Pattern Energy Group Inc CAPEX surged on 218% in 2015 and Revenue jumped on 20.0%
29.02.2016 • About Pattern Energy Group Inc (
$PEG) • By InTwits
Pattern Energy Group Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pattern Energy Group Inc doesn't have a profitable business model yet: 2015 ROIC is 0.7%
- Pattern Energy Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 214.9%. At the same time it's a lot of higher than industry average of 91.1%.
- CAPEX is quite volatile: 380 in 2015, 120 in 2014, 124 in 2013, 641 in 2012, 392 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pattern Energy Group Inc ($PEG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 135.9 | 114.5 | 201.6 | 265.5 | 318.6 | 20.0% |
| Gross Profit | 65.1 | 30.7 | 60.7 | 187.7 | 204.0 | 8.7% |
| SG&A | 9.0 | 11.5 | 13.0 | 28.3 | 37.4 | 32.0% |
| EBITDA | 94.8 | 68.0 | 130.9 | 159.4 | 166.6 | 4.5% |
| Net Income | 8.9 | -6.3 | 17.0 | -31.3 | -32.5 | 4.0% |
Balance Sheet
|
|---|
| Cash | 47.7 | 17.6 | 103.6 | 101.7 | 94.8 | -6.7% |
| Short Term Debt | 80.7 | 137.3 | 48.9 | 159.7 | 399.1 | 149.9% |
| Long Term Debt | 786.8 | 1,153.3 | 1,200.4 | 1,304.2 | 1,371.7 | 5.2% |
Cash flow
|
|---|
| Capex | 392.2 | 641.4 | 123.5 | 119.5 | 380.5 | 218.4% |
Ratios
|
|---|
| Revenue growth | 174.1% | -15.7% | 76.0% | 31.7% | 20.0% | |
| EBITDA growth | 354.1% | -28.3% | 92.4% | 21.8% | 4.5% | |
| Gross Margin | 47.9% | 26.8% | 30.1% | 70.7% | 64.0% | -6.7% |
| EBITDA Margin | 69.8% | 59.4% | 64.9% | 60.0% | 52.3% | -7.8% |
| Net Income Margin | 6.6% | -5.5% | 8.4% | -11.8% | -10.2% | 1.6% |
| SG&A, % of revenue | 6.6% | 10.0% | 6.4% | 10.7% | 11.7% | 1.1% |
| CAPEX, % of revenue | 288.7% | 560.1% | 61.3% | 45.0% | 119.4% | 74.4% |
| ROIC | | 1.2% | 2.6% | 2.5% | 0.7% | -1.7% |
| ROE | | -1.4% | 3.5% | -5.7% | -4.4% | 1.2% |
| Net Debt/EBITDA | 8.6x | 18.7x | 8.8x | 8.5x | 10.1x | 1.5x |
Revenue and profitability
The company's Revenue jumped on 20.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.0 pp from 4.0% to -2.0% in FY2015.
Gross Margin decreased on 6.7 pp from 70.7% to 64.0% in 2015. SG&A as a % of Revenue increased slightly on 1.1 pp from 10.7% to 11.7% in 2015.
Net Income marign increased slightly on 1.6 pp from -11.8% to -10.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 119%. The company showed big decline in CAPEX/Revenue of 441 pp from 560% in 2012 to 119% in 2015. For the last three years the average CAPEX/Revenue was 75.2%.The company has spent a lot to CAPEX (228% of EBITDA) to fuel its growth.
Return on investment
The company operates at low but positive ROIC (0.75%) and negative ROE (-4.44%). ROIC decreased slightly on 1.7 pp from 2.5% to 0.75% in 2015. ROE increased slightly on 1.2 pp from -5.7% to -4.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 10.1x and Debt / EBITDA is 10.6x. Net Debt / EBITDA jumped on 1.5x from 8.5x to 10.1x in 2015. Debt surged on 21.0% in 2015 while cash decreased on 6.7% in 2015.
Management team
Pattern Energy Group Inc's CEO is Michael Morgan Garland "Mike". Michael Morgan Garland "Mike" is a founder and has 5 years tenure at the company.
Appendix 1: Peers in Energy
Below you can find Pattern Energy Group 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 37.9% | 10.4% | 16.2% | 17.6% | -25.6% |
|---|
| Pattern Energy Group Inc ($PEG) | | -15.7% | 76.0% | 31.7% | 20.0% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.6% | 29.6% | 30.5% |
|---|
| Pattern Energy Group Inc ($PEG) | 47.9% | 26.8% | 30.1% | 70.7% | 64.0% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 12.0% |
|---|
| Pattern Energy Group Inc ($PEG) | 69.8% | 59.4% | 64.9% | 60.0% | 52.3% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 47.3% | 39.1% | 48.8% | 22.2% |
|---|
| Pattern Energy Group Inc ($PEG) | 288.7% | 560.1% | 61.3% | 45.0% | 119.4% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.5% | 4.6% | 5.1% | -7.1% |
|---|
| Pattern Energy Group Inc ($PEG) | | 1.2% | 2.6% | 2.5% | 0.7% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.5x |
|---|
| Pattern Energy Group Inc ($PEG) | 8.6x | 18.7x | 8.8x | 8.5x | 10.1x |
