Indus Gas Ltd Net Income jumped on 30.9% while Revenue decreased on 4.3%
29 Sep 2020 • About Indus Gas Ltd (
$INDI) • By InTwits
Indus Gas Ltd reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Indus Gas Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 199.7%. At the same time it's a lot of higher than industry average of 19.1%.
- CAPEX is quite volatile: £1m in FY2020, £2m in FY2019, £8m in FY2018, £8m in FY2017, £1m in FY2016
- The company has business model with low profitability: ROIC is 9.1%
- It operates with high leverage: Net Debt/EBITDA is 4.5x while industry average is 2.1x
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 decreased on 4.3%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.1 pp from 94.5% to 96.6% in FY2020.
Gross Margin increased on 3.6 pp from 89.8% to 93.4% in FY2020. Gross Margin grew at 5.0 pp per annum in FY2016-FY2020. SG&A as a % of Revenue decreased slightly on 0.59 pp from 1.9% to 1.3% in FY2020. SG&A as a % of Revenue followed a declining trend at -1.1 pp per annum in FY2016-FY2020.
Net Income margin jumped on 22.8 pp from 61.9% to 84.6% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 157% in FY2020. Indus Gas Ltd's CAPEX/Revenue dropped on 30.4 pp from 187% in FY2017 to 157% in FY2020. It's average level of CAPEX/Revenue for the last three years was 204%. Battling declining revenue the company made large investments to CAPEX (162% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at good ROE (21.8%) while ROIC is low (9.1%). ROIC showed almost no change in FY2020. ROE increased slightly on 1.2 pp from 20.6% to 21.8% in FY2020. During the last 5 years ROIC topped in FY2018 at 10.0% and was declining since that time.
Leverage (Debt)
Debt level is 4.5x Net Debt / EBITDA and 4.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 5.1x to 4.5x in FY2020. Debt dropped on 13.3% while cash surged on 120%. Net Debt/EBITDA stuck to a declining trend at -0.3x per annum in FY2016-FY2020.
Indus Gas Ltd has short term refinancing risk: cash is only 1.0% of short term debt.
Financial and operational results
Indus Gas Ltd ($INDI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 45.595 | 39.073 | 39.801 | 60.605 | 57.971 | -4.3% |
| Gross Profit | 35.435 | 27.930 | 32.190 | 54.414 | 54.119 | -0.5% |
| SG&A | 2.282 | 1.920 | 1.480 | 1.129 | 0.737 | -34.7% |
| EBITDA | 42.527 | 51.862 | 56.922 | 57.281 | 55.994 | -2.2% |
| Net Income | 15.706 | 25.383 | 33.629 | 37.487 | 49.060 | 30.9% |
Balance Sheet
|
|---|
| Cash | 61.082 | 11.402 | 13.342 | 0.129 | 0.285 | 120.4% |
| Short Term Debt | 37.557 | 46.614 | 37.300 | 42.869 | 29.323 | -31.6% |
| Long Term Debt | 283.779 | 239.647 | 287.451 | 249.722 | 224.294 | -10.2% |
Cash flow
|
|---|
| Capex | 91.434 | 73.142 | 102.604 | 118.949 | 90.872 | -23.6% |
Ratios
|
|---|
| Revenue growth | 10.2% | -14.3% | 1.9% | 52.3% | -4.3% | |
| EBITDA growth | 13.1% | 21.9% | 9.8% | 0.6% | -2.2% | |
|
|---|
| Gross Margin | 77.7% | 71.5% | 80.9% | 89.8% | 93.4% | 3.6% |
| EBITDA Margin | 93.3% | 132.7% | 143.0% | 94.5% | 96.6% | 2.1% |
| SG&A, % of revenue | 5.0% | 4.9% | 3.7% | 1.9% | 1.3% | -0.6% |
| Net Income Margin | 34.4% | 65.0% | 84.5% | 61.9% | 84.6% | 22.8% |
| CAPEX, % of revenue | 200.5% | 187.2% | 257.8% | 196.3% | 156.8% | -39.5% |
|
|---|
| ROIC | 8.3% | 8.9% | 10.0% | 9.4% | 9.1% | -0.3% |
| ROE | 16.4% | 21.8% | 23.0% | 20.6% | 21.8% | 1.2% |
| Net Debt/EBITDA | 6.1x | 5.3x | 5.5x | 5.1x | 4.5x | -0.6x |
Peers in Oil & Gas Producers
Below we provide Indus Gas Ltd 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | -5.5% | 54.8% | 64.1% | 1.2% | - |
| Total Sa ($TTA) | -10.6% | 14.4% | 18.0% | 0.9% | - |
| BP ($BP.A) | -17.9% | 31.3% | 24.4% | -6.8% | - |
| Royal Dutch Shell ($RDSB) | -11.8% | 30.6% | 27.3% | -11.2% | - |
| |
|---|
| Median (4 companies) | -9.4% | 19.4% | 27.3% | -2.9% | - |
|---|
| Indus Gas Ltd ($INDI) | - | -14.3% | 1.9% | 52.3% | -4.3% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Royal Dutch Shell ($RDSB) | 18.2% | 18.0% | 17.3% | 19.0% | - |
| BP ($BP.A) | 11.9% | 15.1% | 15.4% | 16.9% | - |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 10.5% | 11.5% | 10.4% | 5.5% | - |
| |
|---|
| Median (3 companies) | 12.2% | 18.1% | 22.8% | 16.9% | - |
|---|
| Indus Gas Ltd ($INDI) | 77.7% | 71.5% | 80.9% | 89.8% | 93.4% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Total Sa ($TTA) | 13.6% | 15.1% | 16.8% | 18.5% | - |
| Royal Dutch Shell ($RDSB) | 11.7% | 13.7% | 13.7% | 15.0% | - |
| BP ($BP.A) | 6.3% | 9.1% | 10.1% | 9.4% | - |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 9.3% | 10.4% | 9.8% | 4.3% | - |
| |
|---|
| Median (4 companies) | 13.0% | 16.6% | 13.7% | 12.2% | - |
|---|
| Indus Gas Ltd ($INDI) | 93.3% | 132.7% | 143.0% | 94.5% | 96.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Total Sa ($TTA) | 14.2% | 9.2% | 9.3% | 6.7% | - |
| Royal Dutch Shell ($RDSB) | 9.5% | 6.8% | 5.9% | 6.7% | - |
| BP ($BP.A) | 9.1% | 6.9% | 5.6% | 5.5% | - |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 2.5% | 2.0% | 1.1% | 1.5% | - |
| |
|---|
| Median (4 companies) | 12.8% | 11.0% | 5.9% | 6.1% | - |
|---|
| Indus Gas Ltd ($INDI) | 200.5% | 187.2% | 257.8% | 196.3% | 156.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 16.8% | 25.6% | 31.2% | 10.9% | - |
| Total Sa ($TTA) | 3.2% | 5.8% | 9.2% | 8.8% | - |
| Royal Dutch Shell ($RDSB) | 0.9% | 5.5% | 10.9% | 7.8% | - |
| BP ($BP.A) | -1.8% | 3.9% | 8.7% | 4.3% | - |
| Spitfire Oil Ltd ($SRO) | -4.1% | -6.1% | -6.3% | -6.6% | - |
| |
|---|
| Median (7 companies) | 4.3% | 5.5% | 5.0% | 6.0% | - |
|---|
| Indus Gas Ltd ($INDI) | 8.3% | 8.9% | 10.0% | 9.4% | 9.1% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 1.9x | 1.1x | 1.4x | 2.2x | - |
| BP ($BP.A) | 3.0x | 1.7x | 1.4x | 2.1x | - |
| Royal Dutch Shell ($RDSB) | 2.7x | 1.6x | 0.9x | 1.5x | - |
| Total Sa ($TTA) | 1.7x | 0.8x | 0.8x | 1.1x | - |
| |
|---|
| Median (4 companies) | 0.9x | 0.9x | 0.9x | 1.8x | - |
|---|
| Indus Gas Ltd ($INDI) | 6.1x | 5.3x | 5.5x | 5.1x | 4.5x |
