Lg Chem reports 78.7% Net Income decline in 2019
03 Feb 2020 • About Lg Chem (
$LGCD) • By InTwits
Lg Chem reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts: It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 1.4x.
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Lg Chem's Revenue increased slightly on 1.6%. During FY2015-FY2019 Revenue growth topped in FY2017 at 24.4% and was decelerating since that time.
Net Income margin decreased on 4.1 pp from 5.2% to 1.1% in FY2019. During FY2015-FY2019 Net Income margin topped in FY2017 at 7.6% and was declining since that time.
Management team
Lg Chem's CEO is Shin Hak-Cheol. Shin Hak-Cheol is a founder and has 0 years tenure with the company. Lg Chem's CFO is Cha Dong-Seok. Cha Dong-Seok has 0 years tenure at the company.
Financial and operational results
FY ended 30 Nov -0001
Lg Chem ($LGCD) key annual financial indicators| mln. KRW | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 20,206,583 | 20,659,296 | 25,698,014 | 28,183,013 | 28,625,042 | 1.6% |
| Gross Profit | 3,666,042 | 4,064,236 | 5,563,526 | 5,346,197 | | |
| SG&A | 1,652,643 | 1,817,758 | 2,316,987 | 2,712,068 | | |
| EBITDA | 3,079,650 | 3,328,613 | 4,330,499 | 3,733,339 | | |
| EBIT | | | | 2,246,070 | | |
| Interest expence | | | | 135,513 | | |
| Tax | | | | 420,735 | | |
| Net Income | 1,152,990 | 1,281,120 | 1,945,280 | 1,472,610 | 313,365 | -78.7% |
Balance Sheet
|
|---|
| Cash | 1,704,918 | 1,474,367 | 2,249,341 | 2,513,702 | | |
| Inventory | | | | 4,289,463 | | |
| Accounts Payable | | | | 2,165,969 | | |
| Short Term Debt | 2,150,778 | 2,212,641 | 1,451,324 | 1,613,146 | | |
| Long Term Debt | 507,928 | 678,000 | 1,593,625 | 3,708,001 | | |
Cash flow
|
|---|
| Capex | 1,633,410 | 1,398,503 | 2,252,616 | 4,219,355 | | |
| Dividends | | | | 493,880 | | |
Ratios
|
|---|
| Revenue growth | -10.5% | 2.2% | 24.4% | 9.7% | 1.6% | |
| EBITDA growth | 25.1% | 8.1% | 30.1% | -13.8% | | |
|
|---|
| Gross Margin | 18.1% | 19.7% | 21.6% | 19.0% | | |
| EBITDA Margin | 15.2% | 16.1% | 16.9% | 13.2% | |
| EBIT Margin | | | | 8.0% | |
| SG&A, % of revenue | 8.2% | 8.8% | 9.0% | 9.6% | | |
| Net Income Margin | 5.7% | 6.2% | 7.6% | 5.2% | 1.1% | -4.1% |
| CAPEX, % of revenue | 8.1% | 6.8% | 8.8% | 15.0% | | |
|
|---|
| ROIC | 11.6% | 12.0% | 16.0% | 10.7% | | |
| ROE | 8.2% | 8.6% | 11.6% | 8.0% | | |
| Net Debt/EBITDA | 0.3x | 0.4x | 0.2x | 0.8x | |
| Interest expence / Average debt | | | | 2.5% | | |
Peers in Chemicals
Below we provide Lg Chem benchmarking against other companies in Chemicals 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Hardide ($HDD) | | -28.7% | 51.3% | 42.3% | 9.5% |
| Plastics Capital ($PLA) | 21.9% | 28.4% | 29.5% | 16.6% | |
| Victrex ($VCT) | | -4.3% | 15.0% | 12.3% | -9.8% |
| |
|---|
| Median (3 companies) | 3.4% | -15.7% | 14.8% | 16.6% | -0.1% |
|---|
| Lg Chem ($LGCD) | | 2.2% | 24.4% | 9.7% | 1.6% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Victrex ($VCT) | 63.8% | 62.9% | 63.3% | 63.8% | 60.0% |
| Hardide ($HDD) | | 32.0% | 49.1% | 52.3% | 47.8% |
| Plastics Capital ($PLA) | 35.3% | 33.2% | 32.1% | 31.4% | |
| |
|---|
| Median (3 companies) | 40.3% | 35.8% | 41.3% | 52.3% | 53.9% |
|---|
| Lg Chem ($LGCD) | 18.1% | 19.7% | 21.6% | 19.0% | |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Victrex ($VCT) | 45.2% | 45.9% | 44.3% | 44.4% | 41.3% |
| Plastics Capital ($PLA) | 13.3% | 9.5% | 8.9% | 8.6% | |
| Hardide ($HDD) | | -49.1% | -22.7% | -11.9% | -14.4% |
| |
|---|
| Median (3 companies) | 31.9% | 19.0% | 27.9% | 8.6% | 13.5% |
|---|
| Lg Chem ($LGCD) | 15.2% | 16.1% | 16.9% | 13.2% | |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Hardide ($HDD) | | 26.2% | 4.7% | 19.2% | 21.9% |
| Plastics Capital ($PLA) | 2.5% | 4.5% | 5.3% | 4.8% | |
| Victrex ($VCT) | 15.6% | 10.3% | 5.8% | 3.0% | 7.7% |
| |
|---|
| Median (3 companies) | 8.4% | 8.3% | 6.0% | 4.8% | 14.8% |
|---|
| Lg Chem ($LGCD) | 8.1% | 6.8% | 8.8% | 15.0% | |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Victrex ($VCT) | 28.9% | 26.0% | 24.9% | 25.3% | 21.0% |
| Plastics Capital ($PLA) | 6.8% | 4.3% | 7.2% | 6.7% | |
| Hardide ($HDD) | | -35.4% | -32.1% | -21.6% | |
| Halosource Inc ($HALO) | -37.2% | -104.9% | | | |
| Arab Potash Co ($APOD) | 16.7% | 0.6% | 7.1% | | |
| |
|---|
| Median (9 companies) | 17.3% | 12.8% | 14.3% | 6.7% | 21.0% |
|---|
| Lg Chem ($LGCD) | 11.6% | 12.0% | 16.0% | 10.7% | |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Plastics Capital ($PLA) | 2.2x | 2.3x | 2.8x | 2.3x | |
| Victrex ($VCT) | -0.5x | -0.6x | -0.9x | -0.5x | -0.6x |
| |
|---|
| Median (2 companies) | 1.3x | 1.5x | 2.0x | 0.9x | -0.6x |
|---|
| Lg Chem ($LGCD) | 0.3x | 0.4x | 0.2x | 0.8x | |
