Gran Tierra Energy Inc reports 262% EBITDA decline and 98.7 pp EBITDA Margin decline from 23.1% to -75.6%
29.02.2016 • About Gran Tierra Energy Inc (
$GTE) • By InTwits
Gran Tierra Energy Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gran Tierra Energy Inc is a company in decline: 2015 revenue growth was -50.7%, 5 years revenue CAGR was -5.9%
- EBITDA Margin is quite volatile: -75.6% in 2015, 23.1% in 2014, 76.6% in 2013, 70.1% in 2012, 77.6% in 2011
- Gran Tierra Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 56.6%. At the same time it's a lot of higher than industry average of 28.2%.
- CAPEX is quite volatile: 60.4 in FY2015, 80.0 in FY2014, 314 in FY2013, 277 in FY2012, 280 in FY2011
- The company has unprofitable business model: ROIC is at -36.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gran Tierra Energy Inc ($GTE) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 596.4 | 583.1 | 647.0 | 559.4 | 276.0 | -50.7% |
| Gross Profit | 278.6 | 399.3 | 333.9 | 259.6 | -16.1 | -106.2% |
| SG&A | 60.4 | 182.0 | 41.1 | 51.2 | 32.4 | -36.9% |
| EBITDA | 462.9 | 408.7 | 495.7 | 129.1 | -208.8 | -261.8% |
| Net Income | 126.9 | 99.7 | 126.3 | -171.3 | -268.0 | 56.4% |
Balance Sheet
|
|---|
| Cash | 351.7 | 212.6 | 428.8 | 331.8 | 145.3 | -56.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 333.2 | 276.1 | 343.6 | 391.5 | 156.6 | -60.0% |
Ratios
|
|---|
| Revenue growth | 59.8% | -2.2% | 10.9% | -13.5% | -50.7% | |
| EBITDA growth | 69.2% | -11.7% | 21.3% | -74.0% | -261.8% | |
| Gross Margin | 46.7% | 68.5% | 51.6% | 46.4% | -5.8% | -52.3% |
| EBITDA Margin | 77.6% | 70.1% | 76.6% | 23.1% | -75.6% | -98.7% |
| Net Income Margin | 21.3% | 17.1% | 19.5% | -30.6% | -97.1% | -66.5% |
| SG&A, % of revenue | 10.1% | 31.2% | 6.4% | 9.2% | 11.7% | 2.6% |
| CAPEX, % of revenue | 55.9% | 47.3% | 53.1% | 70.0% | 56.8% | -13.2% |
| ROIC | 17.9% | 15.2% | 18.0% | -4.0% | -36.7% | -32.7% |
| ROE | 12.3% | 8.1% | 9.3% | -12.7% | -23.5% | -10.9% |
| Net Debt/EBITDA | -0.8x | -0.5x | -0.9x | -2.6x | | 2.6x |
Revenue and profitability
Gran Tierra Energy Inc's Revenue dropped on 50.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 12.9% to 16.0% in 2015.
Gross Margin dropped on 52.3 pp from 46.4% to -5.8% in 2015. SG&A as a % of Revenue increased on 2.6 pp from 9.2% to 11.7% in 2015.
Net Income marign dropped on 66.5 pp from -30.6% to -97.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 56.8%. Gran Tierra Energy Inc's CAPEX/Revenue increased on 9.4 pp from 47.3% in 2012 to 56.8% in 2015. Average CAPEX/Revenue for the last three years was 60.0%.
Return on investment
The company operates at negative ROIC (-36.70%) and ROE (-23.53%). ROIC dropped on 32.7 pp from -4.0% to -36.7% in 2015. ROE dropped on 10.9 pp from -12.7% to -23.5% in 2015.
Leverage (Debt)
The company has no debt. Cash dropped on 56.2% in 2015.
Management team
Gran Tierra Energy Inc's CEO Gary S Guidry is a founder and has spent 3 years at the company. Gran Tierra Energy Inc's CFO Ryan Ellson has spent 3 years at the company.
Appendix 1: Peers in Energy
Below we provide Gran Tierra Energy Inc 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 37.9% | 10.4% | 17.1% | 18.5% | -24.0% |
|---|
| Gran Tierra Energy Inc ($GTE) | | -2.2% | 10.9% | -13.5% | -50.7% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 30.8% |
|---|
| Gran Tierra Energy Inc ($GTE) | 46.7% | 68.5% | 51.6% | 46.4% | -5.8% |
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 ($BNP) | 63.8% | 64.6% | 62.6% | 91.6% | 54.5% |
| Bellatrix Exploration Ltd ($BXE) | 42.7% | 58.6% | 83.6% | 89.6% | |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 29.6% | 12.8% |
|---|
| Gran Tierra Energy Inc ($GTE) | 77.6% | 70.1% | 76.6% | 23.1% | -75.6% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 50.0% | 39.1% | 47.1% | 22.2% |
|---|
| Gran Tierra Energy Inc ($GTE) | 55.9% | 47.3% | 53.1% | 70.0% | 56.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($PSI) | 33.5% | 30.0% | 29.7% | 41.0% | 6.0% |
| Sea Dragon Energy Inc ($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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.1% | -6.8% |
|---|
| Gran Tierra Energy Inc ($GTE) | 17.9% | 15.2% | 18.0% | -4.0% | -36.7% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 4.1x |
|---|
| Gran Tierra Energy Inc ($GTE) | -0.8x | -0.5x | -0.9x | -2.6x | |
