Enbridge Inc Net Debt / EBITDA jumped on 3.4x from 7.3x to 10.6x in 2015 while Revenue dropped on 10.2%
19.02.2016 • About Enbridge Inc (
$ENB) • By InTwits
Enbridge Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Enbridge Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.7%. At the same time it's in pair with industry average of 4.7%.
- CAPEX is quite volatile: 7,273 in 2015, 10,524 in 2014, 8,235 in 2013, 5,194 in 2012, 3,508 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.8%
- It operates with high leverage: Net Debt/EBITDA is 10.6x while industry average is 3.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Enbridge Inc ($ENB) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 27,053 | 24,660 | 32,918 | 37,641 | 33,794 | -10.2% |
| Gross Profit | 5,908 | 5,481 | 6,111 | 8,158 | 8,553 | 4.8% |
| SG&A | 2,281 | 2,739 | 3,014 | 3,281 | 4,248 | 29.5% |
| EBITDA | 3,743 | 2,830 | 2,735 | 4,777 | 3,886 | -18.7% |
| Net Income | 833 | 707 | 629 | 1,405 | 251 | -82.1% |
Balance Sheet
|
|---|
| Cash | 723 | 1,776 | 756 | 1,261 | 1,015 | -19.5% |
| Short Term Debt | 1,004 | 1,714 | 3,523 | 2,552 | 2,950 | 15.6% |
| Long Term Debt | 19,251 | 20,203 | 22,357 | 33,423 | 39,391 | 17.9% |
Cash flow
|
|---|
| Capex | 3,508 | 5,194 | 8,235 | 10,524 | 7,273 | -30.9% |
Ratios
|
|---|
| Revenue growth | 78.8% | -8.8% | 33.5% | 14.3% | -10.2% | |
| EBITDA growth | 57.9% | -24.4% | -3.4% | 74.7% | -18.7% | |
| Gross Margin | 21.8% | 22.2% | 18.6% | 21.7% | 25.3% | 3.6% |
| EBITDA Margin | 13.8% | 11.5% | 8.3% | 12.7% | 11.5% | -1.2% |
| Net Income Margin | 3.1% | 2.9% | 1.9% | 3.7% | 0.7% | -3.0% |
| SG&A, % of revenue | 8.4% | 11.1% | 9.2% | 8.7% | 12.6% | 3.9% |
| CAPEX, % of revenue | 13.0% | 21.1% | 25.0% | 28.0% | 21.5% | -6.4% |
| ROIC | 8.8% | 4.4% | 3.2% | 5.9% | 2.8% | -3.0% |
| ROE | 11.8% | 9.3% | 6.0% | 12.4% | -0.3% | -12.7% |
| Net Debt/EBITDA | 5.2x | 7.1x | 9.2x | 7.3x | 10.6x | 3.4x |
Revenue and profitability
Enbridge Inc's Revenue dropped on 10.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.96 pp from 4.2% to 5.1% in FY2015.
Gross Margin increased on 3.6 pp from 21.7% to 25.3% in 2015. SG&A as a % of Revenue increased on 3.9 pp from 8.7% to 12.6% in 2015.
Net Income marign decreased on 3.0 pp from 3.7% to 0.74% in 2015.
Capital expenditures (CAPEX) and working capital investments
Enbridge Inc's CAPEX/Revenue was 21.5% in 2015. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average CAPEX/Revenue for the last three years was 24.8%.The company has spent a lot to CAPEX (187% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (2.84%) and negative ROE (-0.33%). ROIC decreased on 3.0 pp from 5.9% to 2.8% in 2015. ROE dropped on 12.7 pp from 12.4% to -0.33% in 2015.
Leverage (Debt)
Debt level is 10.6x Net Debt / EBITDA and 10.9x Debt / EBITDA. Net Debt / EBITDA jumped on 3.4x from 7.3x to 10.6x in 2015. Debt surged on 17.7% in 2015 while cash dropped on 19.5% in 2015.
Management team
Albert Monaco "Al" is a the company's CEO. Albert Monaco "Al" has spent 6 years at the company. John Kendall Whelen is a Enbridge Inc's CFO. John Kendall Whelen has spent 4 years at the company.
Appendix 1: Peers in Energy
Below you can find Enbridge 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 38.1% | 10.4% | 16.2% | 18.5% | -25.6% |
|---|
| Enbridge Inc ($ENB) | | -8.8% | 33.5% | 14.3% | -10.2% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 48.6% |
|---|
| Enbridge Inc ($ENB) | 21.8% | 22.2% | 18.6% | 21.7% | 25.3% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 25.5% | 25.7% | 31.1% | 29.6% | 13.0% |
|---|
| Enbridge Inc ($ENB) | 13.8% | 11.5% | 8.3% | 12.7% | 11.5% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 29.5% |
|---|
| Enbridge Inc ($ENB) | 13.0% | 21.1% | 25.0% | 28.0% | 21.5% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.6% | 5.0% | -6.0% |
|---|
| Enbridge Inc ($ENB) | 8.8% | 4.4% | 3.2% | 5.9% | 2.8% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.3x |
|---|
| Enbridge Inc ($ENB) | 5.2x | 7.1x | 9.2x | 7.3x | 10.6x |
