Emera Inc Debt surged on 18.8% in 2015 and Net Debt / EBITDA surged on 0.5x from 3.8x to 4.3x
12.02.2016 • About Emera Inc (
$EMA) • By InTwits
Emera Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Emera Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.2%. At the same time it's in pair with industry average of 88.7%.
- CAPEX is quite volatile: 79.1 in FY2015, 31.8 in FY2014, 20.9 in FY2013, 24.9 in FY2012, 43.5 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Emera Inc ($EMA) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,064 | 2,059 | 2,230 | 2,939 | 2,789 | -5.1% |
| Gross Profit | 1,072 | 1,137 | 1,260 | 1,615 | 1,578 | -2.3% |
| EBITDA | 581 | 641 | 721 | 1,009 | 860 | -14.8% |
| Net Income | 248 | 232 | 237 | 433 | 428 | -1.2% |
Balance Sheet
|
|---|
| Cash | 77 | 87 | 101 | 221 | 1,073 | 385.5% |
| Short Term Debt | 246 | 458 | 766 | 352 | 1,018 | 189.0% |
| Long Term Debt | 3,274 | 3,257 | 3,364 | 3,660 | 3,751 | 2.5% |
Cash flow
|
|---|
| Capex | 472 | 434 | 317 | 434 | 369 | -14.9% |
Ratios
|
|---|
| Revenue growth | 28.5% | -0.3% | 8.3% | 31.8% | -5.1% | |
| EBITDA growth | 6.8% | 10.4% | 12.5% | 40.0% | -14.8% | |
| Gross Margin | 51.9% | 55.2% | 56.5% | 55.0% | 56.6% | 1.6% |
| EBITDA Margin | 28.1% | 31.1% | 32.3% | 34.3% | 30.8% | -3.5% |
| Net Income Margin | 12.0% | 11.3% | 10.6% | 14.7% | 15.3% | 0.6% |
| CAPEX, % of revenue | 22.9% | 21.1% | 14.2% | 14.8% | 13.2% | -1.5% |
| ROIC | 6.1% | 5.8% | 5.9% | 8.4% | 5.6% | -2.8% |
| ROE | 18.0% | 14.2% | 11.6% | 17.0% | 12.9% | -4.1% |
| Net Debt/EBITDA | 5.9x | 5.7x | 5.6x | 3.8x | 4.3x | 0.5x |
Revenue and profitability
Emera Inc's Revenue decreased on 5.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.2 pp from 2.3% to 3.5% in FY2015.
Gross Margin increased slightly on 1.6 pp from 55.0% to 56.6% in 2015.
Net Income marign increased slightly on 0.59 pp from 14.7% to 15.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
Emera Inc's CAPEX/Revenue was 13.2% in 2015. CAPEX/Revenue decreased on 7.8 pp from 21.1% in 2012 to 13.2% in 2015. For the last three years the average CAPEX/Revenue was 14.1%.
Return on investment
The company operates at good ROE (12.85%) while ROIC is low (5.59%). ROIC decreased on 2.8 pp from 8.4% to 5.6% in 2015. ROE decreased on 4.1 pp from 17.0% to 12.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.3x and Debt / EBITDA is 5.5x. Net Debt / EBITDA jumped on 0.5x from 3.8x to 4.3x in 2015. Debt jumped on 18.8% in 2015 while cash jumped on 385% in 2015.
Management team
The company's CEO is Christopher G Huskilson "Chris". Christopher G Huskilson "Chris" is a founder and has 14 years tenure at the company.
Appendix 1: Peers in Utilities
Below you can find Emera Inc benchmarking vs. other companies in Utilities 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 |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 50.1% | 28.8% | 93.6% | 39.4% | |
| Northland Power Inc ($NPI) | 14.0% | 1.5% | 54.1% | 36.4% | |
| Fortis Inc/Canada ($FTS) | 2.2% | -2.2% | 10.8% | 33.5% | |
| Just Energy Group Inc ($JE) | | -10.1% | 13.4% | 17.4% | 10.2% |
| TransAlta Corp ($TA) | -0.4% | -17.0% | 3.7% | 14.4% | |
| |
|---|
| Median (14 companies) | 12.5% | 0.9% | 11.1% | 11.9% | -10.1% |
|---|
| Emera Inc ($EMA) | | -0.3% | 8.3% | 31.8% | -5.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atco Ltd/Canada ($ACO.X) | 82.3% | 85.6% | 85.1% | 82.3% | |
| Canadian Utilities Ltd ($CU) | 76.5% | 81.0% | 80.8% | 77.7% | |
| Northland Power Inc ($NPI) | 47.7% | 52.5% | 63.7% | 61.8% | |
| Fortis Inc/Canada ($FTS) | 31.9% | 34.6% | 34.4% | 59.3% | |
| Capital Power Corp ($CPX) | 48.9% | 58.9% | 59.8% | 58.4% | |
| |
|---|
| Median (13 companies) | 35.9% | 33.7% | 35.1% | 36.1% | 19.1% |
|---|
| Emera Inc ($EMA) | 51.9% | 55.2% | 56.5% | 55.0% | 56.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boralex Inc ($BLX) | 51.8% | 52.8% | 58.4% | 55.9% | |
| Northland Power Inc ($NPI) | 48.1% | 54.2% | 52.4% | 51.2% | |
| US Geothermal Inc ($GTH) | -84.0% | -129.5% | 52.9% | 49.6% | |
| Canadian Utilities Ltd ($CU) | 42.9% | 45.9% | 45.7% | 47.4% | |
| Atco Ltd/Canada ($ACO.X) | 36.7% | 39.8% | 41.0% | 41.4% | |
| |
|---|
| Median (14 companies) | 31.5% | 27.8% | 34.0% | 32.4% | 13.1% |
|---|
| Emera Inc ($EMA) | 28.1% | 31.1% | 32.3% | 34.3% | 30.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northland Power Inc ($NPI) | 101.7% | 84.0% | 60.2% | 238.7% | |
| Boralex Inc ($BLX) | 17.7% | 5.6% | 62.5% | 85.9% | |
| Canadian Utilities Ltd ($CU) | 43.7% | 70.7% | 66.4% | 58.5% | |
| Atco Ltd/Canada ($ACO.X) | 36.2% | 58.8% | 54.2% | 48.3% | |
| Algonquin Power & Utilities Corp ($AQN) | 22.4% | 21.7% | 23.5% | 45.9% | |
| |
|---|
| Median (14 companies) | 25.1% | 31.6% | 26.8% | 21.2% | 14.1% |
|---|
| Emera Inc ($EMA) | 22.9% | 21.1% | 14.2% | 14.8% | 13.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Keyera Corp ($KEY) | 13.1% | 13.8% | 12.7% | 14.3% | 12.6% |
| Just Energy Group Inc ($JE) | 146.5% | 18.6% | 6.0% | 10.6% | 17.9% |
| Atco Ltd/Canada ($ACO.X) | 11.6% | 10.8% | 10.5% | 9.6% | |
| Canadian Utilities Ltd ($CU) | 10.9% | 10.0% | 9.4% | 9.2% | |
| Northland Power Inc ($NPI) | 6.5% | 6.0% | 7.4% | 7.2% | |
| |
|---|
| Median (14 companies) | 6.7% | 5.3% | 6.1% | 5.4% | 15.3% |
|---|
| Emera Inc ($EMA) | 6.1% | 5.8% | 5.9% | 8.4% | 5.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atlantic Power Corp ($ATP) | 44.8x | 12.6x | 13.0x | 22.4x | |
| Boralex Inc ($BLX) | 5.9x | 6.6x | 7.6x | 12.1x | |
| Northland Power Inc ($NPI) | 5.9x | 6.4x | 5.8x | 6.9x | |
| Fortis Inc/Canada ($FTS) | 5.3x | 5.0x | 5.6x | 6.7x | |
| Just Energy Group Inc ($JE) | 2.5x | 4.3x | 7.4x | 6.4x | 3.9x |
| |
|---|
| Median (14 companies) | 3.4x | 4.9x | 5.3x | 4.8x | 3.4x |
|---|
| Emera Inc ($EMA) | 5.9x | 5.7x | 5.6x | 3.8x | 4.3x |
