Capstone Infrastructure Corp Net Debt / EBITDA surged on 2.8x from 5.6x to 8.4x in 2015 and Debt jumped on 10.2%
03.03.2016 • About Capstone Infrastructure Corp (
$CSE) • By InTwits
Capstone Infrastructure Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Capstone Infrastructure Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 37.7%. At the same time it's a lot of higher than industry average of 7.0%.
- CAPEX is quite volatile: 24.6 in 2015, 72.7 in 2014, 47.0 in 2013, 28.8 in 2012, 12.6 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Capstone Infrastructure Corp ($CSE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 216.0 | 357.6 | 389.5 | 441.6 | 345.0 | -21.9% |
| Gross Profit | 62.9 | 114.4 | 133.8 | 163.1 | 180.9 | 10.9% |
| SG&A | | | | | 11.8 | |
| EBITDA | 34.2 | 154.7 | 180.7 | 207.5 | 151.5 | -27.0% |
| Net Income | -5.7 | 28.2 | 41.4 | 9.5 | 0.1 | -98.6% |
Balance Sheet
|
|---|
| Cash | 57.6 | 49.6 | 45.8 | 58.8 | 74.4 | 26.4% |
| Short Term Debt | 236.2 | 18.5 | 19.0 | 25.8 | 102.0 | 294.8% |
| Long Term Debt | 710.9 | 793.4 | 1,004.8 | 1,198.3 | 1,246.6 | 4.0% |
Cash flow
|
|---|
| Capex | 122.4 | 127.9 | 146.3 | 129.8 | 100.4 | -22.6% |
Ratios
|
|---|
| Revenue growth | 36.2% | 65.6% | 8.9% | 13.4% | -21.9% | |
| EBITDA growth | 20.4% | 352.6% | 16.8% | 14.8% | -27.0% | |
| Gross Margin | 29.1% | 32.0% | 34.3% | 36.9% | 52.5% | 15.5% |
| EBITDA Margin | 15.8% | 43.3% | 46.4% | 47.0% | 43.9% | -3.1% |
| Net Income Margin | -2.6% | 7.9% | 10.6% | 2.1% | 0.0% | -2.1% |
| SG&A, % of revenue | | | | | 3.4% | 3.4% |
| CAPEX, % of revenue | 56.7% | 35.8% | 37.6% | 29.4% | 29.1% | -0.3% |
| ROIC | -0.5% | 6.4% | 7.1% | 6.4% | 3.0% | -3.4% |
| ROE | -1.9% | 5.7% | 7.9% | 1.1% | -0.8% | -2.0% |
| Net Debt/EBITDA | 26.0x | 4.9x | 5.4x | 5.6x | 8.4x | 2.8x |
Revenue and profitability
Capstone Infrastructure Corp's Revenue dropped on 21.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 47.0% to 43.9% in 2015.
Gross Margin surged on 15.5 pp from 36.9% to 52.5% in 2015.
Net Income marign decreased on 2.1 pp from 2.1% to 0.039% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 29.1%. The company showed decline in CAPEX/Revenue of 6.7 pp from 35.8% in 2012 to 29.1% in 2015. For the last three years the average CAPEX/Revenue was 32.0%.Battling declining revenue the company invested a large share of EBITDA (66.3%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (3.03%) and negative ROE (-0.84%). ROIC decreased on 3.4 pp from 6.4% to 3.0% in 2015. ROE decreased slightly on 2.0 pp from 1.1% to -0.84% in 2015.
Leverage (Debt)
Debt level is 8.4x Net Debt / EBITDA and 8.9x Debt / EBITDA. Net Debt / EBITDA surged on 2.8x from 5.6x to 8.4x in 2015. Debt jumped on 10.2% in 2015 while cash jumped on 26.4% in 2015.
Appendix 1: Peers in Energy
Below we provide Capstone Infrastructure Corp 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.6% | 9.5% | 17.1% | 18.5% | -29.9% |
|---|
| Capstone Infrastructure Corp ($CSE) | | 65.6% | 8.9% | 13.4% | -21.9% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.5% | 29.6% | 30.2% |
|---|
| Capstone Infrastructure Corp ($CSE) | 29.1% | 32.0% | 34.3% | 36.9% | 52.5% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 25.5% | 25.0% | 30.5% | 28.9% | 12.2% |
|---|
| Capstone Infrastructure Corp ($CSE) | 15.8% | 43.3% | 46.4% | 47.0% | 43.9% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 42.0% | 50.0% | 39.2% | 48.8% | 22.8% |
|---|
| Capstone Infrastructure Corp ($CSE) | 56.7% | 35.8% | 37.6% | 29.4% | 29.1% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.2% | 4.5% | 5.0% | -6.3% |
|---|
| Capstone Infrastructure Corp ($CSE) | -0.5% | 6.4% | 7.1% | 6.4% | 3.0% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 3.0x |
|---|
| Capstone Infrastructure Corp ($CSE) | 26.0x | 4.9x | 5.4x | 5.6x | 8.4x |
