Discounted Cash Flow Calculation for DB:OIC using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:OIC DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
OCI's share price is below the future cash flow value, and at a moderate discount (> 20%).
OCI's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
OCI's earnings available for a low price, and how does
this compare to other companies in the same industry?
OCI's earnings are expected to grow significantly at over 20% yearly.
OCI's revenue is expected to grow by 6.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
OCI's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Nassef Onssy Naguib Sawiris has been the Chief Executive Officer of OCI N.V. since January 25, 2013. Mr. Sawiris serves as Vice Chairman of BESIX Group SA. Mr. Sawiris has been an Executive Director of OCI N.V. since January 16, 2013. He joined Orascom Group in 1992 and led its investment strategies and execution in various industrial sectors and in significant geographical expansion. He is the Founder of Nile Holding Investments. He ran Orascom Telecom, Media and Technology. He served as the Chairman and Chief Executive Officer of Pakcem Limited. He has many years of experience in various industrial sectors including cement, natural gas and fertilizers. He has been the Chairman of OCI N.V. a role previously held at Orascom Construction Industries (OCI S.A.E.) where he was additionally appointed Chairman in 2009. He served as the Non-Executive Chairman of Orascom Construction Limited until June 7, 2016 and served as its Chief Executive Officer. He joined Orascom Construction Industries SA, which in 1982. He serves as Vice Chairman of BESIX Group SA. Mr. Sawiris had been a Director of LafargeHolcim Ltd. since July 10, 2015 until 2019. He serves as a Director of Nile City Investments and The Egyptian Fertilizer Co. SAE. He served as a Director of OCI GP LLC, a General Partner of OCI Partners LP since June 2013 until July 16, 2018. He had been an Independent Director of Lafarge S.A. from January 2008 to August 4, 2015. He serves as a Director of NNS Holding and its related entities. He served as a Director of Cairo and Alexandria Stock Exchange from 2004 to 2007. He served as an Independent Director of NASDAQ Dubai Limited from July 2008 to June 2010. He served as a Director of Lafarge Pakistan Cement Limited from January 9, 2007 to April 29, 2008. His other appointments include that he is a Member of the University of Chicago’s Board of Trustees since 2013, a Member of the International Advisory Board of JP Morgan since 2017, and a Member of the Board of Adidas AG since 2016. Mr. Sawiris holds a BA in Economics from the University of Chicago.
Nassef Onssy's compensation has increased whilst company is loss making.
Nassef Onssy's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the OCI management team is less than 2 years, this suggests a new team.
Nassef Onssy Sawiris
CEO & Executive Director
Group CFO & Executive Director
Director of Investor Relations
Chief Operating Officer - OCI Fertilizer & Chemicals Group
Group Corporate Treasurer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the OCI board of directors is about average.
OCI N.V. produces and distributes natural gas-based fertilizers and industrial chemicals to agricultural and industrial customers. It operates through Methanol US, Methanol Europe, Nitrogen US, Nitrogen Europe, and Nitrogen MENA segments. The company offers anhydrous ammonia in liquid and gaseous form, granular urea, urea ammonium nitrate solution, calcium ammonium nitrate, methanol, melamine, and diesel exhaust fluid. It also owns and operates an ammonia export terminal at the port of Rotterdam. The company has operations in Europe, the Americas, the Middle East, Africa, Asia, and Oceania. OCI N.V. is headquartered in Amsterdam, the Netherlands.
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