Enerplus Corp reports 609% Net Income decline and 23.4% Revenue decline
19.02.2016 • About Enerplus Corp (
$ERF) • By InTwits
Enerplus Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Enerplus Corp doesn't have a profitable business model yet: 2015 ROIC is -55.5%
- The company operates at negative EBITDA Margin: -67.4%
- EBITDA Margin is quite volatile: -67.4% in 2015, 58.4% in 2014, 63.5% in 2013, -5.8% in 2012, 59.4% in 2011
- Enerplus Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 71.9%. At the same time it's in pair with industry average of 92.8%.
- CAPEX is quite volatile: 140 in 2015, 220 in 2014, 943 in 2013, 598 in 2012, 493 in 2011
- The company has unprofitable business model: ROIC is at -55.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Enerplus Corp ($ERF) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,118 | 1,153 | 1,352 | 1,530 | 1,172 | -23.4% |
| Gross Profit | 817 | 808 | 969 | 998 | 666 | -33.3% |
| SG&A | 94 | 94 | 110 | 105 | 104 | -1.1% |
| EBITDA | 665 | -67 | 859 | 893 | -790 | -188.5% |
| Net Income | 109 | -271 | 48 | 299 | -1,523 | -609.4% |
Balance Sheet
|
|---|
| Cash | 6 | 5 | 3 | 2 | 7 | 268.3% |
| Short Term Debt | 47 | 46 | 49 | 99 | 0 | -100.0% |
| Long Term Debt | 860 | 1,024 | 977 | 1,038 | 1,224 | 17.9% |
Cash flow
|
|---|
| Capex | 1,132 | 1,051 | 933 | 836 | 507 | -39.3% |
Ratios
|
|---|
| Revenue growth | 1.3% | 3.1% | 17.3% | 13.1% | -23.4% | |
| EBITDA growth | 245.1% | -110.1% | -1,377.9% | 4.0% | -188.5% | |
| Gross Margin | 73.0% | 70.0% | 71.7% | 65.3% | 56.8% | -8.4% |
| EBITDA Margin | 59.4% | -5.8% | 63.5% | 58.4% | -67.4% | -125.8% |
| Net Income Margin | 9.8% | -23.5% | 3.5% | 19.6% | -130.0% | -149.5% |
| SG&A, % of revenue | 8.4% | 8.1% | 8.2% | 6.9% | 8.9% | 2.0% |
| CAPEX, % of revenue | 101.2% | 91.1% | 69.0% | 54.7% | 43.3% | -11.4% |
| ROIC | 5.0% | -17.3% | 10.2% | 11.5% | -55.5% | -67.1% |
| ROE | 3.3% | -10.4% | 2.5% | 14.4% | -97.6% | -112.0% |
| Net Debt/EBITDA | 1.4x | | 1.2x | 1.3x | | -1.3x |
Revenue and profitability
Enerplus Corp's Revenue dropped on 23.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.57 pp from 7.2% to 7.8% in 2015.
Gross Margin decreased on 8.4 pp from 65.3% to 56.8% in 2015. SG&A as a % of Revenue increased slightly on 2.0 pp from 6.9% to 8.9% in 2015.
Net Income marign dropped on 150 pp from 19.6% to -130% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 43.3% in 2015. The company showed big decline in CAPEX/Revenue of 47.8 pp from 91.1% in 2012 to 43.3% in 2015. It's average CAPEX/Revenue for the last three years was 55.6%.
Return on investment
The company operates at negative ROIC (-55.52%) and ROE (-97.63%). ROIC dropped on 67.1 pp from 11.5% to -55.5% in 2015. ROE dropped on 112 pp from 14.4% to -97.6% in 2015.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 1.3x to in 2015. Debt increased on 7.6% in 2015 while cash jumped on 268% in 2015.
Management team
Ian C Dundas is a the company's CEO. Ian C Dundas is a founder and has spent 5 years at the company. The company's CFO is Jodine J Jenson Labrie. Jodine J Jenson Labrie has 3 years tenure at the company.
Appendix 1: Peers in Energy
Below we provide Enerplus Corp benchmarking against other companies in Energy 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 |
|---|
| 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 38.1% | 10.4% | 16.2% | 18.5% | -25.6% |
|---|
| Enerplus Corp ($ERF) | | 3.1% | 17.3% | 13.1% | -23.4% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 44.3% |
|---|
| Enerplus Corp ($ERF) | 73.0% | 70.0% | 71.7% | 65.3% | 56.8% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.7% | 30.5% | 28.9% | 13.0% |
|---|
| Enerplus Corp ($ERF) | 59.4% | -5.8% | 63.5% | 58.4% | -67.4% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 47.3% | 39.1% | 47.1% | 22.8% |
|---|
| Enerplus Corp ($ERF) | 101.2% | 91.1% | 69.0% | 54.7% | 43.3% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.5% | 4.5% | 5.0% | -2.5% |
|---|
| Enerplus Corp ($ERF) | 5.0% | -17.3% | 10.2% | 11.5% | -55.5% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 4.0x |
|---|
| Enerplus Corp ($ERF) | 1.4x | | 1.2x | 1.3x | |
