Cenovus Energy Inc CAPEX dropped on 44.0% in 2015 and Revenue dropped on 30.4%
11.02.2016 • About Cenovus Energy Inc (
$CVE) • By InTwits
Cenovus Energy Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cenovus Energy Inc doesn't have a profitable business model yet: 2015 ROIC is -0.8%
- Cenovus Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.7%. At the same time it's a lot of higher than industry average of 4.7%.
- CAPEX is quite volatile: 1,815 in 2015, 1,501 in 2014, 962 in 2013, 444 in 2012, 220 in 2011
- The company has unprofitable business model: ROIC is at -0.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cenovus Energy Inc ($CVE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 15,696 | 17,178 | 18,779 | 19,708 | 13,720 | -30.4% |
| Gross Profit | 14,401 | 6,370 | 6,547 | 6,807 | 4,232 | -37.8% |
| SG&A | 295 | 350 | 349 | 358 | 335 | -6.4% |
| EBITDA | 3,607 | 3,627 | 3,985 | 3,364 | 1,946 | -42.2% |
| Net Income | 1,478 | 995 | 662 | 744 | 618 | -16.9% |
Balance Sheet
|
|---|
| Cash | 495 | 1,160 | 2,452 | 883 | 4,105 | 364.9% |
| Short Term Debt | 372 | 386 | 438 | 0 | 0 | |
| Long Term Debt | 3,527 | 4,679 | 4,997 | 5,458 | 6,525 | 19.5% |
Cash flow
|
|---|
| Capex | 2,792 | 3,449 | 3,269 | 3,058 | 1,714 | -44.0% |
Ratios
|
|---|
| Revenue growth | 24.2% | 9.4% | 9.3% | 4.9% | -30.4% | |
| EBITDA growth | 40.2% | 0.6% | 9.9% | -15.6% | -42.2% | |
| Gross Margin | 91.7% | 37.1% | 34.9% | 34.5% | 30.8% | -3.7% |
| EBITDA Margin | 23.0% | 21.1% | 21.2% | 17.1% | 14.2% | -2.9% |
| Net Income Margin | 9.4% | 5.8% | 3.5% | 3.8% | 4.5% | 0.7% |
| SG&A, % of revenue | 1.9% | 2.0% | 1.9% | 1.8% | 2.4% | 0.6% |
| CAPEX, % of revenue | 17.8% | 20.1% | 17.4% | 15.5% | 12.5% | -3.0% |
| ROIC | 15.6% | 12.3% | 11.9% | 7.5% | -0.8% | -8.3% |
| ROE | 16.6% | 10.4% | 6.7% | 7.4% | 5.5% | -1.9% |
| Net Debt/EBITDA | 0.9x | 1.1x | 0.7x | 1.4x | 1.2x | -0.1x |
Revenue and profitability
Cenovus Energy Inc's Revenue dropped on 30.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.8 pp from 10.6% to 14.4% in 2015.
Gross Margin decreased on 3.7 pp from 34.5% to 30.8% in 2015. SG&A as a % of Revenue increased slightly on 0.63 pp from 1.8% to 2.4% in 2015.
Net Income marign increased slightly on 0.73 pp from 3.8% to 4.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 12.5%. Cenovus Energy Inc's CAPEX/Revenue decreased on 7.6 pp from 20.1% in 2012 to 12.5% in 2015. Average CAPEX/Revenue for the last three years was 15.1%.Battling declining revenue Cenovus Energy Inc invested a large share of EBITDA (88.1%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.82%) and low but positive ROE (5.47%). ROIC decreased on 8.3 pp from 7.5% to -0.82% in 2015. ROE decreased slightly on 1.9 pp from 7.4% to 5.5% in 2015.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 1.4x to 1.2x in 2015. Debt surged on 19.5% in 2015 while cash jumped on 365% in 2015.
Management team
Cenovus Energy Inc's CEO Brian C Ferguson is a founder and has spent 8 years at the company. The company's CFO is Ivor M Ruste. Ivor M Ruste has 8 years tenure at the company.
Appendix 1: Peers in Energy
Below you can find Cenovus Energy Inc benchmarking vs. other companies in Energy industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Petro Rio SA ($PRJ) | -36.3% | -32.1% | -34.9% | 10,977.1% | |
| ONEnergy Inc ($OEG) | | | | 6,002.6% | |
| Sterling Resources Ltd ($SLG) | | -94.8% | 4,514.9% | 2,244.4% | |
| Ikkuma Resources Corp ($IKM) | 22.5% | 17.0% | -4.5% | 1,231.1% | |
| Spartan Energy Corp ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 38.1% | 10.4% | 17.1% | 18.5% | -23.2% |
|---|
| Cenovus Energy Inc ($CVE) | | 9.4% | 9.3% | 4.9% | -30.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| TransAlta Renewables Inc ($RNW) | | | 94.4% | 94.5% | 94.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | |
| Freehold Royalties Ltd ($FRU) | 91.7% | 90.4% | 89.0% | 90.2% | |
| MEG Energy Corp ($MEG) | 85.5% | 86.8% | 87.4% | 87.6% | 84.1% |
| NXT Energy Solutions Inc ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 48.6% |
|---|
| Cenovus Energy Inc ($CVE) | 91.7% | 37.1% | 34.9% | 34.5% | 30.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Seven Generations Energy Ltd ($VII) | | 56.9% | 54.0% | 106.0% | |
| Tourmaline Oil Corp ($TOU) | 67.4% | 67.9% | 80.0% | 97.6% | |
| Bonavista Energy Corp ($BNP) | 63.8% | 64.6% | 62.6% | 91.6% | |
| Bellatrix Exploration Ltd ($BXE) | 42.7% | 58.6% | 83.6% | 89.6% | |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 25.5% | 25.7% | 31.1% | 29.6% | 5.9% |
|---|
| Cenovus Energy Inc ($CVE) | 23.0% | 21.1% | 21.2% | 17.1% | 14.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | |
| Petroshale Inc ($PSH) | 30.6% | | 346.6% | 865.9% | |
| Toro Oil & Gas Ltd ($TOO) | 192.4% | 139.0% | 39.2% | 808.7% | |
| Athabasca Oil Corp ($ATH) | 176.2% | 2,426.4% | 596.6% | 504.7% | |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 41.4% |
|---|
| Cenovus Energy Inc ($CVE) | 17.8% | 20.1% | 17.4% | 15.5% | 12.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | |
| Sea Dragon Energy Inc ($SDX) | -10.1% | 8.1% | 21.8% | 32.9% | |
| Raging River Exploration Inc ($RRX) | | | | 29.1% | |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -6.0% |
|---|
| Cenovus Energy Inc ($CVE) | 15.6% | 12.3% | 11.9% | 7.5% | -0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | |
| Lightstream Resources Ltd ($LTS) | | 2.0x | | 27.8x | |
| Petroshale Inc ($PSH) | 0.1x | | | 21.7x | |
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 3.3x |
|---|
| Cenovus Energy Inc ($CVE) | 0.9x | 1.1x | 0.7x | 1.4x | 1.2x |
