AKITA Drilling Ltd Net Income dropped on 261% in 2015 and EBITDA Margin dropped on 37.5 pp from 20.9% to -16.6%
03.03.2016 • About AKITA Drilling Ltd (
$AKT.A) • By InTwits
AKITA Drilling Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AKITA Drilling Ltd is a company in decline: 2015 revenue growth was -31.9%, 5 years revenue CAGR was -5.0%
- EBITDA Margin is quite volatile: -16.6% in 2015, 20.9% in 2014, 25.6% in 2013, 23.2% in 2012, 25.7% in 2011
- AKITA Drilling Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 31.8%. At the same time it's a lot of higher than industry average of 71.3%.
- CAPEX is quite volatile: 18.0 in 2015, 104 in 2014, 35.1 in 2013, 65.4 in 2012, 54.5 in 2011
- The company has unprofitable business model: ROIC is at -20.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AKITA Drilling Ltd ($AKT.A) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 199.9 | 203.4 | 168.1 | 165.3 | 112.5 | -31.9% |
| Gross Profit | 46.5 | 41.2 | 35.0 | 22.5 | 38.5 | 71.0% |
| SG&A | | 18.5 | 18.8 | 18.1 | 15.1 | -16.6% |
| EBITDA | 51.3 | 47.1 | 43.0 | 34.5 | -18.6 | -154.0% |
| Net Income | 23.4 | 28.8 | 26.5 | 21.1 | -34.0 | -261.1% |
Balance Sheet
|
|---|
| Cash | 18.2 | 11.0 | 14.0 | 2.0 | 9.4 | 365.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 20.0 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 54.5 | 65.4 | 35.1 | 103.9 | 18.0 | -82.7% |
Ratios
|
|---|
| Revenue growth | 37.8% | 1.8% | -17.4% | -1.7% | -31.9% | |
| EBITDA growth | 48.3% | -8.1% | -8.8% | -19.6% | -154.0% | |
| Gross Margin | 23.2% | 20.3% | 20.8% | 13.6% | 34.2% | 20.6% |
| EBITDA Margin | 25.7% | 23.2% | 25.6% | 20.9% | -16.6% | -37.5% |
| Net Income Margin | 11.7% | 14.1% | 15.8% | 12.8% | -30.2% | -42.9% |
| SG&A, % of revenue | | 9.1% | 11.2% | 11.0% | 13.4% | 2.5% |
| CAPEX, % of revenue | 27.3% | 32.1% | 20.9% | 62.9% | 16.0% | -46.9% |
| ROIC | 14.7% | 9.9% | 6.3% | 1.5% | -20.3% | -21.8% |
| ROE | 12.1% | 13.5% | 11.3% | 8.3% | -14.2% | -22.5% |
| Net Debt/EBITDA | -0.4x | -0.2x | -0.3x | 0.5x | | -0.5x |
Revenue and profitability
The company's Revenue dropped on 31.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 37.5 pp from 20.9% to -16.6% in 2015.
Gross Margin surged on 20.6 pp from 13.6% to 34.2% in 2015. SG&A as a % of Revenue increased on 2.5 pp from 11.0% to 13.4% in 2015.
Net Income marign dropped on 42.9 pp from 12.8% to -30.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 16.0% in 2015. CAPEX/Revenue dropped on 16.2 pp from 32.1% in 2012 to 16.0% in 2015. For the last three years the average CAPEX/Revenue was 33.2%.
Return on investment
The company operates at negative ROIC (-20.27%) and ROE (-14.15%). ROIC dropped on 21.8 pp from 1.5% to -20.3% in 2015. ROE dropped on 22.5 pp from 8.3% to -14.2% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash surged on 366% in 2015.
Appendix 1: Peers in Energy
Below you can find AKITA Drilling Ltd 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.6% | 10.4% | 17.1% | 18.5% | -27.7% |
|---|
| AKITA Drilling Ltd ($AKT.A) | | 1.8% | -17.4% | -1.7% | -31.9% |
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% | 88.5% |
| Freehold Royalties Ltd ($FRU) | 91.7% | 90.4% | 89.0% | 90.2% | 86.3% |
| MEG Energy Corp ($MEG) | 85.5% | 86.8% | 87.4% | 87.6% | 84.1% |
| NXT Energy Solutions Inc ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 30.2% |
|---|
| AKITA Drilling Ltd ($AKT.A) | 23.2% | 20.3% | 20.8% | 13.6% | 34.2% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 24.7% | 25.7% | 31.1% | 29.6% | 12.6% |
|---|
| AKITA Drilling Ltd ($AKT.A) | 25.7% | 23.2% | 25.6% | 20.9% | -16.6% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 47.1% | 25.4% |
|---|
| AKITA Drilling Ltd ($AKT.A) | 27.3% | 32.1% | 20.9% | 62.9% | 16.0% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.1% | -5.1% |
|---|
| AKITA Drilling Ltd ($AKT.A) | 14.7% | 9.9% | 6.3% | 1.5% | -20.3% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 3.1x |
|---|
| AKITA Drilling Ltd ($AKT.A) | -0.4x | -0.2x | -0.3x | 0.5x | |
