Algonquin Power & Utilities Corp reports 55.2% Net Income growth and 5.7 pp EBITDA Margin growth from 26.7% to 32.5%
10.03.2016 • About Algonquin Power & Utilities Corp (
$AQN) • By InTwits
Algonquin Power & Utilities Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Algonquin Power & Utilities Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 26.7%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 204 in 2015, 432 in 2014, 158 in 2013, 75.7 in 2012, 60.7 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Algonquin Power & Utilities Corp ($AQN) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 271 | 349 | 675 | 942 | 1,028 | 9.2% |
| Gross Profit | 116 | 111 | 223 | 287 | 372 | 29.9% |
| SG&A | 18 | 20 | 24 | 35 | 41 | 17.2% |
| EBITDA | 84 | 91 | 200 | 252 | 334 | 32.6% |
| Net Income | 23 | 15 | 20 | 76 | 117 | 55.2% |
Balance Sheet
|
|---|
| Cash | 73 | 53 | 14 | 9 | 124 | 1,241.0% |
| Short Term Debt | 2 | 2 | 8 | 9 | 9 | -2.0% |
| Long Term Debt | 453 | 770 | 1,247 | 1,263 | 1,478 | 17.0% |
Cash flow
|
|---|
| Capex | 61 | 76 | 158 | 432 | 204 | -52.8% |
Ratios
|
|---|
| Revenue growth | 50.1% | 28.8% | 93.6% | 39.4% | 9.2% | |
| EBITDA growth | 24.9% | 8.2% | 118.9% | 26.1% | 32.6% | |
| Gross Margin | 42.7% | 31.7% | 33.0% | 30.4% | 36.2% | 5.8% |
| EBITDA Margin | 31.1% | 26.1% | 29.5% | 26.7% | 32.5% | 5.7% |
| Net Income Margin | 8.6% | 4.2% | 3.0% | 8.0% | 11.4% | 3.4% |
| SG&A, % of revenue | 6.5% | 5.6% | 3.5% | 3.7% | 4.0% | 0.3% |
| CAPEX, % of revenue | 22.4% | 21.7% | 23.5% | 45.9% | 19.9% | -26.1% |
| ROIC | 4.3% | 2.6% | 4.2% | 4.6% | 5.1% | 0.5% |
| ROE | 5.5% | 2.2% | 2.3% | 6.2% | 7.1% | 0.9% |
| Net Debt/EBITDA | 4.5x | 7.9x | 6.2x | 5.0x | 4.1x | -0.9x |
Revenue and profitability
The company's Revenue increased on 9.2% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.2 pp from 20.4% to 22.6% in 2015.
Gross Margin increased on 5.8 pp from 30.4% to 36.2% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 3.4 pp from 8.0% to 11.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Algonquin Power & Utilities Corp's CAPEX/Revenue was 19.9% in 2015. The company's CAPEX/Revenue decreased slightly on 1.8 pp from 21.7% in 2012 to 19.9% in 2015. For the last three years the average CAPEX/Revenue was 29.7%.The company maintained rich investment policy and has spent a big chunk of EBITDA (61.2%) to CAPEX.
Return on investment
The company operates at low ROIC (5.08%) and ROE (7.07%). ROIC showed almost no change in 2015. ROE increased slightly on 0.90 pp from 6.2% to 7.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.1x and Debt / EBITDA is 4.5x. Net Debt / EBITDA dropped on 0.9x from 5.0x to 4.1x in 2015. Debt jumped on 16.9% in 2015 while cash jumped on 1,241% in 2015.
Management team
The company's CEO is Ian E G Robertson. Ian E G Robertson is a founder and has 8 years tenure at the company. David John Bronicheski is a The company's CFO. David John Bronicheski has spent 11 years at the company.
Appendix 1: Peers in Utilities
Below you can find Algonquin Power & Utilities 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% |
| US Geothermal Inc ($GTH) | | 81.2% | 364.4% | 13.1% | 0.7% |
| |
|---|
| Median (13 companies) | 6.6% | 0.1% | 10.9% | 11.9% | -5.1% |
|---|
| Algonquin Power & Utilities Corp ($AQN) | | 28.8% | 93.6% | 39.4% | 9.2% |
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 ($FTS) | 31.9% | 34.6% | 34.4% | 59.3% | 61.7% |
| |
|---|
| Median (12 companies) | 35.9% | 34.6% | 37.1% | 55.0% | 59.0% |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 42.7% | 31.7% | 33.0% | 30.4% | 36.2% |
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% |
| US Geothermal Inc ($GTH) | -84.0% | -129.5% | 52.9% | 49.6% | 52.6% |
| Canadian Utilities Ltd ($CU) | 42.9% | 45.9% | 45.7% | 47.4% | 45.8% |
| Atco Ltd/Canada ($ACO.X) | 36.7% | 39.8% | 41.0% | 41.4% | 38.7% |
| |
|---|
| Median (13 companies) | 30.0% | 29.7% | 34.0% | 34.0% | 33.6% |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 31.1% | 26.1% | 29.5% | 26.7% | 32.5% |
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 ($ACO.X) | 36.2% | 58.8% | 54.2% | 48.3% | 39.6% |
| |
|---|
| Median (13 companies) | 25.4% | 31.6% | 26.8% | 19.6% | 28.0% |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 22.4% | 21.7% | 23.5% | 45.9% | 19.9% |
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 ($CUP.U) | 6.6% | 5.8% | 6.3% | 6.1% | 5.7% |
| |
|---|
| Median (13 companies) | 6.7% | 5.8% | 6.1% | 5.8% | 5.6% |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 4.3% | 2.6% | 4.2% | 4.6% | 5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atlantic Power Corp ($ATP) | 44.8x | 12.6x | 13.0x | 22.4x | 251.1x |
| Northland Power Inc ($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 ($FTS) | 5.3x | 5.0x | 5.6x | 6.7x | 5.3x |
| |
|---|
| Median (13 companies) | 3.4x | 4.9x | 5.3x | 4.3x | 5.0x |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 4.5x | 7.9x | 6.2x | 5.0x | 4.1x |
