Peyto Exploration & Development Corp reports 47.5% Net Income decline and 1.7 pp EBITDA Margin decline from 86.3% to 84.6%
02.03.2016 • About Peyto Exploration & Development Corp (
$PEY) • By InTwits
Peyto Exploration & Development Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Peyto Exploration & Development Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 98.9%. At the same time it's in pair with industry average of 90.0%.
- CAPEX is quite volatile: 475 in 2015, 1,270 in 2014, 598 in 2013, 250 in 2012, 182 in 2011
- The company has business model with low profitability: ROIC is at 8.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Peyto Exploration & Development Corp ($PEY) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 383.5 | 380.6 | 535.4 | 782.5 | 690.8 | -11.7% |
| Gross Profit | 215.7 | 165.8 | 249.0 | 411.3 | 282.2 | -31.4% |
| SG&A | 4.9 | 3.8 | 5.2 | 5.8 | 7.1 | 22.6% |
| EBITDA | 320.7 | 327.8 | 445.3 | 675.2 | 584.6 | -13.4% |
| Net Income | 128.2 | 94.0 | 142.6 | 261.8 | 137.6 | -47.5% |
Balance Sheet
|
|---|
| Cash | 57.2 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 470.0 | 580.0 | 875.0 | 925.0 | 1,045.0 | 13.0% |
Cash flow
|
|---|
| Capex | 382.2 | 429.7 | 578.0 | 690.4 | 593.8 | -14.0% |
Ratios
|
|---|
| Revenue growth | 34.1% | -0.7% | 40.7% | 46.1% | -11.7% | |
| EBITDA growth | 41.6% | 2.2% | 35.8% | 51.6% | -13.4% | |
| Gross Margin | 56.2% | 43.6% | 46.5% | 52.6% | 40.8% | -11.7% |
| EBITDA Margin | 83.6% | 86.1% | 83.2% | 86.3% | 84.6% | -1.7% |
| Net Income Margin | 33.4% | 24.7% | 26.6% | 33.5% | 19.9% | -13.5% |
| SG&A, % of revenue | 1.3% | 1.0% | 1.0% | 0.7% | 1.0% | 0.3% |
| CAPEX, % of revenue | 99.7% | 112.9% | 108.0% | 88.2% | 86.0% | -2.3% |
| ROIC | 12.9% | 8.6% | 10.4% | 15.1% | 8.8% | -6.2% |
| ROE | 13.8% | 8.4% | 11.8% | 19.0% | 8.7% | -10.4% |
| Net Debt/EBITDA | 1.3x | 1.8x | 2.0x | 1.4x | 1.8x | 0.4x |
Revenue and profitability
The company's Revenue dropped on 11.7% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 86.3% to 84.6% in 2015.
Gross Margin dropped on 11.7 pp from 52.6% to 40.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 13.5 pp from 33.5% to 19.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 86.0% in 2015. Peyto Exploration & Development Corp's CAPEX/Revenue dropped on 26.9 pp from 113% in 2012 to 86.0% in 2015. For the last three years the average CAPEX/Revenue was 94.0%.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 low ROIC (8.81%) and ROE (8.66%). ROIC decreased on 6.2 pp from 15.1% to 8.8% in 2015. ROE dropped on 10.4 pp from 19.0% to 8.7% in 2015.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 1.4x to 1.8x in 2015. Debt surged on 13.0% in 2015 while cash didn't change in 2015.
Management team
The company's CEO Darren Gee is a founder and has spent 7 years at the company. Kathy Turgeon is a Peyto Exploration & Development Corp's CFO. Kathy Turgeon has spent 10 years at the company.
Appendix 1: Peers in Energy
Below you can find Peyto Exploration & Development Corp 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.0% | 10.4% | 16.2% | 17.6% | -27.0% |
|---|
| Peyto Exploration & Development Corp ($PEY) | | -0.7% | 40.7% | 46.1% | -11.7% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 29.3% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 56.2% | 43.6% | 46.5% | 52.6% | 40.8% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 11.9% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 83.6% | 86.1% | 83.2% | 86.3% | 84.6% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 47.3% | 39.1% | 47.1% | 21.4% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 99.7% | 112.9% | 108.0% | 88.2% | 86.0% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -6.0% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 12.9% | 8.6% | 10.4% | 15.1% | 8.8% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.3x |
|---|
| Peyto Exploration & Development Corp ($PEY) | 1.3x | 1.8x | 2.0x | 1.4x | 1.8x |
