Epsilon Energy Ltd/Canada Net Income dropped on 486% in 2015 and EBITDA Margin dropped on 170 pp from 75.0% to -94.9%
16.03.2016 • About Epsilon Energy Ltd/Canada (
$EPS) • By InTwits
Epsilon Energy Ltd/Canada reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Epsilon Energy Ltd/Canada doesn't have a profitable business model yet: 2015 ROIC is -26.1%
- The company operates at negative EBITDA Margin: -94.9%
- Epsilon Energy Ltd/Canada has high CAPEX intensity: 5 year average CAPEX/Revenue was 87.4%. At the same time it's in pair with industry average of 73.9%.
- CAPEX is quite volatile: 4.1 in 2015, 7.9 in 2014, 41.1 in 2013, 77.1 in 2012, 13.9 in 2011
- The company has unprofitable business model: ROIC is at -26.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Epsilon Energy Ltd/Canada ($EPS) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 9.849 | 43.487 | 48.048 | 49.044 | 23.830 | -51.4% |
| Gross Profit | | 7.166 | 19.657 | 14.253 | 0.654 | -95.4% |
| SG&A | | | | | 1.859 | |
| EBITDA | -39.090 | 27.266 | 29.580 | 36.788 | -22.609 | -161.5% |
| Net Income | 19.202 | -4.130 | -13.522 | 6.616 | -25.524 | -485.8% |
Balance Sheet
|
|---|
| Cash | 17.184 | 7.579 | 3.624 | 16.062 | 16.955 | 5.6% |
| Short Term Debt | 0.000 | 0.000 | 9.000 | 7.000 | 7.000 | 0.0% |
| Long Term Debt | 0.000 | 33.996 | 33.071 | 31.493 | 26.791 | -14.9% |
Cash flow
|
|---|
| Capex | 13.889 | 77.080 | 41.065 | 7.946 | 4.073 | -48.7% |
Ratios
|
|---|
| Revenue growth | -33.2% | 341.5% | 10.5% | 2.1% | -51.4% | |
| EBITDA growth | -604.3% | -169.8% | 8.5% | 24.4% | -161.5% | |
| Gross Margin | | 16.5% | 40.9% | 29.1% | 2.7% | -26.3% |
| EBITDA Margin | -396.9% | 62.7% | 61.6% | 75.0% | -94.9% | -169.9% |
| Net Income Margin | 195.0% | -9.5% | -28.1% | 13.5% | -107.1% | -120.6% |
| SG&A, % of revenue | | | | | 7.8% | 7.8% |
| CAPEX, % of revenue | 141.0% | 177.2% | 85.5% | 16.2% | 17.1% | 0.9% |
| ROIC | -45.4% | 2.6% | 8.0% | 8.4% | -26.1% | -34.6% |
| ROE | 20.7% | -4.0% | -13.7% | 7.2% | -32.1% | -39.2% |
| Net Debt/EBITDA | | 1.0x | 1.3x | 0.6x | | -0.6x |
Revenue and profitability
The company's Revenue dropped on 51.4% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 170 pp from 75.0% to -94.9% in 2015.
Gross Margin dropped on 26.3 pp from 29.1% to 2.7% in 2015.
Net Income marign dropped on 121 pp from 13.5% to -107% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 17.1%. CAPEX/Revenue dropped on 160 pp from 177% in 2012 to 17.1% in 2015. For the last three years the average CAPEX/Revenue was 39.6%.
Return on investment
The company operates at negative ROIC (-26.14%) and ROE (-32.06%). ROIC dropped on 34.6 pp from 8.4% to -26.1% in 2015. ROE dropped on 39.2 pp from 7.2% to -32.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.0x and Debt / EBITDA is . Net Debt / EBITDA dropped on 0.6x from 0.6x to in 2015. Debt dropped on 12.2% in 2015 while cash increased on 5.6% in 2015.
Appendix 1: Peers in Energy
Below you can find Epsilon Energy Ltd/Canada 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (161 companies) | 41.6% | 9.4% | 17.3% | 18.7% | -27.4% |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | | 341.5% | 10.5% | 2.1% | -51.4% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.0% | 29.3% | 31.5% | 30.3% | 33.9% |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | | 16.5% | 40.9% | 29.1% | 2.7% |
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% | -115.8% |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (160 companies) | 25.7% | 24.8% | 30.7% | 29.3% | 9.2% |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | -396.9% | 62.7% | 61.6% | 75.0% | -94.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | 712.8% |
| Petroshale Inc ($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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (163 companies) | 40.9% | 48.7% | 39.2% | 48.9% | 31.9% |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | 141.0% | 177.2% | 85.5% | 16.2% | 17.1% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (166 companies) | 4.5% | 3.3% | 4.6% | 5.0% | -7.2% |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | -45.4% | 2.6% | 8.0% | 8.4% | -26.1% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (137 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 2.7x |
|---|
| Epsilon Energy Ltd/Canada ($EPS) | | 1.0x | 1.3x | 0.6x | |
