Cabo Drilling Corp reports 36.3% revenue decline in FY2015 and 8.2 pp EBITDA Margin growth from -13.6% to -5.3%
04.11.2015 • About Cabo Drilling Corp (
$CBE) • By InTwits
Cabo Drilling Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cabo Drilling Corp is a company in decline: FY2015 revenue growth was -36.3%, 5 years revenue CAGR was -12.8%
- The company operates at negative EBITDA Margin: -5.3%
- EBITDA Margin is quite volatile: -5.3% in FY2015, -13.6% in FY2014, 9.3% in FY2013, 9.8% in FY2012, 6.1% in FY2011
- Cabo Drilling Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 28.7%.
- CAPEX is quite volatile: 0.43 in FY2015, 0.40 in FY2014, 1.7 in FY2013, 2.9 in FY2012, 3.1 in FY2011
- The company has unprofitable business model: ROIC is at -17.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cabo Drilling Corp ($CBE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 43.420 | 58.951 | 42.534 | 23.014 | 14.651 | -36.3% |
| Gross Profit | 7.098 | 10.750 | 8.210 | 0.817 | 0.859 | 5.2% |
| SG&A | | | | | 3.959 | |
| EBITDA | 2.645 | 5.758 | 3.939 | -3.121 | -0.778 | -75.1% |
| Net Income | -0.840 | 1.655 | -0.565 | -5.027 | -6.772 | 34.7% |
Balance Sheet
|
|---|
| Cash | 0.103 | 0.941 | 0.134 | 0.630 | 0.046 | -92.6% |
| Short Term Debt | 5.081 | 3.239 | 2.076 | 5.035 | 4.884 | -3.0% |
| Long Term Debt | 1.080 | 4.970 | 4.317 | 0.155 | 0.325 | 109.3% |
Cash flow
|
|---|
| Capex | 3.083 | 2.935 | 1.665 | 0.403 | 0.426 | 5.8% |
Ratios
|
|---|
| Revenue growth | 49.8% | 35.8% | -27.8% | -45.9% | -36.3% | |
| EBITDA growth | 77.6% | 117.7% | -31.6% | -179.2% | -75.1% | |
| Gross Margin | 16.3% | 18.2% | 19.3% | 3.5% | 5.9% | 2.3% |
| EBITDA Margin | 6.1% | 9.8% | 9.3% | -13.6% | -5.3% | 8.2% |
| Net Income Margin | -1.9% | 2.8% | -1.3% | -21.8% | -46.2% | -24.4% |
| SG&A, % of revenue | | | | | 27.0% | 27.0% |
| CAPEX, % of revenue | 7.1% | 5.0% | 3.9% | 1.8% | 2.9% | 1.2% |
| ROIC | 0.6% | 10.9% | 4.5% | -23.2% | -17.4% | 5.9% |
| ROE | -4.2% | 7.3% | -2.4% | -23.7% | -44.1% | -20.4% |
| Net Debt/EBITDA | 2.3x | 1.3x | 1.6x | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 36.3% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.2 pp from -13.6% to -5.3% in FY2015.
Gross Margin increased on 2.3 pp from 3.5% to 5.9% in FY2015.
Net Income marign dropped on 24.4 pp from -21.8% to -46.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Cabo Drilling Corp's CAPEX/Revenue was 2.9% in FY2015. Cabo Drilling Corp showed decline in CAPEX/Revenue of 2.1 pp from 5.0% in FY2012 to 2.9% in FY2015. It's average CAPEX/Revenue for the last three years was 2.9%.
Return on investment
The company operates at negative ROIC (-17.36%) and ROE (-44.13%). ROIC increased on 5.9 pp from -23.2% to -17.4% in FY2015. ROE dropped on 20.4 pp from -23.7% to -44.1% in FY2015.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt showed almost no change in FY2015 while cash dropped on 92.6% in FY2015.
Appendix 1: Peers in Basic Materials
Below we provide Cabo Drilling Corp benchmarking against other companies in Basic Materials industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northern Sun Mining Corp ($NSC) | -93.3% | 315.4% | -99.4% | 8,924.9% | |
| Turquoise Hill Resources Ltd ($TRQ) | | | -34.0% | 3,268.9% | -5.8% |
| Asian Mineral Resources Ltd ($ASN) | | | | 859.1% | |
| Ur-Energy Inc ($URE) | | | | 285.4% | |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 27.7% | 8.0% | -4.8% | -1.1% | 10.3% |
|---|
| Cabo Drilling Corp ($CBE) | | 35.8% | -27.8% | -45.9% | -36.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | |
| Franco-Nevada Corp ($FNV) | 84.6% | 86.1% | 85.0% | 83.5% | |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 31.2% | 31.8% | 21.9% | 17.2% | 21.6% |
|---|
| Cabo Drilling Corp ($CBE) | 16.3% | 18.2% | 19.3% | 3.5% | 5.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | |
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | |
| Nevsun Resources Ltd ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 23.3% | 18.5% | 11.5% | 9.8% | 4.0% |
|---|
| Cabo Drilling Corp ($CBE) | 6.1% | 9.8% | 9.3% | -13.6% | -5.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | 3.2% |
| Marlin Gold Mining Ltd ($MLN) | | | | 508.8% | |
| Imperial Metals Corp ($III) | 28.2% | 69.2% | 185.7% | 280.2% | |
| Golden Minerals Co ($AUM) | 462.4% | 36.9% | 16.8% | 212.8% | |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 24.1% | 26.3% | 25.4% | 16.1% | 11.6% |
|---|
| Cabo Drilling Corp ($CBE) | 7.1% | 5.0% | 3.9% | 1.8% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | |
| Nevsun Resources Ltd ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 7.0% | 4.8% | -0.1% | 0.2% | -6.5% |
|---|
| Cabo Drilling Corp ($CBE) | 0.6% | 10.9% | 4.5% | -23.2% | -17.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | |
| Ur-Energy Inc ($URE) | | | | 55.1x | |
| Katanga Mining Ltd ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.7x | 0.9x | -0.6x |
|---|
