Perpetual Energy Inc EBITDA Margin surged on 52.3 pp from 58.0% to 110% in 2015 while Revenue dropped on 44.1%
02.03.2016 • About Perpetual Energy Inc (
$PMT) • By InTwits
Perpetual Energy Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Perpetual Energy Inc is a company in decline: 2015 revenue growth was -44.1%, 5 years revenue CAGR was -12.0%
- EBITDA Margin is quite volatile: 110.3% in 2015, 58.0% in 2014, 70.7% in 2013, 35.5% in 2012, 26.1% in 2011
- Perpetual Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 53.8%. At the same time it's a lot of higher than industry average of 28.7%.
- CAPEX is quite volatile: 37.6 in 2015, 39.9 in 2014, 44.0 in 2013, 33.2 in 2012, 278 in 2011
- The company has highly profitable business model: ROIC is at 16.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Perpetual Energy Inc ($PMT) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 232.4 | 170.2 | 191.2 | 239.7 | 133.9 | -44.1% |
| Gross Profit | 16.1 | -25.9 | 12.7 | 54.1 | -31.7 | -158.6% |
| SG&A | 37.9 | 31.5 | 28.5 | 28.3 | 21.2 | -25.1% |
| EBITDA | 60.6 | 60.5 | 135.2 | 138.9 | 147.6 | 6.3% |
| Net Income | -100.2 | -76.0 | 7.6 | 3.4 | -89.3 | -2,752.2% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 11.5 | 2.1 | -81.6% |
| Short Term Debt | 74.3 | 0.0 | 70.6 | 0.0 | 42.0 | |
| Long Term Debt | 279.1 | 376.8 | 302.2 | 270.7 | 271.7 | 0.4% |
Cash flow
|
|---|
| Capex | 154.8 | 79.7 | 95.5 | 116.4 | 76.3 | -34.4% |
Ratios
|
|---|
| Revenue growth | -8.4% | -26.8% | 12.3% | 25.4% | -44.1% | |
| EBITDA growth | -70.3% | -0.3% | 123.6% | 2.7% | 6.3% | |
| Gross Margin | 6.9% | -15.2% | 6.6% | 22.6% | -23.7% | -46.2% |
| EBITDA Margin | 26.1% | 35.5% | 70.7% | 58.0% | 110.3% | 52.3% |
| Net Income Margin | -43.1% | -44.6% | 4.0% | 1.4% | -66.7% | -68.1% |
| SG&A, % of revenue | 16.3% | 18.5% | 14.9% | 11.8% | 15.9% | 4.0% |
| CAPEX, % of revenue | 66.6% | 46.8% | 50.0% | 48.6% | 57.0% | 8.4% |
| ROIC | -10.6% | -10.1% | 9.1% | 10.4% | 16.1% | 5.7% |
| ROE | -71.3% | -92.7% | 8.2% | 3.3% | -116.3% | -119.6% |
| Net Debt/EBITDA | 5.8x | 6.2x | 2.8x | 1.9x | 2.1x | 0.2x |
Revenue and profitability
Perpetual Energy Inc's Revenue dropped on 44.1% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 52.3 pp from 58.0% to 110% in 2015.
Gross Margin dropped on 46.2 pp from 22.6% to -23.7% in 2015. SG&A as a % of Revenue increased on 4.0 pp from 11.8% to 15.9% in 2015.
Net Income marign dropped on 68.1 pp from 1.4% to -66.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Perpetual Energy Inc had CAPEX/Revenue of 57.0%. Perpetual Energy Inc showed fast CAPEX/Revenue growth of 10.2 pp from 46.8% in 2012 to 57.0% in 2015. Average CAPEX/Revenue for the last three years was 51.9%.Battling declining revenue the company invested a large share of EBITDA (51.7%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (16.07%) and negative ROE (-116.34%). ROIC increased on 5.7 pp from 10.4% to 16.1% in 2015. ROE dropped on 120 pp from 3.3% to -116% in 2015.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 1.9x to 2.1x in 2015. Debt surged on 15.9% in 2015 while cash dropped on 81.6% in 2015.
Management team
Susan L Riddell Rose is a Perpetual Energy Inc's CEO. Susan L Riddell Rose is a founder and has spent 16 years at the company.
Appendix 1: Peers in Energy
Below you can find Perpetual Energy 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.0% | 10.4% | 17.1% | 17.6% | -25.6% |
|---|
| Perpetual Energy Inc ($PMT) | | -26.8% | 12.3% | 25.4% | -44.1% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 29.9% |
|---|
| Perpetual Energy Inc ($PMT) | 6.9% | -15.2% | 6.6% | 22.6% | -23.7% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 11.9% |
|---|
| Perpetual Energy Inc ($PMT) | 26.1% | 35.5% | 70.7% | 58.0% | 110.3% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 50.0% | 39.1% | 47.3% | 21.4% |
|---|
| Perpetual Energy Inc ($PMT) | 66.6% | 46.8% | 50.0% | 48.6% | 57.0% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.5% | 4.5% | 5.0% | -6.0% |
|---|
| Perpetual Energy Inc ($PMT) | -10.6% | -10.1% | 9.1% | 10.4% | 16.1% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.3x |
|---|
| Perpetual Energy Inc ($PMT) | 5.8x | 6.2x | 2.8x | 1.9x | 2.1x |
