The frame as of 28/10/2013 (1 € = 1.34 $):
market capitalization: 36.2 € Billion vs. 53.2 € Billion (as of 31/12/2012)
What makes a P/B value of 0.68 (minus all intangible assets P/B value of 0.69)
P/E ratio: 4.5 (Price: 48.0 €; EPS: 10.61 €)
Net Margin (before extraordinary items, as reported): 8.0%
Net Margin (after extraordinary items): 7.9%
Divident yield: 4.3% (Dividend 2012 / Closing price on the 28/10/2013)
Lukoil is reporting a positive result for the last 5 years or more and is paying dividends for the same period as well.
The companies revenue of 100.8 € Billion in 2012 are mostly (98%) generated by exploring, redefining and distribution of oil. The income is generated by those activities as well.
The sales went to 84% to customers outside of russia.
The result in 2012 of 8.2 € Billion (including a small loss from other comprehensive of 0.01 € Billion) or 10.61 € per share.
The balance sheet:
Plant / Equipment 67%
Total Assets: 74 € Billion
Long term finanical liabilities 6%
Trade liabilities 7%
Total Liabilities: 74 € Billion
The company´s plants are depreciated to 66% while it is investing heavily (around 100% up from 2010 and three times more then it is depreciating) than it is depreciating.
The 74% of equity do easily cover Lukoil´s long term assets. Till 2015 Lukoil has CAPEX liabilities of 2.1 € Billion compared an operating cash flow of 14.2 € Billion.
The operative generated Cash Flow (before changes in assets and liabilities) of 12.3 € Billion covers the Cash Flow from investing activities (9.8 € Billion) as their dividend payments (2.1 € Billion).
Vertical integrated group; income taxes are a critical value – while they depend on the government tax rules; exploratory costs are capitalized
Mr Alekperov, President and stakeholder of around 20% of the company´s equity announced just in the beginning of that year (2013) that he respectively his soon will keep his stake long-term. Another 9.3% are owned by the Head of Strategy Mr Fedun.
The free float of the companies shares is 50.00 %
Cheap on a P/E basis. Sufficient margin of safety of around 30% under book value. Strong equity base and operating Cash Flow. The company´s proved reserves allow them to stay in business for more than 12 years without exploring new oil fields.
Possible threats can arise from tax legislations, disasters ala Platform “Deepwater” and a decreasing oil price.
Finally I reckon to buy Lukoil (what I will do tomorrow as well).