Ensign Energy Services Inc CAPEX dropped on 72.0% in 2015 and Revenue dropped on 40.1%
08.03.2016 • About Ensign Energy Services Inc (
$ESI) • By InTwits
Ensign Energy Services Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ensign Energy Services Inc doesn't have a profitable business model yet: 2015 ROIC is -3.1%
- EBITDA Margin is declining: 16.6% in 2015 vs. 18.6% in 2014 vs. 26.0% in 2011
- Ensign Energy Services Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.7%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 168 in 2015, 601 in 2014, 342 in 2013, 307 in 2012, 387 in 2011
- The company has unprofitable business model: ROIC is at -3.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ensign Energy Services Inc ($ESI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,890 | 2,197 | 2,098 | 2,322 | 1,391 | -40.1% |
| Gross Profit | 567 | 642 | 574 | 635 | 396 | -37.7% |
| SG&A | 70 | 81 | 88 | 98 | 75 | -23.5% |
| EBITDA | 491 | 564 | 484 | 431 | 231 | -46.4% |
| Net Income | 212 | 218 | 129 | 71 | -104 | -246.3% |
Balance Sheet
|
|---|
| Cash | 3 | 33 | 79 | 54 | 40 | -25.2% |
| Short Term Debt | 238 | 232 | 327 | 0 | 0 | |
| Long Term Debt | 406 | 297 | 317 | 786 | 794 | 1.0% |
Cash flow
|
|---|
| Capex | 387 | 307 | 342 | 601 | 168 | -72.0% |
Ratios
|
|---|
| Revenue growth | 39.4% | 16.2% | -4.5% | 10.7% | -40.1% | |
| EBITDA growth | 49.3% | 15.0% | -14.3% | -10.9% | -46.4% | |
| Gross Margin | 30.0% | 29.2% | 27.4% | 27.4% | 28.5% | 1.1% |
| EBITDA Margin | 26.0% | 25.7% | 23.1% | 18.6% | 16.6% | -2.0% |
| Net Income Margin | 11.2% | 9.9% | 6.1% | 3.1% | -7.5% | -10.5% |
| SG&A, % of revenue | 3.7% | 3.7% | 4.2% | 4.2% | 5.4% | 1.2% |
| CAPEX, % of revenue | 20.5% | 14.0% | 16.3% | 25.9% | 12.1% | -13.8% |
| ROIC | 13.3% | 12.5% | 8.1% | 4.1% | -3.1% | -7.3% |
| ROE | 13.0% | 12.1% | 6.7% | 3.5% | -5.0% | -8.6% |
| Net Debt/EBITDA | 1.3x | 0.9x | 1.2x | 1.7x | 3.3x | 1.6x |
Revenue and profitability
Ensign Energy Services Inc's Revenue dropped on 40.1% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 2.0 pp from 18.6% to 16.6% in 2015.
Gross Margin increased slightly on 1.1 pp from 27.4% to 28.5% in 2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 4.2% to 5.4% in 2015.
Net Income marign dropped on 10.5 pp from 3.1% to -7.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Ensign Energy Services Inc had CAPEX/Revenue of 12.1%. CAPEX/Revenue decreased slightly on 1.9 pp from 14.0% in 2012 to 12.1% in 2015. For the last three years the average CAPEX/Revenue was 18.1%.Battling declining revenue Ensign Energy Services Inc invested a large share of EBITDA (73.0%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-3.12%) and ROE (-5.04%). ROIC decreased on 7.3 pp from 4.1% to -3.1% in 2015. ROE decreased on 8.6 pp from 3.5% to -5.0% in 2015.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA jumped on 1.6x from 1.7x to 3.3x in 2015. Debt increased slightly on 0.99% in 2015 while cash dropped on 25.2% in 2015.
Appendix 1: Peers in Energy
Below you can find Ensign Energy Services Inc 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 39.7% | 9.5% | 17.1% | 18.5% | -27.5% |
|---|
| Ensign Energy Services Inc ($ESI) | | 16.2% | -4.5% | 10.7% | -40.1% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 30.7% |
|---|
| Ensign Energy Services Inc ($ESI) | 30.0% | 29.2% | 27.4% | 27.4% | 28.5% |
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% | 70.1% |
| 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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 24.7% | 25.0% | 31.1% | 29.6% | 12.4% |
|---|
| Ensign Energy Services Inc ($ESI) | 26.0% | 25.7% | 23.1% | 18.6% | 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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 48.8% | 28.6% |
|---|
| Ensign Energy Services Inc ($ESI) | 20.5% | 14.0% | 16.3% | 25.9% | 12.1% |
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 ($RRX) | | | | 29.1% | 6.2% |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.1% | -6.6% |
|---|
| Ensign Energy Services Inc ($ESI) | 13.3% | 12.5% | 8.1% | 4.1% | -3.1% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 2.8x |
|---|
| Ensign Energy Services Inc ($ESI) | 1.3x | 0.9x | 1.2x | 1.7x | 3.3x |
