Last update on 2024-06-07

Koninklijke Vopak (VPK.AS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Detailed analysis of Koninklijke Vopak N.V. (VPK.AS) for 2023 based on Piotroski F-Score criteria reveals a strong financial position. Final Score: 7/9.

Short Analysis - Piotroski Score: 7

We're running Koninklijke Vopak (VPK.AS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Koninklijke Vopak (VPK.AS) has a Piotroski F-Score of 7, indicating a solid financial position. The score is based on nine criteria assessing profitability, liquidity, and operating efficiency. The company shows positive net income of €455.7 million, positive operating cash flow of €866.2 million, and an improved ROA. Its operating cash flow is higher than its net income, indicating strong cash flow management. The current ratio and gross margin have increased, but leverage and number of shares remain unchanged or slightly negative.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 7, Koninklijke Vopak (VPK.AS) appears to be a strong investment candidate. The company's return to positive net income, robust cash flow, and improved operating efficiency are promising signs. However, potential investors should be aware of the slight leverage increase and share dilution. Overall, Vopak seems worth considering for further analysis as part of an investment portfolio, especially for those looking for undervalued stocks with improving financial fundamentals.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Koninklijke Vopak (VPK.AS)

Company has a positive net income?

Net income is a critical profitability metric, indicating the company’s earnings after all expenses, taxes, and costs have been deducted from total revenue.

The net income for Koninklijke Vopak (VPK.AS) in 2023 is €455.7 million, which is positive. This warrants an addition of 1 point in the Piotroski score. Historically, Vopak's net income has shown fluctuation over the past 20 years, hitting highs such as €571 million in 2019 and experiencing lows including a negative net income of €-168.4 million in 2022. The return to a positive net income of €455.7 million in 2023 is encouraging, indicating a recovery from the previous year's financial struggle.

Company has a positive cash flow?

Cash Flow from Operations indicates the amount of cash generated by a company’s regular operating activities. It's crucial as it reveals the actual liquidity and efficiency of the core business operations, offering insights into its financial health.

For Koninklijke Vopak, the cash flow from operations (CFO) in 2023 stands at €866.2 million, indicating a positive trend. Over the last 20 years, the CFO has exhibited a generally increasing pattern, rising from €203.4 million in 2003 to €866.2 million in 2023. This positive trajectory signifies robust and improving liquidity, reflecting the company's operational efficiency and capability to generate consistent cash flow. This increase demonstrates that Vopak has been effective in converting its operational profits into cash, which is vital for sustaining operations, paying dividends, reducing debt, and financing growth.

Return on Assets (ROA) are growing?

The Change in ROA criterion evaluates the improvement in the company's profitability relative to its total assets over time. The Piotroski F-Score assigns a point if the current year's Return on Assets (ROA) is higher than the previous year's, signifying better asset utilization in generating profits.

In 2023, Koninklijke Vopak's ROA stood at 0.0668, a significant increase from -0.0239 in 2022. This sharp improvement indicates better management efficiency in profit generation relative to its asset base. As per the Piotroski F-Score criteria, this warrants an increment by 1 point. Comparing this with the industry median, Vopak still trails behind the average industry ROA over the last two decades, which never dropped below 0.1657. Despite the improvement, Vopak's figure of 0.0668 in 2023 is still lower than the industry's, suggesting room for further enhancement in asset profitability.

Operating Cashflow are higher than Netincome?

Explain the criterion for Koninklijke Vopak (VPK.AS) and why it is important to consider

Operating Cash Flow higher than Net Income signifies that the cash-generating ability of a company is robust. This is important because earnings can be influenced by non-cash items, making them less reliable. In 2023, Koninklijke Vopak (VPK.AS) reported an Operating Cash Flow of €866.2M compared to a Net Income of €455.7M. The Operating Cash Flow is indeed higher than Net Income, adding 1 point for this criterion. This trend suggests strong cash flow management. Reviewing the historical data from 2003 to 2023, we see a generally positive trend in Operating Cash Flow, further reinforcing the reliability and quality of Vopak's earnings. The notable dip in Net Income in 2022, which turned negative, highlights the occasional volatility in earnings, making strong Operating Cash Flow even more crucial.

Liquidity of Koninklijke Vopak (VPK.AS)

Leverage is declining?

The leverage ratio examines the extent to which a company utilizes borrowed funds to finance its operations. It's crucial because high leverage indicates higher debt levels which can impact financial stability.

The leverage for Koninklijke Vopak (VPK.AS) increased slightly from 0.336 in 2022 to 0.3375 in 2023, showing a minor uptick. Overall leverage was kept low and relatively consistent. Over the last two decades, leverage peaked at around 0.4191 in 2015, but has since been managed downward to more stable levels close to recent figures. Hence, Vopak's efforts in keeping debt levels stable seem positive, despite the slight increase this year. For Piotroski F-Score, since leverage increased, it adds 0 points.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with short-term assets. A higher ratio indicates better liquidity. Comparing two consecutive years can reveal changes in liquidity management.

The Current Ratio for Koninklijke Vopak (VPK.AS) in 2023 is 0.9644, up from 0.4477 in 2022. This increase signals an improvement in the company's liquidity, indicating a better position to cover its short-term liabilities. Comparing this with the industry median of 1.821 for 2023, Vopak still falls short but the trend shows progress. Additionally, looking at historical data, this is one of the highest ratios Vopak has achieved in recent years, notably higher than the 0.4477 in 2022 and even higher than the 0.5911 in 2021. This upward trend is positive, hence one point is awarded.

Number of shares not diluted?

The change in shares outstanding criterion measures whether the company has issued more shares. It is important because an increase in shares outstanding can dilute existing shareholders' ownership and earnings per share.

The number of outstanding shares of Koninklijke Vopak (VPK.AS) increased from 125,395,678 in 2022 to 125,443,835 in 2023. Therefore, according to the Piotroski Analyses criterion, no point is added for this period as the outstanding shares did not decrease. This increase is minimal but signifies dilution; hence, the result is 0 points. Over the last 20 years, Vopak's outstanding shares have generally trended upwards, with slight decreases in some years. The minimal increase in 2023 indicates stable management but still reflects marginal dilution for shareholders.

Operating of Koninklijke Vopak (VPK.AS)

Cross Margin is growing?

Explain the criterion for change in Gross Margin for Koninklijke Vopak (VPK.AS) and why it is important to consider.

The Gross Margin for Koninklijke Vopak (VPK.AS) increased from 0.7514 in 2022 to 0.7734 in 2023. This trend is positive, as improving Gross Margin indicates better profitability. Specifically, the recent increase shows potential operational efficiency or favorable market conditions. Compared to the industry median, which has fluctuated significantly but remained lower, Vopak’s performance in 2023 surpasses the industry’s median of 0.2368 considerably. Over two decades, Vopak's Gross Margin shows resilience and relative stability while the industry median has shown more volatility. Adding 1 point for this increase aligns with Piotroski's criteria for assessing historical financial performance.

Asset Turnover Ratio is growing?

This criterion measures the efficiency of a company in using its assets to generate sales. An increasing asset turnover ratio indicates improved operational efficiency.

The asset turnover ratio of Koninklijke Vopak (VPK.AS) in 2023 was 0.2088, as compared to 0.1941 in 2022. This appears to be an improvement, evidenced by an uptick in the ratio: an increase from 0.1941 to 0.2088. This suggests that the company has become more adept at utilizing its assets to generate revenue. Given these figures, we add 1 point to the Piotroski score under this criterion. Looking at the long-term data provided, Koninklijke Vopak has seen peaks and troughs in its asset turnover over the last 20 years. From a high of approximately 0.434 in 2006 to a continuous decline with minor recoveries, the ratio has now shown an uptick in 2023, which appears to be a good sign for potential investors and aligns with a positive trend.