Trinidad Drilling Ltd reports 187% EBITDA decline and 41.4% Revenue decline
02.03.2016 • About Trinidad Drilling Ltd (
$TDG) • By InTwits
Trinidad Drilling Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trinidad Drilling Ltd is a company in decline: 2015 revenue growth was -41.4%, 5 years revenue CAGR was -3.8%
- EBITDA Margin is quite volatile: -28.4% in 2015, 19.1% in 2014, 30.4% in 2013, 23.8% in 2012, 29.9% in 2011
- Trinidad Drilling Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.9%. At the same time it's a lot of higher than industry average of 6.7%.
- CAPEX is quite volatile: 140 in 2015, 277 in 2014, 90.3 in 2013, 186 in 2012, 182 in 2011
- The company has unprofitable business model: ROIC is at -14.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trinidad Drilling Ltd ($TDG) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 818.2 | 859.3 | 845.9 | 941.3 | 551.9 | -41.4% |
| Gross Profit | 308.5 | 329.2 | 329.8 | 315.2 | 222.2 | -29.5% |
| SG&A | 61.1 | 57.5 | 71.0 | 65.6 | 62.9 | -4.1% |
| EBITDA | 244.3 | 204.6 | 257.3 | 180.2 | -156.7 | -186.9% |
| Net Income | 76.5 | 55.0 | 71.0 | 6.6 | -218.4 | -3,410.3% |
Balance Sheet
|
|---|
| Cash | 0.0 | 4.9 | 268.2 | 71.1 | 63.7 | -10.4% |
| Short Term Debt | 5.2 | 0.6 | 0.0 | 0.0 | 2.6 | |
| Long Term Debt | 580.2 | 509.2 | 468.7 | 527.8 | 704.3 | 33.4% |
Cash flow
|
|---|
| Capex | 182.2 | 185.7 | 90.3 | 276.6 | 140.0 | -49.4% |
Ratios
|
|---|
| Revenue growth | 22.2% | 5.0% | -1.6% | 11.3% | -41.4% | |
| EBITDA growth | 108.9% | -16.3% | 25.8% | -30.0% | -186.9% | |
| Gross Margin | 37.7% | 38.3% | 39.0% | 33.5% | 40.3% | 6.8% |
| EBITDA Margin | 29.9% | 23.8% | 30.4% | 19.1% | -28.4% | -47.5% |
| Net Income Margin | 9.3% | 6.4% | 8.4% | 0.7% | -39.6% | -40.3% |
| SG&A, % of revenue | 7.5% | 6.7% | 8.4% | 7.0% | 11.4% | 4.4% |
| CAPEX, % of revenue | 22.3% | 21.6% | 10.7% | 29.4% | 25.4% | -4.0% |
| ROIC | 8.9% | 6.1% | 9.0% | 3.2% | -14.5% | -17.8% |
| ROE | 9.4% | 6.5% | 7.2% | 0.6% | -17.8% | -18.4% |
| Net Debt/EBITDA | 2.4x | 2.5x | 0.8x | 2.5x | | -2.5x |
Revenue and profitability
The company's Revenue dropped on 41.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 47.5 pp from 19.1% to -28.4% in 2015.
Gross Margin increased on 6.8 pp from 33.5% to 40.3% in 2015. SG&A as a % of Revenue increased on 4.4 pp from 7.0% to 11.4% in 2015.
Net Income marign dropped on 40.3 pp from 0.70% to -39.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 25.4%. The company showed CAPEX/Revenue growth of 3.8 pp from 21.6% in 2012 to 25.4% in 2015. Average CAPEX/Revenue for the last three years was 21.8%.
Return on investment
The company operates at negative ROIC (-14.55%) and ROE (-17.79%). ROIC dropped on 17.8 pp from 3.2% to -14.5% in 2015. ROE dropped on 18.4 pp from 0.59% to -17.8% in 2015.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 2.5x from 2.5x to in 2015. Debt jumped on 33.9% in 2015 while cash dropped on 10.4% in 2015.
Appendix 1: Peers in Energy
Below we provide Trinidad Drilling 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.0% | 10.4% | 17.1% | 18.5% | -25.6% |
|---|
| Trinidad Drilling Ltd ($TDG) | | 5.0% | -1.6% | 11.3% | -41.4% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 29.3% |
|---|
| Trinidad Drilling Ltd ($TDG) | 37.7% | 38.3% | 39.0% | 33.5% | 40.3% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.7% | 31.1% | 29.6% | 12.4% |
|---|
| Trinidad Drilling Ltd ($TDG) | 29.9% | 23.8% | 30.4% | 19.1% | -28.4% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 21.4% |
|---|
| Trinidad Drilling Ltd ($TDG) | 22.3% | 21.6% | 10.7% | 29.4% | 25.4% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.1% | -4.3% |
|---|
| Trinidad Drilling Ltd ($TDG) | 8.9% | 6.1% | 9.0% | 3.2% | -14.5% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.3x |
|---|
| Trinidad Drilling Ltd ($TDG) | 2.4x | 2.5x | 0.8x | 2.5x | |
