: cash is higher than short term debt (146.3%).
The company paid 47.4% of Net Income as dividends in FY2018.
Management team
CEO total compensation was 10,124,234 OMR in FY2018 which included 1,000,000 OMR salary.
The company has 48,454 employees. Average revenue per employee in FY2018 was 670,781 OMR.
Financial and operational results
FY ended 31 Oct 2018
Bank Muscat ($BKM) key annual financial indicators| mln. OMR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 484 | 501 | 535 | 579 | 32,502 | 5,513.3% |
| Tax | | | | | 1,961 | |
| Net Income | 163 | 175 | 177 | 177 | 5,453 | 2,984.0% |
Balance Sheet
|
|---|
| Cash | 837 | 2,412 | 1,042 | 935 | 42,142 | 4,408.4% |
| Short Term Debt | 889 | 3,051 | 832 | 910 | 28,804 | 3,064.8% |
| Long Term Debt | 240 | 335 | 613 | 583 | 6,782 | 1,063.5% |
Cash flow
|
|---|
| Capex | 0 | 16 | 10 | 11 | 330 | 2,965.8% |
| Dividends | | | | | 2,582 | |
| Acquisitions | | | | | 365 | |
Ratios
|
|---|
| Revenue growth | 10.4% | 3.3% | 6.9% | 8.2% | 5,513.3% | |
|
|---|
| Net Income Margin | 33.7% | 35.1% | 33.0% | 30.5% | 16.8% | -13.8% |
| CAPEX, % of revenue | 0.0% | 3.2% | 2.0% | 1.9% | 1.0% | -0.8% |
|
|---|
| ROIC | 7.6% | 5.0% | 4.8% | 6.5% | 5.4% | -1.2% |
| ROE | 12.9% | 13.0% | 12.0% | 10.9% | 12.9% | 2.0% |
People
|
|---|
| Employees | | | | | 48,454 | |
| Revenue/Employee, th. OMR | | | | | 671 | |
Peers in Banks
Below we provide Bank Muscat benchmarking against other companies in Banks 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 |
|---|
| European Islamic Investment Bank ($EIIB) | 42.3% | -4.1% | -63.9% | 232.5% | |
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 16.3% | 19.5% | 16.4% | 59.5% | |
| Zenith Bank ($ZENB) | | 6.8% | 17.9% | 46.7% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 18.9% | 26.8% | 27.0% | 46.4% | |
| TCS Group Holding ($TCS) | 11.5% | 10.6% | 34.0% | 33.7% | |
| |
|---|
| Median (43 companies) | 11.5% | 4.0% | 3.4% | 4.5% | 6.9% |
|---|
| Bank Muscat ($BKM) | | 3.3% | 6.9% | 8.2% | 5,513.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lloyds Banking Group ($LLPC) | 13.1% | 13.6% | 14.5% | 14.5% | |
| Banco Santander Sa ($BNC) | 8.9% | 10.2% | 9.1% | 10.0% | |
| Bcb Hldgs Ltd ($BCBW) | 5.4% | 2.5% | 3.0% | 7.3% | 5.9% |
| Royal Bank Of Scotland Group ($RBS) | 4.1% | 4.6% | 5.6% | 7.1% | |
| Diamond Bank ($DBPA) | 6.0% | 6.7% | 6.2% | 7.0% | |
| |
|---|
| Median (39 companies) | 2.1% | 2.5% | 2.5% | 1.8% | 1.2% |
|---|
| Bank Muscat ($BKM) | 0.0% | 3.2% | 2.0% | 1.9% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TCS Group Holding ($TCS) | 6.7% | 3.4% | 22.5% | 31.8% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.1% | 30.3% | 28.0% | 25.3% | |
| Guaranty Trust Bank ($GRTB) | 17.8% | 16.0% | 17.4% | 18.3% | |
| Sberbank Of Russia ($SBER) | 4.8% | 4.0% | 9.4% | 13.0% | |
| Zenith Bank ($ZENB) | 15.0% | 11.2% | 11.1% | 11.4% | |
| |
|---|
| Median (43 companies) | 4.4% | 3.4% | 4.5% | 4.4% | 2.4% |
|---|
| Bank Muscat ($BKM) | 7.6% | 5.0% | 4.8% | 6.5% | 5.4% |
