Caribbean Utilities Co Ltd CAPEX surged on 97.5% in 2015 while Revenue dropped on 18.5%
18.02.2016 • About Caribbean Utilities Co Ltd (
$CUP.U) • By InTwits
Caribbean Utilities Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Caribbean Utilities Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.6%. At the same time it's a lot of higher than industry average of 28.2%.
- CAPEX is quite volatile: 77.9 in 2015, 39.5 in 2014, 29.3 in 2013, 30.8 in 2012, 39.6 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Caribbean Utilities Co Ltd ($CUP.U) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 218.1 | 223.5 | 226.2 | 231.7 | 188.9 | -18.5% |
| Gross Profit | 43.8 | 40.8 | 41.6 | 43.2 | 69.9 | 61.8% |
| SG&A | | | | | 9.1 | |
| EBITDA | 45.9 | 45.7 | 49.8 | 49.7 | 51.7 | 4.1% |
| Net Income | 20.4 | 17.7 | 20.4 | 20.8 | 22.8 | 9.7% |
Balance Sheet
|
|---|
| Cash | 0.4 | 0.7 | 1.2 | 21.8 | 1.4 | -93.7% |
| Short Term Debt | 22.6 | 56.7 | 18.3 | 14.0 | 15.7 | 12.4% |
| Long Term Debt | 188.5 | 169.0 | 202.0 | 236.4 | 222.6 | -5.9% |
Cash flow
|
|---|
| Capex | 39.6 | 30.8 | 29.3 | 39.5 | 77.9 | 97.5% |
Ratios
|
|---|
| Revenue growth | 21.1% | 2.5% | 1.2% | 2.4% | -18.5% | |
| EBITDA growth | -0.8% | -0.5% | 9.0% | -0.2% | 4.1% | |
| Gross Margin | 20.1% | 18.2% | 18.4% | 18.7% | 37.0% | 18.4% |
| EBITDA Margin | 21.0% | 20.4% | 22.0% | 21.4% | 27.4% | 5.9% |
| Net Income Margin | 9.3% | 7.9% | 9.0% | 9.0% | 12.1% | 3.1% |
| SG&A, % of revenue | | | | | 4.8% | 4.8% |
| CAPEX, % of revenue | 18.2% | 13.8% | 13.0% | 17.0% | 41.3% | 24.2% |
| ROIC | 6.6% | 5.8% | 6.3% | 6.1% | 5.7% | -0.4% |
| ROE | 11.2% | 9.7% | 11.1% | 11.1% | 11.1% | 0.0% |
| Net Debt/EBITDA | 4.6x | 4.9x | 4.4x | 4.6x | 4.6x | -0.0x |
Revenue and profitability
The company's Revenue dropped on 18.5% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.9 pp from 21.4% to 27.4% in 2015.
Gross Margin jumped on 18.4 pp from 18.7% to 37.0% in 2015.
Net Income marign increased on 3.1 pp from 9.0% to 12.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
Caribbean Utilities Co Ltd's CAPEX/Revenue was 41.3% in 2015. The company showed fast CAPEX/Revenue growth of 27.5 pp from 13.8% in 2012 to 41.3% in 2015. For the last three years the average CAPEX/Revenue was 23.8%.The company has spent a lot to CAPEX (151% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.70%) and ROE (11.11%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 4.6x Net Debt / EBITDA and 4.6x Debt / EBITDA. Net Debt / EBITDA decreased slightly on 0.018x from 4.6x to 4.6x in 2015. Debt decreased on 4.8% in 2015 while cash dropped on 93.7% in 2015.
Appendix 1: Peers in Utilities
Below you can find Caribbean Utilities Co Ltd 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 ($FTS) | | -2.2% | 10.8% | 33.5% | 25.1% |
| Emera Inc ($EMA) | | -0.3% | 8.3% | 31.8% | -5.1% |
| Just Energy Group Inc ($JE) | | -10.1% | 13.4% | 17.4% | 10.2% |
| |
|---|
| Median (14 companies) | 14.2% | 0.1% | 11.1% | 13.3% | -2.0% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | | 2.5% | 1.2% | 2.4% | -18.5% |
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% | 61.7% |
| Capital Power Corp ($CPX) | 48.9% | 58.9% | 59.8% | 58.4% | 61.4% |
| |
|---|
| Median (13 companies) | 42.7% | 34.6% | 37.1% | 55.0% | 56.1% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 20.1% | 18.2% | 18.4% | 18.7% | 37.0% |
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 ($ACO.X) | 36.7% | 39.8% | 41.0% | 41.4% | |
| |
|---|
| Median (14 companies) | 31.5% | 29.7% | 34.0% | 34.0% | 32.0% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 21.0% | 20.4% | 22.0% | 21.4% | 27.4% |
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 ($AQN) | 22.4% | 21.7% | 23.5% | 45.9% | |
| |
|---|
| Median (14 companies) | 25.4% | 31.6% | 26.8% | 21.2% | 17.1% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 18.2% | 13.8% | 13.0% | 17.0% | 41.3% |
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% | |
| Emera Inc ($EMA) | 6.1% | 5.8% | 5.9% | 8.4% | 5.6% |
| |
|---|
| Median (14 companies) | 6.6% | 5.4% | 6.0% | 5.4% | 5.8% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 6.6% | 5.8% | 6.3% | 6.1% | 5.7% |
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 | 5.3x |
| Just Energy Group Inc ($JE) | 2.5x | 4.3x | 7.4x | 6.4x | 3.9x |
| |
|---|
| Median (14 companies) | 3.4x | 5.0x | 5.6x | 4.5x | 4.1x |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 4.6x | 4.9x | 4.4x | 4.6x | 4.6x |
