High Arctic Energy Services Inc reports 29.6 pp EBITDA Margin growth from to 29.6% in 2015
11.03.2016 • About High Arctic Energy Services Inc (
$HWO) • By InTwits
High Arctic Energy Services Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- High Arctic Energy Services Inc is a growth stock: 2015 revenue growth was 22.2%, 5 year revenue CAGR was 12.0% at 2015 ROIC 24.2%
- High Arctic Energy Services Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.2%. At the same time it's a lot of higher than industry average of 26.4%.
- CAPEX is quite volatile: 40 in 2015, 55.7 in 2014, 21.9 in 2013, 19.9 in 2012, 14.8 in 2011
- The company has highly profitable business model: ROIC is at 24.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
High Arctic Energy Services Inc ($HWO) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 127.2 | 146.2 | 152.7 | 171.8 | 209.9 | 22.2% |
| Gross Profit | 32.3 | 38.2 | 39.0 | 48.4 | 78.8 | 62.8% |
| SG&A | | | | | 14.8 | |
| EBITDA | 30.8 | 38.2 | 40.7 | | 62.2 | |
| Net Income | 18.0 | 28.8 | 24.6 | 28.2 | 27.1 | -3.9% |
Balance Sheet
|
|---|
| Cash | 16.5 | 27.4 | 33.7 | 37.2 | 15.5 | -58.3% |
| Short Term Debt | 4.8 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 12.4 | 13.7 | 6.7 | 0.0 | 4.0 | |
Cash flow
|
|---|
| Capex | 14.8 | 19.9 | 21.9 | 55.7 | 40.0 | -28.2% |
Ratios
|
|---|
| Revenue growth | 6.6% | 14.9% | 4.4% | 12.5% | 22.2% | |
| EBITDA growth | -7.8% | 24.0% | 6.5% | | | |
| Gross Margin | 25.4% | 26.1% | 25.5% | 28.2% | 37.5% | 9.4% |
| EBITDA Margin | 24.2% | 26.1% | 26.7% | 0.0% | 29.6% | 29.6% |
| Net Income Margin | 14.2% | 19.7% | 16.1% | 16.4% | 12.9% | -3.5% |
| SG&A, % of revenue | | | | | 7.1% | 7.1% |
| CAPEX, % of revenue | 11.6% | 13.6% | 14.3% | 32.4% | 19.1% | -13.4% |
| ROIC | 27.0% | 31.4% | 26.3% | 24.9% | 24.2% | -0.7% |
| ROE | 34.2% | 37.8% | 24.6% | 20.3% | 14.8% | -5.6% |
| Net Debt/EBITDA | 0.0x | -0.4x | -0.7x | | -0.2x | -0.2x |
Revenue and profitability
The company's Revenue surged on 22.2% in 2015.
Gross Margin increased on 9.4 pp from 28.2% to 37.5% in 2015.
Net Income marign decreased on 3.5 pp from 16.4% to 12.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 19.1%. High Arctic Energy Services Inc showed CAPEX/Revenue growth of 5.4 pp from 13.6% in 2012 to 19.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 21.9%.The company invested a big chunk of EBITDA (64.3%) to CAPEX to secure its growth.
Return on investment
The company operates at high and attractive ROIC (24.21%) while ROE is a bit lower (14.78%). ROIC decreased slightly on 0.69 pp from 24.9% to 24.2% in 2015. ROE decreased on 5.6 pp from 20.3% to 14.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped0.2x from to -0.2x in 2015. Debt surged while cash dropped on 58.3% in 2015.
Appendix 1: Peers in Energy
Below we provide High Arctic Energy Services 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (160 companies) | 53.5% | 9.5% | 17.1% | 18.5% | -27.2% |
|---|
| High Arctic Energy Services Inc ($HWO) | | 14.9% | 4.4% | 12.5% | 22.2% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.2% | 29.3% | 31.6% | 30.3% | 33.6% |
|---|
| High Arctic Energy Services Inc ($HWO) | 25.4% | 26.1% | 25.5% | 28.2% | 37.5% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (160 companies) | 25.5% | 25.0% | 31.1% | 29.3% | 10.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($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) | 43.3% | 50.0% | 39.2% | 48.8% | 29.1% |
|---|
| High Arctic Energy Services Inc ($HWO) | 11.6% | 13.6% | 14.3% | 32.4% | 19.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pason Systems Inc ($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% |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| ARC Resources Ltd ($ARX) | 6.5% | 3.2% | 7.9% | 20.7% | -6.0% |
| |
|---|
| Median (165 companies) | 4.4% | 3.2% | 4.5% | 5.0% | -7.1% |
|---|
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | 24.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Veresen Inc ($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 (137 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 2.6x |
|---|
