About the Company

Lukoil is an oil and gas company, specializes in oil and gas exploration, refining, transportation, marketing and distribution. The company produces petroleum products and petrochemicals, their products are sold internationally in Russia, Eastern and Western Europe, near-abroad countries and the USA.

The company is operating under the following segments: Exploration and Production, Refining, Marketing and Distribution and Corporate and Other.

Lukoil was founded by Vagit Alekperov on November 25, 1991, headquartered in Moscow, Moscow. The company’s date of IPO was on April 18, 20013 registered under the ticker MCX:LKOH.

 

PJSC Lukoil Company Extended Graph Analysis

1. LKOH CASH FLOWS

	2014	2015	2016	2017	2018	2019
Net cash provided by operating activities	865,369,697,920	848,972,000,000	752,247,000,000	758,490,000,000	1,006,651,000,000	1,109,952,000,000
Net cash provided for investing activities	-813,952,240,920	-525,722,000,000	-500,343,000,000	433,286,000,000	420,392,000,000	415,243,000,000
Net cash provided by (used for) financing activities	58,921,626,400	-253,063,000,000	-193,134,000,000	247,395,000,000	468,549,000,000	523,214,000,000
Capital expenditures	-813,952,240,920	-601,325,000,000	-499,679,000,000	-512,108,000,000	-451,679,000,000	-431,851,000,000
Free cash flows	51,417,457,000	247,647,000,000	252,568,000,000	246,382,000,000	554,972,000,000	678,101,000,000

Facts:

• Cash from operating activities were RUB 1.1 trillion in 2019.
• Cash provided for investing activities were RUB -415 billion in 2019.
• Net cash from financing activities were RUB -523 billion in 2019.
• Capital expenditures were RUB -431.9 billion in 2019.
• Free cash flows were RUB 678 billion in 2019.

Explanation

• Cash from operating activities increases year-over-year as net income increases year-over-year.
• Cash from investing activities were the investment in property, plant and equipment; acquisitions, purchases of investments and purchases of intangibles.
• Net cash provided by financing activities were debt repayment, common stock repurchased, dividend paid and other financing activities.
• Capital expenditures are investments in property, plant and equipment.
• Free cash flows had a growth of 1219 percent in five years and increases year-over-year.

Interpretation

The company was efficient in providing cash from operations year-over-year in the last five years. Further, the management was able to provide a positive free cash flow in the last five years.

 

2. LKOH BALANCE SHEET

	2014	2015	2016	2017	2018
Total cash	179,988,892,720	281,031,000,000	278,301,000,000	349,951,000,000	518,850,000,000
Total current assets	1,265,091,787,960	1,213,647,000,000	1,255,641,000,000	1,308,114,000,000	1,478,479,000,000
Net property, plant and equipment	4,528,460,507,480	3,411,153,000,000	3,391,366,000,000	3,575,165,000,000	3,829,164,000,000
Total non-current assets	4,949,472,204,040	3,806,960,000,000	3,759,023,000,000	3,918,101,000,000	4,253,903,000,000
Total assets	6,214,563,992,000	5,020,607,000,000	5,014,673,000,000	5,226,215,000,000	5,732,382,000,000
Short-term debt	118,788,222,280	60,506,000,000	58,429,000,000	128,713,000,000	99,625,000,000
Total current liabilities	789,994,485,280	695,168,000,000	830,686,000,000	958,847,000,000	914,560,000,000
Total non-current liabilities	914,841,629,520	1,102,971,000,000	963,107,000,000	784,417,000,000	752,262,000,000
Total liabilities	1,704,836,114,800	1,798,139,000,000	1,793,793,000,000	1,743,264,000,000	1,666,822,000,000
Total stockholders’ equity	4,509,727,877,200	3,222,468,000,000	3,220,880,000,000	3,482,951,000,000	4,065,560,000,000

Facts:

• Cash was RUB 518.9 billion in 2018.
• Current assets were RUB 1.478 trillion in 2018.
• Net property, plant and equipment was RUB 3.8 trillion in 2018.
• Non-current assets were RUB 4.254 trillion in 2018.
• Total assets were RUB 5.7 trillion in 2018.
• Short-term debt was RUB 99.6 billion in 2018.
• Current liabilities were RUB 914.6 billion in 2018.
• Non-current liabilities were RUB 752 billion in 2018.
• Total liabilities were RUB 1.667 trillion in 2018.
• Shareholders equity was RUB 4.066 trillion in 2018.

Explanation

• Cash has a growth of 188 percent in five years and it represents 35 percent of current assets.
• Current assets increased by 17 percent in 5 years and it represents 26 percent of total assets.
• Net property, plant and equipment decreased by 15 percent in five years and it represents 90 percent of total non-current assets.
• Non-current assets decreased by 14 percent in five years and it represents 74 percent of the total assets.
• Total assets decreased by 8 percent due to property, plant and equipment.
• Short-term debt represents 11 percent of total current liabilities.
• Current liabilities represents 55 percent of total liabilities.
• Non-current liabilities represents 45 percent of total liabilities.
• Total liabilities represents 29 percent of the total liabilities and equities.
• Stockholders equity represents 71 percent of the total liabilities and equities.

Interpretation

The company has a sound balance sheet in the last five years. The company is operating its business using two-thirds of the shareholders investment and one-third using the creditor’s money.

 

3. LKOH INCOME AND MARKET

	2014	2015	2016	2017	2018	2019
Revenue	8,013,730,295,480	5,749,050,000,000	5,227,045,000,000	5,936,705,000,000	8,035,889,000,000	8,325,588,000,000
EBIT	493,552,000,760	464,692,000,000	416,820,000,000	503,811,000,000	768,721,000,000	860,157,000,000
Net Income	263,813,244,240	291,135,000,000	206,794,000,000	418,805,000,000	619,174,000,000	673,275,000,000
Market Capitalization USD	30,216,000,000	22,762,000,000	40,646,000,000	41,078,000,000	49,695,000,000	66,635,000,000
Intrinsic Value USD	31,345,008,852	32,862,137,222	123,791,444,678	119,855,455,079	98,365,393,274	185,462,883,775
EBITDA	901,889,989,000	784,162,000,000	624,386,000,000	872,354,000,000	1,148,295,000,000	1,251,370,000,000

Facts:

• Revenue was RUB 8.326 trillion or USD 130 billion in 2019.
• EBIT was RUB 860 billion USD 13.455 billion in 2019.
• Net income was RUB 673 billion or USD 10.532 billion in 2019.
• Market capitalization was USD 66.6 billion or RUB 4.260 trillion in 2019.
• Intrinsic value was USD 185 billion or RUB 11.856 trillion in 2019.
• EBITDA was RUB 1.251 trillion or USD 19.574 billion in 2019.

Explanation

• Revenue was erratic in movement in the last five years and has grown only 4 percent..
• EBIT has a growth of 74 percent in five years.
• Net income has a growth of 155 percent in five years. Further, it represents 8 percent of the total revenue.
• Market capitalization increased by 121 percent in five years.
• Intrinsic value increased by 492 percent in five years. Moreover, intrinsic value was greater by 178 percent against market capitalization.
• EBITDA has a growth of 39 percent in five years. 

Interpretation

The company is profitable, the management has proficiently managed its business operation in the last five years.

4. LKOH FINANCIAL RATIOS

	2014	2015	2016	2017	2018	2019
Asset Turnover (average)	1.63	1.02	1.04	1.16	1.47	1.46
Return on Asset (ROA) %	5.38	5.18	4.12	8.18	11.3	11.82
Return on Equity (ROE) %	7.44	7.53	6.42	12.49	16.41	17.74
Financial Leverage (avg)	1.37	1.56	1.56	1.5	1.41	1.53
Return on Invested Capital %	6.83	6.71	5.71	10.67	14.51	15.74
Interest Coverage	11.63	9.83	7.76	23.68	25.01	22.62

Facts:

• Asset turnover was averaging 1.46 in 2019.
• Return on assets was 11.82 percent in 2019.
• Return on equity was 17.74 percent in 2019.
• Financial leverage was averaging 1.53 in 2019.
• The return on invested capital was 15.74 percent in 2019.
• Interest coverage 22.62 in 2019.

Explanation

• Asset turnover indicates that the company is generating $1.46 of net sales for every dollar in assets.
• Return on assets indicates that every dollar invested in the entire asset base produced 0.1182 cents.
• Return on equity indicates that every dollar of shareholders equity generated 17.7 cents in profit.
• Financial leverage indicates that in every dollar in equity LKOH had $1.53 in total assets. $0.53 was borrowed.
• Return on invested capital indicates that 15.74 percent is the return that the company makes over its capital. 
• Interest coverage indicates that the company is making more than enough money to cover interest payments 22 times over.

Interpretation

The company is profitable and management is efficient in the performance of its business operations.

 

5. LKOH KEY EXECUTIVE COMPENSATION

REMUNERATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

	2016	2017	2018
Remuneration for performance of duties of a member of the Board of Directors, RUB	6,000,000	6,500,000	6,750,000
Total amount paid to members of the Board of Directors, RUB million *	192,400,000	261,100,000	816,800,000
Total amount paid to members of the Management Committee, RUB million **	1,636,300	1,738,800	5,502,400***

* This amount includes, among others, payments to Directors who are employed by the Company but are not members of the Management Committee (such as salary, bonuses and other types of remuneration).

** Including the remuneration of the President of PJSC LUKOIL

*** With due regard for execution of the Regulations on Long-Term Incentives for Employees of PJSC LUKOIL and its Subsidiaries in 2013-2017

Facts:

• Compensation for performance of duties of a member of a Board of Directors was RUB 6,750,000 in 2018.
• Total amount paid to members of the Board of Directors was RUB 816,800,000 in 2018.
• Total amount paid to members of the management committee was RUB 5,502,400 in 2018.

LUKOIL KEY PEOPLE

NAME	TITLE
Ravil Ulfatovich Maganov	Executive Director, Vice Chairman
Vagit Yusufovich Alekperov	CEO, Director. President
Leonid Arnoldovich Fedun/ Executive Director	Executive Director
Lyubov N Khoba/ Executive Director	Director, Chief Accountant, President

 

6. LKOH LOBBYING AND CONTRIBUTIONS

 

No Politicians or Lobbyist Found – OpenSecret.org  

Center for Responsive Politics

 

7. LKOH FINANCIAL STRENGTH

DATA

	(in RUB)
Working capital	563,919,000,000
Total assets	5,732,382,000,000
Sales	8,325,588,000,000
EBIT	860,157,000,000
Market value of equity	4,342,735,440,000
Book value of total liabilities	1,666,822,000,000
Retained earnings	3,963,628,000,000

CALCULATION

	Ratio	Score	Result
A – Working Capital / Total Assets	0.10	1.20	0.12
B – Retained Earnings / Total Assets	0.69	1.40	0.97
C – EBIT / Total Assets	0.15	3.30	0.50
D – Market Value of Equity / Book Value of Total Liabilities	2.61	0.60	1.56
E – Sales / Total Assets	1.45	1.0	1.45
Z-Score			4.60

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compare data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Lukoil has a Z-Score of 4.60. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy. In other terms, the company is not close to insolvency. The main factors of this statistical measurement is the profitability, liquidity, leverage and efficiency.

 

CITATION

http://www.lukoil.com/

https://www.opensecrets.org/search?q=++PJSC+Lukoil+LKOH&type=indiv

 

Reseahttps://www.morningstar.com/stocks/xlon/lkoh/quoterched and written by Criselda