Northland Power Inc Net Debt / EBITDA surged on 4.3x from 6.9x to 11.1x in 2015 and Debt surged on 67.8%
24.02.2016 • About Northland Power Inc (
$NPI) • By InTwits
Northland Power Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Northland Power Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 150.1%. At the same time it's a lot of higher than industry average of 48.2%.
- CAPEX is quite volatile: 1,936 in 2015, 1,815 in 2014, 335 in 2013, 304 in 2012, 362 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.3%
- It operates with high leverage: Net Debt/EBITDA is 11.1x while industry average is 6.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Northland Power Inc ($NPI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 356.2 | 361.7 | 557.2 | 760.1 | 728.1 | -4.2% |
| Gross Profit | 169.8 | 189.8 | 354.8 | 469.4 | 502.4 | 7.0% |
| SG&A | 22.0 | 27.5 | 33.1 | 41.3 | 41.8 | 1.3% |
| EBITDA | 171.5 | 196.2 | 292.1 | 388.8 | 418.4 | 7.6% |
| Net Income | -63.1 | -9.9 | 151.1 | -106.6 | 1.1 | -101.1% |
Balance Sheet
|
|---|
| Cash | 49.5 | 31.7 | 138.5 | 193.4 | 151.9 | -21.4% |
| Short Term Debt | 84.6 | 41.1 | 59.2 | 240.6 | 78.6 | -67.3% |
| Long Term Debt | 975.3 | 1,251.8 | 1,778.4 | 2,629.3 | 4,735.7 | 80.1% |
Cash flow
|
|---|
| Capex | 362.3 | 303.7 | 335.3 | 1,814.6 | 1,936.4 | 6.7% |
Ratios
|
|---|
| Revenue growth | 14.0% | 1.5% | 54.1% | 36.4% | -4.2% | |
| EBITDA growth | 2.8% | 14.4% | 48.9% | 33.1% | 7.6% | |
| Gross Margin | 47.7% | 52.5% | 63.7% | 61.8% | 69.0% | 7.2% |
| EBITDA Margin | 48.1% | 54.2% | 52.4% | 51.2% | 57.5% | 6.3% |
| Net Income Margin | -17.7% | -2.7% | 27.1% | -14.0% | 0.2% | 14.2% |
| SG&A, % of revenue | 6.2% | 7.6% | 5.9% | 5.4% | 5.7% | 0.3% |
| CAPEX, % of revenue | 101.7% | 84.0% | 60.2% | 238.7% | 265.9% | 27.2% |
| ROIC | 6.5% | 6.0% | 7.4% | 7.2% | 5.3% | -1.9% |
| ROE | -23.8% | -4.4% | 26.0% | -20.3% | -1.9% | 18.4% |
| Net Debt/EBITDA | 5.9x | 6.4x | 5.8x | 6.9x | 11.1x | 4.3x |
Revenue and profitability
The company's Revenue decreased on 4.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.3 pp from 51.2% to 57.5% in 2015.
Gross Margin increased on 7.2 pp from 61.8% to 69.0% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign surged on 14.2 pp from -14.0% to 0.16% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 266% in 2015. Northland Power Inc showed fast CAPEX/Revenue growth of 182 pp from 84.0% in 2012 to 266% in 2015. Average CAPEX/Revenue for the last three years was 188%.Battling declining revenue the company made large investments to CAPEX (463% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (5.34%) and negative ROE (-1.85%). ROIC decreased slightly on 1.9 pp from 7.2% to 5.3% in 2015. ROE jumped on 18.4 pp from -20.3% to -1.9% in 2015.
Leverage (Debt)
Debt level is 11.1x Net Debt / EBITDA and 11.5x Debt / EBITDA. Net Debt / EBITDA surged on 4.3x from 6.9x to 11.1x in 2015. Debt jumped on 67.8% in 2015 while cash dropped on 21.4% in 2015.
Management team
John W Brace is a Northland Power Inc's CEO. John W Brace is a founder and has spent 9 years at the company. Northland Power Inc's CFO Paul J Bradley has spent 7 years at the company.
Appendix 1: Peers in Utilities
Below you can find Northland Power 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 ($AQN) | 50.1% | 28.8% | 93.6% | 39.4% | |
| Fortis Inc/Canada ($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% |
| TransAlta Corp ($TA) | | -17.0% | 3.7% | 14.4% | -13.6% |
| |
|---|
| Median (14 companies) | 12.8% | 0.1% | 10.9% | 11.9% | -2.0% |
|---|
| Northland Power Inc ($NPI) | | 1.5% | 54.1% | 36.4% | -4.2% |
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% | |
| 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% |
| TransAlta Corp ($TA) | 64.4% | 65.9% | 58.6% | 58.4% | 55.5% |
| |
|---|
| Median (13 companies) | 35.9% | 33.7% | 35.1% | 36.1% | 56.1% |
|---|
| Northland Power Inc ($NPI) | 47.7% | 52.5% | 63.7% | 61.8% | 69.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boralex Inc ($BLX) | 51.8% | 52.8% | 58.4% | 55.9% | 60.4% |
| US Geothermal Inc ($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% | |
| TransAlta Corp ($TA) | 44.2% | 27.3% | 34.0% | 39.5% | 33.2% |
| |
|---|
| Median (14 companies) | 29.6% | 27.8% | 33.2% | 32.4% | 32.0% |
|---|
| Northland Power Inc ($NPI) | 48.1% | 54.2% | 52.4% | 51.2% | 57.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boralex Inc ($BLX) | 17.7% | 5.6% | 62.5% | 85.9% | 123.1% |
| Canadian Utilities Ltd ($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% | |
| Fortis Inc/Canada ($FTS) | 29.8% | 31.4% | 29.0% | 31.9% | 31.5% |
| |
|---|
| Median (14 companies) | 22.7% | 26.5% | 24.0% | 19.6% | 24.5% |
|---|
| Northland Power Inc ($NPI) | 101.7% | 84.0% | 60.2% | 238.7% | 265.9% |
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 ($EMA) | 6.1% | 5.8% | 5.9% | 8.4% | 5.6% |
| |
|---|
| Median (14 companies) | 6.7% | 5.3% | 6.0% | 5.4% | 5.6% |
|---|
| Northland Power Inc ($NPI) | 6.5% | 6.0% | 7.4% | 7.2% | 5.3% |
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 | 9.0x |
| 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 |
| US Geothermal Inc ($GTH) | | | 5.2x | 5.6x | |
| |
|---|
| Median (14 companies) | 3.4x | 4.9x | 5.3x | 4.3x | 4.4x |
|---|
| Northland Power Inc ($NPI) | 5.9x | 6.4x | 5.8x | 6.9x | 11.1x |
