Aluminium Bahrain Bsc Net Debt / EBITDA surged on 4.9x from 2.5x to 7.4x in 2018 and Debt jumped on 80.9%
07 Feb 2019 • About Aluminium Bahrain Bsc (
$ALBH) • By InTwits
Aluminium Bahrain Bsc reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Aluminium Bahrain Bsc has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.1%. At the same time it's a lot of higher than industry average of 17.3%.
- CAPEX is quite volatile: 526 BHDm in 2018, 465 BHDm in 2017, 108 BHDm in 2016, 49 BHDm in 2015, 51 BHDm in 2014
- The company has potentially unprofitable business model: ROIC is 2.1%
- It operates with high leverage: Net Debt/EBITDA is 7.4x while industry average is 1.6x
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 increased on 6.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 74.6 pp from 58.6% to -16.0% in FY2018.
Gross Margin decreased on 6.4 pp from 15.7% to 9.3% in 2018. SG&A as a % of Revenue showed almost no change in 2018. SG&A as a % of Revenue declined at -0.25 pp per annum in 2014-2018.
Net Income margin decreased on 4.2 pp from 10.8% to 6.6% in 2018. The efficient tax rate was 0.9% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 57.7%. The company's CAPEX/Revenue surged on 51.4 pp from 6.3% in 2015 to 57.7% in 2018. For the last three years the average CAPEX/Revenue was 42.7%. The company maintained rich investment policy and has spent a lot to CAPEX (517% of EBITDA). CAPEX as a % of Revenue stuck to a growing trend at 15.1 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (2.1%) and ROE (5.6%). ROIC decreased on 4.9 pp from 7.0% to 2.1% in 2018. ROE decreased on 3.4 pp from 9.1% to 5.6% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.4x and Debt / EBITDA is 8.5x. Net Debt / EBITDA surged on 4.9x from 2.5x to 7.4x in 2018. Debt surged on 80.9% while cash surged on 34.1%. During 2014-2018 Net Debt/EBITDA bottomed in 2015 at -0.2x and was growing since that time.
Aluminium Bahrain Bsc has good short term financial stability: Interest coverage ratio (ICR) is 42.3x. Aluminium Bahrain Bsc has no short term refinancing risk: cash is higher than short term debt (139.4%).
Average interest expence paid by the company was 0.10% in 2018.
Valuation and dividends
The company's trades at EV/EBITDA 7.6x and P/E 0.3x.
The company paid 61.9% of Net Income as dividends in 2018.
Financial and operational results
FY ended 31 Dec 2018
Aluminium Bahrain Bsc ($ALBH) key annual financial indicators| mln. BHD | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 821.7 | 766.7 | 669.8 | 857.8 | 911.3 | 6.2% |
| Gross Profit | 147.8 | 103.3 | 82.4 | 134.6 | 85.0 | -36.9% |
| SG&A | 49.4 | 44.6 | 33.8 | 44.0 | 46.5 | 5.5% |
| EBITDA | 177.8 | 132.4 | 122.9 | 158.3 | 101.8 | -35.7% |
| EBIT | | | | | 36.9 | |
| Interest expence | | | | | 0.9 | |
| Tax | | | | | 0.5 | |
| Net Income | 96.4 | 60.0 | 48.4 | 92.5 | 59.8 | -35.4% |
Balance Sheet
|
|---|
| Cash | 67.2 | 116.0 | 66.4 | 77.5 | 103.9 | 34.1% |
| Inventory | | | | | 266.2 | |
| Short Term Debt | 72.4 | 56.4 | 45.2 | 22.1 | 74.5 | 237.9% |
| Long Term Debt | 64.1 | 33.0 | 6.5 | 453.6 | 785.9 | 73.2% |
Cash flow
|
|---|
| Capex | 50.6 | 48.6 | 108.1 | 464.8 | 525.8 | 13.1% |
| Dividends | | | | | 37.0 | |
Ratios
|
|---|
| Revenue growth | 9.7% | -6.7% | -12.6% | 28.1% | 6.2% | |
| EBITDA growth | 28.8% | -25.5% | -7.2% | 28.7% | -35.7% | |
|
|---|
| Gross Margin | 18.0% | 13.5% | 12.3% | 15.7% | 9.3% | -6.4% |
| EBITDA Margin | 21.6% | 17.3% | 18.4% | 18.4% | 11.2% | -7.3% |
| EBIT Margin | | | | | 4.1% |
| SG&A, % of revenue | 6.0% | 5.8% | 5.0% | 5.1% | 5.1% | -0.0% |
| Net Income Margin | 11.7% | 7.8% | 7.2% | 10.8% | 6.6% | -4.2% |
| CAPEX, % of revenue | 6.2% | 6.3% | 16.1% | 54.2% | 57.7% | 3.5% |
|
|---|
| ROIC | 9.3% | 5.6% | 4.9% | 7.0% | 2.1% | -4.9% |
| ROE | 10.8% | 6.4% | 5.0% | 9.1% | 5.6% | -3.4% |
| Net Debt/EBITDA | 0.4x | -0.2x | -0.1x | 2.5x | 7.4x | 4.9x |
| Interest expence / Average debt | | | | | 0.1% | |
Peers in Industrial Metals & Mining
Below we provide Aluminium Bahrain Bsc benchmarking against other companies in Industrial Metals & Mining 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 |
|---|
| Ezz Steel ($AEZD) | -8.9% | -14.2% | 39.3% | 80.0% | |
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | | -9.0% | 23.1% | 62.8% | 6.0% |
| Magnitogorsk Iron & Steel Works ($MMK) | | -26.6% | -3.6% | 34.0% | |
| Norsk Hydro Asa ($NHY) | | 12.6% | -6.5% | 33.3% | 45.9% |
| Severstal PJSC ($SVST) | | -22.9% | -7.5% | 32.7% | 9.3% |
| |
|---|
| Median (13 companies) | 3.3% | -14.2% | -3.6% | 31.6% | 14.5% |
|---|
| Aluminium Bahrain Bsc ($ALBH) | | -6.7% | -12.6% | 28.1% | 6.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 52.2% | 55.7% | 49.9% | 49.7% | |
| Severstal PJSC ($SVST) | 34.4% | 40.4% | 39.6% | 39.7% | 42.7% |
| Base Resources Ltd ($BSE) | 11.8% | 21.2% | 21.0% | 35.9% | 39.7% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 28.3% | 31.4% | 33.6% | 32.5% | 36.2% |
| Magnitogorsk Iron & Steel Works ($MMK) | 21.9% | 30.6% | 32.2% | 30.2% | |
| |
|---|
| Median (11 companies) | 19.5% | 20.5% | 21.0% | 27.9% | 36.2% |
|---|
| Aluminium Bahrain Bsc ($ALBH) | 18.0% | 13.5% | 12.3% | 15.7% | 9.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Base Resources Ltd ($BSE) | -2.0% | 37.7% | 35.8% | 50.9% | 54.9% |
| Mmc Norilsk Nickel ($MNOD) | 46.8% | 47.0% | 46.5% | 41.2% | |
| Severstal PJSC ($SVST) | 26.4% | 32.4% | 31.2% | 32.6% | 36.1% |
| First Quantum Minerals ($FQM) | 39.9% | 17.8% | 36.1% | 32.5% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 19.5% | 28.3% | 34.5% | 26.5% | |
| |
|---|
| Median (13 companies) | 12.6% | 14.6% | 19.1% | 24.0% | 21.7% |
|---|
| Aluminium Bahrain Bsc ($ALBH) | 21.6% | 17.3% | 18.4% | 18.4% | 11.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| First Quantum Minerals ($FQM) | 81.7% | 72.5% | 56.0% | 60.9% | |
| Mmc Norilsk Nickel ($MNOD) | 10.8% | 19.0% | 20.2% | 21.2% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 6.3% | 6.0% | 8.2% | 8.8% | |
| Severstal PJSC ($SVST) | 8.4% | 6.4% | 8.4% | 7.1% | 7.6% |
| Norsk Hydro Asa ($NHY) | 4.2% | 6.0% | 8.4% | 6.7% | 4.5% |
| |
|---|
| Median (13 companies) | 6.4% | 6.3% | 5.9% | 5.9% | 5.1% |
|---|
| Aluminium Bahrain Bsc ($ALBH) | 6.2% | 6.3% | 16.1% | 54.2% | 57.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Severstal PJSC ($SVST) | 17.7% | 30.3% | 29.7% | 38.8% | 49.5% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 25.6% | 24.4% | 24.3% | 31.0% | |
| Magnitogorsk Iron & Steel Works ($MMK) | 9.1% | 18.1% | 26.7% | 24.4% | |
| Mmc Norilsk Nickel ($MNOD) | 34.1% | 31.7% | 28.7% | 23.8% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 12.0% | 15.7% | 17.5% | 22.3% | 34.5% |
| |
|---|
| Median (14 companies) | 5.9% | 6.7% | 5.5% | 10.1% | 8.0% |
|---|
| Aluminium Bahrain Bsc ($ALBH) | 9.3% | 5.6% | 4.9% | 7.0% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| First Quantum Minerals ($FQM) | 4.0x | 10.5x | 4.5x | 5.2x | |
| OAO TMK ($TMKS) | 3.8x | 4.3x | 5.2x | 4.8x | |
| Ezz Steel ($AEZD) | 19.4x | 13.3x | 7.8x | 4.5x | |
| Posco ($PIDD) | 3.7x | 3.6x | 3.4x | 2.3x | 2.0x |
| Mmc Norilsk Nickel ($MNOD) | 0.6x | 1.0x | 1.2x | 2.2x | |
| |
|---|
| Median (13 companies) | 1.2x | 1.1x | 0.9x | 0.7x | 0.5x |
|---|
| Aluminium Bahrain Bsc ($ALBH) | 0.4x | -0.2x | -0.1x | 2.5x | 7.4x |
