Whitecap Resources Inc reports 210% Net Income decline and 2.8 pp EBITDA Margin decline from 72.5% to 69.7%
02.03.2016 • About Whitecap Resources Inc (
$WCP) • By InTwits
Whitecap Resources Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Whitecap Resources Inc doesn't have a profitable business model yet: 2015 ROIC is -10.6%
- Whitecap Resources Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 128.7%. At the same time it's a lot of higher than industry average of 90.0%.
- CAPEX is quite volatile: 475 in 2015, 1,270 in 2014, 598 in 2013, 250 in 2012, 182 in 2011
- The company has unprofitable business model: ROIC is at -10.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Whitecap Resources Inc ($WCP) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 123.6 | 283.5 | 387.6 | 679.7 | 709.8 | 4.4% |
| Gross Profit | 50.0 | 111.0 | 163.3 | 291.8 | -262.1 | -189.8% |
| SG&A | 3.6 | 9.2 | 12.1 | 17.7 | 21.5 | 21.6% |
| EBITDA | 88.1 | 186.6 | 278.0 | 492.7 | 495.0 | 0.5% |
| Net Income | 25.5 | 52.5 | 40.4 | 453.1 | -500.7 | -210.5% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 130.8 | 310.7 | 382.9 | 756.6 | 876.2 | 15.8% |
Cash flow
|
|---|
| Capex | 181.8 | 250.0 | 597.5 | 1,270.3 | 475.1 | -62.6% |
Ratios
|
|---|
| Revenue growth | 437.9% | 129.4% | 36.7% | 75.4% | 4.4% | |
| EBITDA growth | 1,725.7% | 111.9% | 49.0% | 77.2% | 0.5% | |
| Gross Margin | 40.5% | 39.2% | 42.1% | 42.9% | -36.9% | -79.9% |
| EBITDA Margin | 71.3% | 65.8% | 71.7% | 72.5% | 69.7% | -2.8% |
| Net Income Margin | 20.6% | 18.5% | 10.4% | 66.7% | -70.5% | -137.2% |
| SG&A, % of revenue | 2.9% | 3.3% | 3.1% | 2.6% | 3.0% | 0.4% |
| CAPEX, % of revenue | 147.1% | 88.2% | 154.2% | 186.9% | 66.9% | -120.0% |
| ROIC | 10.7% | 7.1% | 8.1% | 9.6% | -10.6% | -20.2% |
| ROE | 9.6% | 8.1% | 3.7% | 23.8% | -19.9% | -43.6% |
| Net Debt/EBITDA | 1.5x | 1.7x | 1.4x | 1.5x | 1.8x | 0.2x |
Revenue and profitability
The company's Revenue increased on 4.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 50.4 pp from -17.2% to 33.2% in 2015.
Gross Margin dropped on 79.9 pp from 42.9% to -36.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 137 pp from 66.7% to -70.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Whitecap Resources Inc had CAPEX/Revenue of 66.9%. Whitecap Resources Inc's CAPEX/Revenue dropped on 21.2 pp from 88.2% in 2012 to 66.9% in 2015. For the last three years the average CAPEX/Revenue was 136%.The company maintained rich investment policy and has spent a big chunk of EBITDA (96.0%) to CAPEX.
Return on investment
The company operates at negative ROIC (-10.60%) and ROE (-19.87%). ROIC dropped on 20.2 pp from 9.6% to -10.6% in 2015. ROE dropped on 43.6 pp from 23.8% to -19.9% in 2015.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from 1.5x to 1.8x in 2015. Debt jumped on 15.8% in 2015 while cash didn't change in 2015.
Appendix 1: Peers in Energy
Below we provide Whitecap Resources 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.0% | 9.5% | 16.2% | 17.6% | -27.0% |
|---|
| Whitecap Resources Inc ($WCP) | | 129.4% | 36.7% | 75.4% | 4.4% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 29.9% |
|---|
| Whitecap Resources Inc ($WCP) | 40.5% | 39.2% | 42.1% | 42.9% | -36.9% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 11.9% |
|---|
| Whitecap Resources Inc ($WCP) | 71.3% | 65.8% | 71.7% | 72.5% | 69.7% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 47.3% | 39.1% | 47.1% | 21.4% |
|---|
| Whitecap Resources Inc ($WCP) | 147.1% | 88.2% | 154.2% | 186.9% | 66.9% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -4.3% |
|---|
| Whitecap Resources Inc ($WCP) | 10.7% | 7.1% | 8.1% | 9.6% | -10.6% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.3x |
|---|
| Whitecap Resources Inc ($WCP) | 1.5x | 1.7x | 1.4x | 1.5x | 1.8x |
