Bank Muscat revenue jumped on 19.2%
03 Dec 2019 • About Bank Muscat (
$BKM) • By InTwits
Bank Muscat reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bank Muscat is a fast growth stock: FY2019 revenue growth was 19.2%, 5 year revenue CAGR was 140% at FY2019 ROIC 4.6%
- Bank Muscat has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 2.4%
- CAPEX is quite volatile: 478 OMRm in FY2019, 330 OMRm in FY2018, 11 OMRm in FY2017, 10 OMRm in FY2016, 16 OMRm in FY2015
- The company has potentially unprofitable business model: ROIC is 4.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 19.2%. During FY2015-FY2019 Revenue growth topped in FY2018 at 5,513%.
Net Income margin decreased slightly on 1.9 pp from 16.8% to 14.9% in FY2019. Net Income margin stuck to a declining trend at -5.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2019 Bank Muscat had CAPEX/Revenue of 1.2%. The company showed small CAPEX/Revenue decline of 0.72 pp from 2.0% in FY2016 to 1.2% in FY2019. Average CAPEX/Revenue for the last three years was 1.4%. CAPEX as a % of Revenue declined at -0.48 pp per annum in the last 5 years.
Return on investment
The company operates at good ROE (12.7%) while ROIC is low (4.6%). ROIC decreased slightly on 0.80 pp from 5.4% to 4.6% in FY2019. ROE showed almost no change in FY2019.
Leverage (Debt)
Debt decreased on 6.6% while cash jumped on 15.8%.
Bank Muscat has no short term refinancing risk: cash is higher than short term debt (185.9%).
Financial and operational results
FY ended 31 Oct 2019
Bank Muscat ($BKM) key annual financial indicators| mln. OMR | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 501 | 535 | 579 | 32,502 | 38,747 | 19.2% |
| Tax | | | | 1,961 | | |
| Net Income | 175 | 177 | 177 | 5,453 | 5,758 | 5.6% |
Balance Sheet
|
|---|
| Cash | 2,412 | 1,042 | 935 | 42,142 | 48,803 | 15.8% |
| Short Term Debt | 3,051 | 832 | 910 | 28,804 | 26,253 | -8.9% |
| Long Term Debt | 335 | 613 | 583 | 6,782 | 6,995 | 3.1% |
Cash flow
|
|---|
| Capex | 16 | 10 | 11 | 330 | 478 | 44.8% |
| Dividends | | | | 2,582 | | |
| Acquisitions | | | | 365 | | |
Ratios
|
|---|
| Revenue growth | 3.3% | 6.9% | 8.2% | 5,513.3% | 19.2% | |
|
|---|
| Net Income Margin | 35.1% | 33.0% | 30.5% | 16.8% | 14.9% | -1.9% |
| CAPEX, % of revenue | 3.2% | 2.0% | 1.9% | 1.0% | 1.2% | 0.2% |
|
|---|
| ROIC | 5.0% | 4.8% | 6.5% | 5.4% | 4.6% | -0.8% |
| ROE | 13.0% | 12.0% | 10.9% | 12.9% | 12.7% | -0.2% |
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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Yapi Ve Kredi Bankasi As ($YKBD) | 25.3% | 17.8% | 18.8% | 51.8% | |
| Turkiye Garanti Bankasi ($39IS) | 10.3% | 20.4% | 18.6% | 50.6% | |
| Finansbank ($FBKD) | 6.9% | 16.8% | 19.0% | 50.1% | |
| Turk Ekonomi Bankasi As ($TURA) | 14.6% | 18.1% | 2.6% | 44.8% | |
| Turkiye Is Bankasi ($TIBD) | 15.8% | 16.8% | 18.1% | 34.0% | |
| |
|---|
| Median (19 companies) | 4.0% | 3.4% | 4.5% | 12.2% | |
|---|
| Bank Muscat ($BKM) | | 6.9% | 8.2% | 5,513.3% | 19.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Banco Santander Sa ($BNC) | 10.2% | 9.1% | 10.0% | 14.7% | |
| Bcb Hldgs Ltd ($BCBW) | 2.5% | 3.0% | 7.3% | 5.9% | |
| Barclays ($BARC) | 7.1% | 6.3% | 5.4% | 4.9% | |
| Royal Bank Of Scotland Group ($RBS) | 4.6% | 5.6% | 7.1% | 3.7% | |
| Turkiye Garanti Bankasi ($39IS) | 2.4% | 3.6% | 2.4% | 3.5% | |
| |
|---|
| Median (16 companies) | 2.5% | 2.5% | 1.8% | 1.4% | |
|---|
| Bank Muscat ($BKM) | 3.2% | 2.0% | 1.9% | 1.0% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Bcb Hldgs Ltd ($BCBW) | -8.7% | 5.7% | 5.0% | 34.6% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.3% | 28.0% | 25.3% | 25.4% | |
| Komercni Banka ($KMCA) | 7.4% | 8.0% | 9.1% | 8.7% | |
| Turkiye Garanti Bankasi ($39IS) | 4.3% | 5.5% | 6.5% | 6.5% | |
| Finansbank ($FBKD) | 3.1% | 4.3% | 4.6% | 5.4% | |
| |
|---|
| Median (34 companies) | 3.4% | 4.5% | 4.4% | 4.1% | |
|---|
| Bank Muscat ($BKM) | 5.0% | 4.8% | 6.5% | 5.4% | 4.6% |
