Polaris Infrastructure Inc reports 266% CAPEX growth and 4.1% Revenue growth
11.03.2016 • About Polaris Infrastructure Inc (
$PIF) • By InTwits
Polaris Infrastructure Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Polaris Infrastructure Inc doesn't have a profitable business model yet: 2015 ROIC is -7.0%
- The company operates at negative EBITDA Margin: -5.4%
- Polaris Infrastructure Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 734.2%. At the same time it's a lot of higher than industry average of 84.8%.
- CAPEX is quite volatile: 16.1 in 2015, 4.4 in 2014, 27.7 in 2013, 41.4 in 2012, 153 in 2011
- The company has unprofitable business model: ROIC is at -7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Polaris Infrastructure Inc ($PIF) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4.458 | 28.062 | 46.210 | 48.184 | 50.149 | 4.1% |
| Gross Profit | 2.603 | 11.187 | 15.545 | 15.409 | 43.492 | 182.2% |
| SG&A | | | | | 5.296 | |
| EBITDA | -9.457 | 9.955 | 30.664 | 34.329 | -2.720 | -107.9% |
| Net Income | -151.299 | -60.130 | -50.703 | -24.677 | -37.494 | 51.9% |
Balance Sheet
|
|---|
| Cash | 57.195 | 51.330 | 22.550 | 15.292 | 61.592 | 302.8% |
| Short Term Debt | 4.164 | 63.535 | 19.367 | 208.539 | 9.246 | -95.6% |
| Long Term Debt | 212.984 | 210.592 | 239.841 | 44.637 | 171.120 | 283.4% |
Cash flow
|
|---|
| Capex | 152.570 | 41.360 | 27.721 | 4.399 | 16.117 | 266.4% |
Ratios
|
|---|
| Revenue growth | 4.1% | 529.4% | 64.7% | 4.3% | 4.1% | |
| EBITDA growth | -29.6% | -205.3% | 208.0% | 12.0% | -107.9% | |
| Gross Margin | 58.4% | 39.9% | 33.6% | 32.0% | 86.7% | 54.7% |
| EBITDA Margin | -212.1% | 35.5% | 66.4% | 71.2% | -5.4% | -76.7% |
| Net Income Margin | -3,393.8% | -214.3% | -109.7% | -51.2% | -74.8% | -23.5% |
| SG&A, % of revenue | | | | | 10.6% | 10.6% |
| CAPEX, % of revenue | 3,422.3% | 147.4% | 60.0% | 9.1% | 32.1% | 23.0% |
| ROIC | -2.6% | -0.6% | 1.3% | 1.9% | -7.0% | -9.0% |
| ROE | -49.1% | -25.7% | -27.6% | -16.7% | -22.3% | -5.6% |
| Net Debt/EBITDA | | 22.4x | 7.7x | 6.9x | | -6.9x |
Revenue and profitability
The company's Revenue increased on 4.1% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 59.8% to 69.2% in 2015.
Gross Margin surged on 54.7 pp from 32.0% to 86.7% in 2015.
Net Income marign dropped on 23.5 pp from -51.2% to -74.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 32.1%. The company showed big decline in CAPEX/Revenue of 115 pp from 147% in 2012 to 32.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 33.8%.
Return on investment
The company operates at negative ROIC (-7.03%) and ROE (-22.28%). ROIC decreased on 9.0 pp from 1.9% to -7.0% in 2015. ROE decreased on 5.6 pp from -16.7% to -22.3% in 2015.
Leverage (Debt)
Debt level is 7.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 6.9x from 6.9x to in 2015. Debt dropped on 28.8% in 2015 while cash surged on 303% in 2015.
Appendix 1: Peers in Energy
Below you can find Polaris Infrastructure 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (160 companies) | 53.5% | 9.5% | 16.2% | 18.5% | -27.2% |
|---|
| Polaris Infrastructure Inc ($PIF) | | 529.4% | 64.7% | 4.3% | 4.1% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 33.6% |
|---|
| Polaris Infrastructure Inc ($PIF) | 58.4% | 39.9% | 33.6% | 32.0% | 86.7% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (159 companies) | 25.5% | 25.0% | 30.5% | 28.9% | 11.5% |
|---|
| Polaris Infrastructure Inc ($PIF) | -212.1% | 35.5% | 66.4% | 71.2% | -5.4% |
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% | 315.2% |
| BNK Petroleum Inc ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (162 companies) | 42.0% | 47.3% | 39.1% | 48.8% | 28.1% |
|---|
| Polaris Infrastructure Inc ($PIF) | 3,422.3% | 147.4% | 60.0% | 9.1% | 32.1% |
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% | 24.2% |
| Rooster Energy Ltd ($COQ) | | | | 22.9% | |
| |
|---|
| Median (165 companies) | 4.5% | 3.5% | 4.6% | 5.1% | -6.9% |
|---|
| Polaris Infrastructure Inc ($PIF) | -2.6% | -0.6% | 1.3% | 1.9% | -7.0% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (136 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.6x |
|---|
| Polaris Infrastructure Inc ($PIF) | | 22.4x | 7.7x | 6.9x | |
