Today I will take a look at Havila Shipping ASA’s (OB:HAVI) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the energy services industry performed. As an investor, I find it beneficial to assess HAVI’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Havila Shipping
How Did HAVI’s Recent Performance Stack Up Against Its Past?
I look at the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to analyze different companies on a similar basis, using the most relevant data points. For Havila Shipping, its most recent trailing-twelve-month earnings is -ØRE435.33M, which, against the previous year’s level, has become less negative. Since these figures are somewhat myopic, I’ve calculated an annualized five-year value for Havila Shipping’s earnings, which stands at -ØRE451.84M. This suggests that, while net income is negative, it has become less negative over the years.We can further evaluate Havila Shipping’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Havila Shipping has seen an annual decline in revenue of -3.31%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the NO energy services industry has been ramping up growth, more than doubling average earnings over the previous twelve months, . This is a a substantial change from a volatile drop of -4.61% in the previous couple of years. This means whatever tailwind the industry is enjoying, Havila Shipping has not been able to reap as much as its industry peers.
What does this mean?
Havila Shipping’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues Havila Shipping may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Havila Shipping to get a better picture of the stock by looking at:
- 1. Financial Health: Is HAVI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.