Canadian Natural Resources Ltd Net Income dropped on 116% in 2015 and EBITDA Margin dropped on 10.7 pp from 53.0% to 42.3%
03.03.2016 • About Canadian Natural Resources Ltd (
$CNQ) • By InTwits
Canadian Natural Resources Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canadian Natural Resources Ltd doesn't have a profitable business model yet: 2015 ROIC is 0.2%
- Canadian Natural Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 45.1%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 4,468 in 2015, 11,398 in 2014, 7,211 in 2013, 6,104 in 2012, 6,201 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canadian Natural Resources Ltd ($CNQ) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,675 | 14,524 | 16,101 | 19,113 | 13,206 | -30.9% |
| Gross Profit | 7,677 | 7,523 | 8,604 | 10,616 | 6,101 | -42.5% |
| SG&A | 235 | 270 | 335 | 367 | 390 | 6.3% |
| EBITDA | 7,744 | 7,316 | 8,252 | 10,127 | 5,584 | -44.9% |
| Net Income | 2,643 | 1,892 | 2,270 | 3,929 | -637 | -116.2% |
Balance Sheet
|
|---|
| Cash | 34 | 37 | 16 | 25 | 69 | 176.0% |
| Short Term Debt | 359 | 798 | 1,444 | 980 | 1,729 | 76.4% |
| Long Term Debt | 8,212 | 7,938 | 8,217 | 13,022 | 15,065 | 15.7% |
Cash flow
|
|---|
| Capex | 6,201 | 6,104 | 7,211 | 11,398 | 4,468 | -60.8% |
Ratios
|
|---|
| Revenue growth | 4.8% | 6.2% | 10.9% | 18.7% | -30.9% | |
| EBITDA growth | 6.3% | -5.5% | 12.8% | 22.7% | -44.9% | |
| Gross Margin | 56.1% | 51.8% | 53.4% | 55.5% | 46.2% | -9.3% |
| EBITDA Margin | 56.6% | 50.4% | 51.3% | 53.0% | 42.3% | -10.7% |
| Net Income Margin | 19.3% | 13.0% | 14.1% | 20.6% | -4.8% | -25.4% |
| SG&A, % of revenue | 1.7% | 1.9% | 2.1% | 1.9% | 3.0% | 1.0% |
| CAPEX, % of revenue | 45.3% | 42.0% | 44.8% | 59.6% | 33.8% | -25.8% |
| ROIC | 10.7% | 7.3% | 8.0% | 10.9% | 0.2% | -10.8% |
| ROE | 12.2% | 8.0% | 9.1% | 14.4% | -2.3% | -16.6% |
| Net Debt/EBITDA | 1.1x | 1.2x | 1.2x | 1.4x | 3.0x | 1.6x |
Revenue and profitability
Canadian Natural Resources Ltd's Revenue dropped on 30.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.7 pp from 53.0% to 42.3% in 2015.
Gross Margin decreased on 9.3 pp from 55.5% to 46.2% in 2015. SG&A as a % of Revenue increased slightly on 1.0 pp from 1.9% to 3.0% in 2015.
Net Income marign dropped on 25.4 pp from 20.6% to -4.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Canadian Natural Resources Ltd had CAPEX/Revenue of 33.8%. CAPEX/Revenue decreased on 8.2 pp from 42.0% in 2012 to 33.8% in 2015. It's average CAPEX/Revenue for the last three years was 46.1%.Battling declining revenue the company invested a large share of EBITDA (80.0%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (0.19%) and negative ROE (-2.26%). ROIC dropped on 10.8 pp from 10.9% to 0.19% in 2015. ROE dropped on 16.6 pp from 14.4% to -2.3% in 2015.
Leverage (Debt)
Debt level is 3.0x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA jumped on 1.6x from 1.4x to 3.0x in 2015. Debt surged on 19.9% in 2015 while cash jumped on 176% in 2015.
Appendix 1: Peers in Energy
Below you can find Canadian Natural Resources 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.6% | 10.4% | 17.1% | 17.6% | -27.7% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | | 6.2% | 10.9% | 18.7% | -30.9% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 30.2% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 56.1% | 51.8% | 53.4% | 55.5% | 46.2% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 30.5% | 28.9% | 12.2% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 56.6% | 50.4% | 51.3% | 53.0% | 42.3% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 50.0% | 39.1% | 47.1% | 22.8% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 45.3% | 42.0% | 44.8% | 59.6% | 33.8% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -6.3% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 10.7% | 7.3% | 8.0% | 10.9% | 0.2% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 3.2x |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 1.1x | 1.2x | 1.2x | 1.4x | 3.0x |
