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PJSC LUKOIL Company (LKOH) Extended Graph Analysis

November 27th, 2019 Posted by Extended Analysis No Comment yet

About the Company

Lukoil

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

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

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

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

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

LKOH COMPENSATION OF DIRECTORS AND MANAGEMENT COMMITTEE MEMBERS

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

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

 

 

 

 

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