Veresen Inc Net Debt / EBITDA dropped on 23.0x from 30.3x to 7.4x in 2015 and Debt dropped on 39.3%
09.03.2016 • About Veresen Inc (
$VSN) • By InTwits
Veresen Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Veresen Inc is a company in decline: 2015 revenue growth was -38.1%, 5 years revenue CAGR was -23.0%
- EBITDA Margin is quite volatile: 75.4% in 2015, 19.2% in 2014, 26.1% in 2013, 31.2% in 2012, 21.4% in 2011
- Veresen Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.1%. At the same time it's a lot of higher than industry average of 6.5%.
- CAPEX is quite volatile: 58 in 2015, 148 in 2014, 50 in 2013, 91.5 in 2012, 18.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Veresen Inc ($VSN) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 174.2 | 264.2 | 324.7 | 302.1 | 187.0 | -38.1% |
| Gross Profit | 89.1 | 151.8 | 170.9 | 161.1 | 111.0 | -31.1% |
| SG&A | 51.9 | 69.5 | 86.2 | 49.2 | 38.0 | -22.8% |
| EBITDA | 37.2 | 82.3 | 84.7 | 58.0 | 141.0 | 143.1% |
| Net Income | 53.1 | 51.3 | 63.5 | 68.7 | 84.0 | 22.3% |
Balance Sheet
|
|---|
| Cash | 21.9 | 16.1 | 26.6 | 51.4 | 58.0 | 12.8% |
| Short Term Debt | 11.2 | 11.7 | 212.4 | 11.5 | 13.0 | 13.0% |
| Long Term Debt | 840.6 | 1,333.8 | 1,061.3 | 1,799.9 | 1,087.0 | -39.6% |
Cash flow
|
|---|
| Capex | 18.5 | 91.5 | 50.0 | 147.8 | 58.0 | -60.8% |
Ratios
|
|---|
| Revenue growth | -74.8% | 51.7% | 22.9% | -7.0% | -38.1% | |
| EBITDA growth | -90.0% | 121.2% | 2.9% | -31.5% | 143.1% | |
| Gross Margin | 51.1% | 57.5% | 52.6% | 53.3% | 59.4% | 6.0% |
| EBITDA Margin | 21.4% | 31.2% | 26.1% | 19.2% | 75.4% | 56.2% |
| Net Income Margin | 30.5% | 19.4% | 19.6% | 22.7% | 44.9% | 22.2% |
| SG&A, % of revenue | 29.8% | 26.3% | 26.5% | 16.3% | 20.3% | 4.0% |
| CAPEX, % of revenue | 10.6% | 34.6% | 15.4% | 48.9% | 31.0% | -17.9% |
| ROIC | -0.4% | -0.0% | -0.2% | -0.7% | 1.8% | 2.5% |
| ROE | 6.1% | 4.5% | 5.3% | 3.3% | 2.5% | -0.8% |
| Net Debt/EBITDA | 22.3x | 16.2x | 14.7x | 30.3x | 7.4x | -23.0x |
Revenue and profitability
The company's Revenue dropped on 38.1% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 56.2 pp from 19.2% to 75.4% in 2015.
Gross Margin increased on 6.0 pp from 53.3% to 59.4% in 2015. SG&A as a % of Revenue increased on 4.0 pp from 16.3% to 20.3% in 2015.
Net Income marign jumped on 22.2 pp from 22.7% to 44.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 31.0% in 2015. Veresen Inc showed decline in CAPEX/Revenue of 3.6 pp from 34.6% in 2012 to 31.0% in 2015. It's average CAPEX/Revenue for the last three years was 31.8%.
Return on investment
The company operates at low ROIC (1.79%) and ROE (2.53%). ROIC increased on 2.5 pp from -0.68% to 1.8% in 2015. ROE decreased slightly on 0.79 pp from 3.3% to 2.5% in 2015.
Leverage (Debt)
Debt level is 7.4x Net Debt / EBITDA and 7.8x Debt / EBITDA. Net Debt / EBITDA dropped on 23.0x from 30.3x to 7.4x in 2015. Debt dropped on 39.3% in 2015 while cash jumped on 12.8% in 2015.
Appendix 1: Peers in Energy
Below we provide Veresen Inc 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 ($SPE) | -8.2% | 16.6% | 29.9% | 923.7% | |
| |
|---|
| Median (160 companies) | 43.4% | 9.5% | 16.2% | 18.5% | -27.3% |
|---|
| Veresen Inc ($VSN) | | 51.7% | 22.9% | -7.0% | -38.1% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 30.7% |
|---|
| Veresen Inc ($VSN) | 51.1% | 57.5% | 52.6% | 53.3% | 59.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Seven Generations Energy Ltd ($VII) | | 56.9% | 54.0% | 106.0% | 70.0% |
| Tourmaline Oil Corp ($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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 25.5% | 25.0% | 31.1% | 29.6% | 12.2% |
|---|
| Veresen Inc ($VSN) | 21.4% | 31.2% | 26.1% | 19.2% | 75.4% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | |
| |
|---|
| Median (162 companies) | 43.3% | 50.0% | 39.2% | 47.1% | 28.1% |
|---|
| Veresen Inc ($VSN) | 10.6% | 34.6% | 15.4% | 48.9% | 31.0% |
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 ($RRX) | | | | 29.1% | 6.2% |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.5% | 4.6% | 5.1% | -6.9% |
|---|
| Veresen Inc ($VSN) | -0.4% | -0.0% | -0.2% | -0.7% | 1.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | |
| Etrion Corp ($ETX) | 12.5x | 8.2x | 8.3x | 12.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.6x |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | 7.4x |
