Trican Well Service Ltd Net Debt / EBITDA jumped on 28.6x from 2.9x to 31.4x in 2015 while Debt dropped on 26.9%
24.02.2016 • About Trican Well Service Ltd (
$TCW) • By InTwits
Trican Well Service Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trican Well Service Ltd is a company in decline: 2015 revenue growth was -73.0%, 5 years revenue CAGR was -15.2%
- EBITDA Margin is quite volatile: 2.6% in 2015, 10.3% in 2014, 8.5% in 2013, 10.8% in 2012, 26.7% in 2011
- Trican Well Service Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.3%. At the same time it's a lot of higher than industry average of 8.9%.
- CAPEX is quite volatile: 17.1 in 2015, 90.0 in 2014, 108 in 2013, 445 in 2012, 578 in 2011
- The company has unprofitable business model: ROIC is at -3.6%
- It operates with high leverage: Net Debt/EBITDA is 31.4x while industry average is 3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trican Well Service Ltd ($TCW) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,310 | 2,213 | 2,115 | 2,407 | 650 | -73.0% |
| Gross Profit | 590 | 196 | 72 | 151 | -27 | -117.7% |
| SG&A | 103 | 108 | 115 | 110 | 32 | -71.0% |
| EBITDA | 617 | 240 | 179 | 247 | 17 | -93.2% |
| Net Income | 339 | 54 | -46 | -5 | -828 | 16,307.8% |
Balance Sheet
|
|---|
| Cash | 126 | 114 | 64 | 82 | 49 | -40.4% |
| Short Term Debt | 25 | 9 | 80 | 30 | 107 | 261.8% |
| Long Term Debt | 400 | 695 | 594 | 759 | 469 | -38.1% |
Cash flow
|
|---|
| Capex | 578 | 445 | 108 | 90 | 17 | -81.0% |
Ratios
|
|---|
| Revenue growth | 56.2% | -4.2% | -4.4% | 13.8% | -73.0% | |
| EBITDA growth | 85.0% | -61.1% | -25.1% | 37.6% | -93.2% | |
| Gross Margin | 25.6% | 8.8% | 3.4% | 6.3% | -4.1% | -10.4% |
| EBITDA Margin | 26.7% | 10.8% | 8.5% | 10.3% | 2.6% | -7.7% |
| Net Income Margin | 14.7% | 2.4% | -2.2% | -0.2% | -127.4% | -127.2% |
| SG&A, % of revenue | 4.4% | 4.9% | 5.4% | 4.6% | 4.9% | 0.3% |
| CAPEX, % of revenue | 25.0% | 20.1% | 5.1% | 3.7% | 2.6% | -1.1% |
| ROIC | 32.3% | 3.9% | -1.9% | 1.9% | -3.6% | -5.5% |
| ROE | 28.6% | 3.9% | -3.4% | -0.4% | -90.0% | -89.6% |
| Net Debt/EBITDA | 0.5x | 2.5x | 3.4x | 2.9x | 31.4x | 28.6x |
Revenue and profitability
The company's Revenue dropped on 73.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 52.8 pp from -62.6% to -9.8% in 2015.
Gross Margin dropped on 10.4 pp from 6.3% to -4.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 127 pp from -0.21% to -127% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Trican Well Service Ltd had CAPEX/Revenue of 2.6%. Trican Well Service Ltd's CAPEX/Revenue dropped on 17.4 pp from 20.1% in 2012 to 2.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 3.8%.Battling declining revenue the company made large investments to CAPEX (102% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-3.58%) and ROE (-90.03%). ROIC decreased on 5.5 pp from 1.9% to -3.6% in 2015. ROE dropped on 89.6 pp from -0.38% to -90.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 31.4x and Debt / EBITDA is 34.3x. Net Debt / EBITDA jumped on 28.6x from 2.9x to 31.4x in 2015. Debt dropped on 26.9% in 2015 while cash dropped on 40.4% in 2015.
Management team
Trican Well Service Ltd's CEO Dale M Dusterhoft is a founder and has spent 9 years at the company. Michael A Baldwin is a Trican Well Service Ltd's CFO. Michael A Baldwin has spent 10 years at the company.
Appendix 1: Peers in Energy
Below we provide Trican Well Service Ltd 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 38.0% | 10.4% | 17.1% | 18.5% | -24.5% |
|---|
| Trican Well Service Ltd ($TCW) | | -4.2% | -4.4% | 13.8% | -73.0% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 37.2% |
|---|
| Trican Well Service Ltd ($TCW) | 25.6% | 8.8% | 3.4% | 6.3% | -4.1% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.7% | 31.1% | 29.6% | 5.2% |
|---|
| Trican Well Service Ltd ($TCW) | 26.7% | 10.8% | 8.5% | 10.3% | 2.6% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 21.4% |
|---|
| Trican Well Service Ltd ($TCW) | 25.0% | 20.1% | 5.1% | 3.7% | 2.6% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.6% | 5.1% | -7.5% |
|---|
| Trican Well Service Ltd ($TCW) | 32.3% | 3.9% | -1.9% | 1.9% | -3.6% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 4.8x |
|---|
| Trican Well Service Ltd ($TCW) | 0.5x | 2.5x | 3.4x | 2.9x | 31.4x |
