$Olin (OLN.US)$Over the past 5 years, revenue declined in 20...
$Olin(OLN.US$Over the past 5 years, revenue declined in 2019 and 2020. The remaining 3 years grew, with an average growth rate of 8.4%. Operating profit declined all the way until 2020, and remained at a high level of over 1.8 billion in the past two years. Net profit reached 1.3 billion and 1.33 billion dollars in 2021 and 2022, respectively.
Over the past 5 years, gross margin has declined all the way from 16.2% to 6.7%, surged to 25.8% in 2021, and fell back to 23.3% in 2022. This level of change reflects an imbalance between supply and demand, which will usually return to balance soon. Growth is not as sustainable as revenue growth.
The company's operating expenses declined significantly in 2022, so even though gross margin declined, operating profit fell by only 3.9%.
The sharp loss in 2020 was mainly an asset impairment of 710 million dollars. Doing this kind of money laundering in the year with the lowest profit actually hurt the company's long-term investment value, because it increased so much uncertainty that needed to be made up for by undervaluation.
The company reduced long-term loans from 3.84 billion to 2.58 billion in 2021, but there was little change in 2022. A close look at the balance sheet revealed that in 2022, the share capital fell from 157 million to 132 million, a decrease of 16% of the share capital. Therefore, despite the decline in net profit, earnings per share increased by 12.3%.
Currently, the price-earnings ratio is 7. The valuation is relatively normal and not very attractive.
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