Atlantic Power Corp Net Debt / EBITDA surged on 228.7x from 22.4x to 251.1x in 2015 while EBITDA dropped on 94.2%
07.03.2016 • About Atlantic Power Corp (
$ATP) • By InTwits
Atlantic Power Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Atlantic Power Corp doesn't have a profitable business model yet: 2015 ROIC is -6.0%
- EBITDA Margin is declining: 0.9% in 2015 vs. 12.8% in 2014 vs. 38.3% in 2011
- EBITDA Margin is quite volatile: 0.9% in 2015, 12.8% in 2014, 24.0% in 2013, 36.2% in 2012, 38.3% in 2011
- Atlantic Power Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 48.1%. At the same time it's in pair with industry average of 46.9%.
- CAPEX is quite volatile: 11.3 in 2015, 13.4 in 2014, 44.8 in 2013, 459 in 2012, 115 in 2011
- The company has unprofitable business model: ROIC is at -6.0%
- It operates with high leverage: Net Debt/EBITDA is 251.1x while industry average is 21.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Atlantic Power Corp ($ATP) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 93.9 | 440.4 | 551.7 | 489.9 | 420.2 | -14.2% |
| Gross Profit | 33.7 | 148.5 | 193.4 | 166.8 | 150.5 | -9.8% |
| SG&A | 37.7 | 28.3 | 35.2 | 37.9 | 29.4 | -22.4% |
| EBITDA | 36.0 | 159.4 | 132.6 | 62.6 | 3.6 | -94.2% |
| Net Income | -38.4 | -112.8 | -33.0 | -165.8 | -53.6 | -67.7% |
Balance Sheet
|
|---|
| Cash | 60.7 | 60.2 | 158.6 | 106.0 | 72.4 | -31.7% |
| Short Term Debt | 79.0 | 188.2 | 258.3 | 20.0 | 15.8 | -21.0% |
| Long Term Debt | 1,594.5 | 1,883.4 | 1,617.9 | 1,486.5 | 960.4 | -35.4% |
Cash flow
|
|---|
| Capex | 115.1 | 459.1 | 44.8 | 13.4 | 11.3 | -15.7% |
Ratios
|
|---|
| Revenue growth | -51.9% | 369.0% | 25.3% | -11.2% | -14.2% | |
| EBITDA growth | -56.3% | 343.2% | -16.8% | -52.8% | -94.2% | |
| Gross Margin | 35.9% | 33.7% | 35.1% | 34.0% | 35.8% | 1.8% |
| EBITDA Margin | 38.3% | 36.2% | 24.0% | 12.8% | 0.9% | -11.9% |
| Net Income Margin | -40.9% | -25.6% | -6.0% | -33.8% | -12.8% | 21.1% |
| SG&A, % of revenue | 40.1% | 6.4% | 6.4% | 7.7% | 7.0% | -0.7% |
| CAPEX, % of revenue | 122.6% | 104.2% | 8.1% | 2.7% | 2.7% | -0.0% |
| ROIC | -1.4% | 0.1% | -1.3% | -3.6% | -6.0% | -2.3% |
| ROE | -5.8% | -13.9% | -4.9% | -36.8% | -21.9% | 14.9% |
| Net Debt/EBITDA | 44.8x | 12.6x | 13.0x | 22.4x | 251.1x | 228.7x |
Revenue and profitability
The company's Revenue dropped on 14.2% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 22.3 pp from -29.7% to -7.4% in 2015.
Gross Margin increased slightly on 1.8 pp from 34.0% to 35.8% in 2015. SG&A as a % of Revenue decreased slightly on 0.74 pp from 7.7% to 7.0% in 2015.
Net Income marign jumped on 21.1 pp from -33.8% to -12.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 2.7%. CAPEX/Revenue dropped on 102 pp from 104% in 2012 to 2.7% in 2015. It's average CAPEX/Revenue for the last three years was 4.5%.Battling declining revenue Atlantic Power Corp made large investments to CAPEX (314% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-5.97%) and ROE (-21.89%). ROIC decreased on 2.3 pp from -3.6% to -6.0% in 2015. ROE surged on 14.9 pp from -36.8% to -21.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 251.1x and Debt / EBITDA is 271.2x. Net Debt / EBITDA surged on 228.7x from 22.4x to 251.1x in 2015. Debt dropped on 35.2% in 2015 while cash dropped on 31.7% in 2015.
Management team
Atlantic Power Corp's CEO James J Moore Jr "Jim" is a founder and has spent 3 years at the company. The company's CFO is Terrence Ronan "Terry". Terrence Ronan "Terry" has 6 years tenure at the company.
Appendix 1: Peers in Utilities
Below you can find Atlantic Power Corp benchmarking vs. other companies in Utilities 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 |
|---|
| Boralex Inc ($BLX) | | -5.3% | -6.7% | 13.5% | 37.1% |
| Fortis Inc/Canada ($FTS) | | -2.2% | 10.8% | 33.5% | 25.1% |
| Just Energy Group Inc ($JE) | | -10.1% | 13.4% | 17.4% | 10.2% |
| Capital Power Corp ($CPX) | | -26.8% | 7.5% | -11.8% | 1.1% |
| Northland Power Inc ($NPI) | | 1.5% | 54.1% | 36.4% | -4.2% |
| |
|---|
| Median (11 companies) | 26.1% | 0.1% | 10.9% | 13.3% | -5.1% |
|---|
| Atlantic Power Corp ($ATP) | | 369.0% | 25.3% | -11.2% | -14.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atco Ltd/Canada ($ACO.X) | 82.3% | 85.6% | 85.1% | 82.3% | 85.0% |
| Canadian Utilities Ltd ($CU) | 76.5% | 81.0% | 80.8% | 77.7% | 81.0% |
| Boralex Inc ($BLX) | 31.6% | 32.5% | 37.1% | 36.1% | 70.7% |
| Northland Power Inc ($NPI) | 47.7% | 52.5% | 63.7% | 61.8% | 69.0% |
| Fortis Inc/Canada ($FTS) | 31.9% | 34.6% | 34.4% | 59.3% | 61.7% |
| |
|---|
| Median (11 companies) | 42.7% | 34.6% | 37.1% | 55.0% | 61.4% |
|---|
| Atlantic Power Corp ($ATP) | 35.9% | 33.7% | 35.1% | 34.0% | 35.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boralex Inc ($BLX) | 51.8% | 52.8% | 58.4% | 55.9% | 60.4% |
| Northland Power Inc ($NPI) | 48.1% | 54.2% | 52.4% | 51.2% | 57.5% |
| Canadian Utilities Ltd ($CU) | 42.9% | 45.9% | 45.7% | 47.4% | 45.8% |
| Atco Ltd/Canada ($ACO.X) | 36.7% | 39.8% | 41.0% | 41.4% | 38.7% |
| Capital Power Corp ($CPX) | 24.2% | 28.3% | 35.7% | 33.6% | 37.1% |
| |
|---|
| Median (11 companies) | 29.6% | 27.8% | 34.0% | 34.0% | 33.6% |
|---|
| Atlantic Power Corp ($ATP) | 38.3% | 36.2% | 24.0% | 12.8% | 0.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northland Power Inc ($NPI) | 101.7% | 84.0% | 60.2% | 238.7% | 265.9% |
| Boralex Inc ($BLX) | 17.7% | 5.6% | 62.5% | 85.9% | 123.1% |
| Canadian Utilities Ltd ($CU) | 43.7% | 70.7% | 66.4% | 58.5% | 47.2% |
| Caribbean Utilities Co Ltd ($CUP.U) | 18.2% | 13.8% | 13.0% | 17.0% | 41.3% |
| Atco Ltd/Canada ($ACO.X) | 36.2% | 58.8% | 54.2% | 48.3% | 39.6% |
| |
|---|
| Median (11 companies) | 22.7% | 26.5% | 26.8% | 21.2% | 31.5% |
|---|
| Atlantic Power Corp ($ATP) | 122.6% | 104.2% | 8.1% | 2.7% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Just Energy Group Inc ($JE) | 146.5% | 18.6% | 6.0% | 10.6% | 17.9% |
| Keyera Corp ($KEY) | 13.1% | 13.8% | 12.7% | 14.3% | 12.6% |
| Fortis Inc/Canada ($FTS) | 6.7% | 6.4% | 6.1% | 5.4% | 6.0% |
| Canadian Utilities Ltd ($CU) | 10.9% | 10.0% | 9.4% | 9.2% | 5.9% |
| Caribbean Utilities Co Ltd ($CUP.U) | 6.6% | 5.8% | 6.3% | 6.1% | 5.7% |
| |
|---|
| Median (11 companies) | 6.7% | 5.8% | 6.1% | 5.8% | 5.6% |
|---|
| Atlantic Power Corp ($ATP) | -1.4% | 0.1% | -1.3% | -3.6% | -6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northland Power Inc ($NPI) | 5.9x | 6.4x | 5.8x | 6.9x | 11.1x |
| Boralex Inc ($BLX) | 5.9x | 6.6x | 7.6x | 12.1x | 9.0x |
| TransAlta Corp ($TA) | 3.4x | 6.9x | 5.5x | 3.9x | 5.9x |
| Fortis Inc/Canada ($FTS) | 5.3x | 5.0x | 5.6x | 6.7x | 5.3x |
| Canadian Utilities Ltd ($CU) | 3.2x | 3.7x | 3.8x | 4.1x | 5.0x |
| |
|---|
| Median (11 companies) | 3.4x | 4.9x | 5.3x | 4.3x | 4.6x |
|---|
| Atlantic Power Corp ($ATP) | 44.8x | 12.6x | 13.0x | 22.4x | 251.1x |
