Spartan Energy Corp reports 420% Net Income decline and 66.7 pp EBITDA Margin decline from 62.4% to -4.3%
10.03.2016 • About Spartan Energy Corp (
$SPE) • By InTwits
Spartan Energy Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Spartan Energy Corp doesn't have a profitable business model yet: 2015 ROIC is -14.2%
- The company operates at negative EBITDA Margin: -4.3%
- EBITDA Margin is quite volatile: -4.3% in 2015, 62.4% in 2014, 38.4% in 2013, 51.7% in 2012, -0.3% in 2011
- Spartan Energy Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 78.4%. At the same time it's in pair with industry average of 84.7%.
- CAPEX is quite volatile: 68.2 in 2015, 252 in 2014, 3.5 in 2013, 4.1 in 2012, 7.7 in 2011
- The company has unprofitable business model: ROIC is at -14.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Spartan Energy Corp ($SPE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8.8 | 10.2 | 13.3 | 135.8 | 130.8 | -3.7% |
| Gross Profit | 5.4 | 6.7 | 9.5 | 94.3 | 75.0 | -20.4% |
| SG&A | 1.8 | 1.9 | 2.0 | 5.6 | 5.6 | 0.1% |
| EBITDA | -0.0 | 5.3 | 5.1 | 84.7 | -5.6 | -106.6% |
| Net Income | -6.5 | 0.8 | -1.8 | 24.3 | -77.8 | -419.6% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 10.2 | 0.2 | 0.0 | -76.1% |
| Short Term Debt | 12.5 | 11.9 | 0.0 | 74.4 | 85.5 | 14.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 7.7 | 4.1 | 3.5 | 252.3 | 68.2 | -73.0% |
Ratios
|
|---|
| Revenue growth | -8.2% | 16.6% | 29.9% | 923.7% | -3.7% | |
| EBITDA growth | -100.6% | -19,666.7% | -3.5% | 1,562.2% | -106.6% | |
| Gross Margin | 62.1% | 65.8% | 71.3% | 69.4% | 57.4% | -12.1% |
| EBITDA Margin | -0.3% | 51.7% | 38.4% | 62.4% | -4.3% | -66.7% |
| Net Income Margin | -74.4% | 8.0% | -13.3% | 17.9% | -59.5% | -77.4% |
| SG&A, % of revenue | 20.6% | 18.3% | 15.3% | 4.1% | 4.3% | 0.2% |
| CAPEX, % of revenue | 87.8% | 39.7% | 26.5% | 185.8% | 52.2% | -133.7% |
| ROIC | -18.4% | 0.8% | -1.6% | 4.9% | -14.2% | -19.0% |
| ROE | -37.5% | 5.2% | -6.0% | 6.7% | -12.1% | -18.8% |
| Net Debt/EBITDA | | 2.3x | -2.0x | 0.9x | | -0.9x |
Revenue and profitability
Spartan Energy Corp's Revenue decreased on 3.7% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 66.7 pp from 62.4% to -4.3% in 2015.
Gross Margin dropped on 12.1 pp from 69.4% to 57.4% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 77.4 pp from 17.9% to -59.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 52.2%. The company showed fast CAPEX/Revenue growth of 12.4 pp from 39.7% in 2012 to 52.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 88.2%.
Return on investment
The company operates at negative ROIC (-14.16%) and ROE (-12.06%). ROIC dropped on 19.0 pp from 4.9% to -14.2% in 2015. ROE dropped on 18.8 pp from 6.7% to -12.1% in 2015.
Leverage (Debt)
Debt level is -2.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 0.9x to in 2015. Debt jumped on 14.9% in 2015 while cash dropped on 76.1% in 2015.
Management team
Spartan Energy Corp's CEO Richard F Mchardy "Rick" is a founder and has spent 4 years at the company. The company's CFO is Adam Macdonald. Adam Macdonald has 4 years tenure at the company.
Appendix 1: Peers in Energy
Below you can find Spartan Energy Corp 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% | |
| Quattro Exploration & Production Ltd ($QXP) | | | 507.8% | 505.0% | |
| |
|---|
| Median (160 companies) | 43.4% | 9.5% | 16.2% | 17.6% | -27.3% |
|---|
| Spartan Energy Corp ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 33.5% |
|---|
| Spartan Energy Corp ($SPE) | 62.1% | 65.8% | 71.3% | 69.4% | 57.4% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 25.5% | 25.0% | 30.5% | 28.9% | 11.5% |
|---|
| Spartan Energy Corp ($SPE) | -0.3% | 51.7% | 38.4% | 62.4% | -4.3% |
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% | 315.2% |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (162 companies) | 42.0% | 50.0% | 39.2% | 47.1% | 28.1% |
|---|
| Spartan Energy Corp ($SPE) | 87.8% | 39.7% | 26.5% | 185.8% | 52.2% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.5% | 4.6% | 5.1% | -6.9% |
|---|
| Spartan Energy Corp ($SPE) | -18.4% | 0.8% | -1.6% | 4.9% | -14.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($VSN) | 22.3x | 16.2x | 14.7x | 30.3x | 7.4x |
| Lightstream Resources Ltd ($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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.6x |
|---|
| Spartan Energy Corp ($SPE) | | 2.3x | -2.0x | 0.9x | |
