Surge Energy Inc EBITDA dropped on 281% in 2015 and Revenue dropped on 37.6%
16.03.2016 • About Surge Energy Inc (
$SGY) • By InTwits
Surge Energy Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Surge Energy Inc doesn't have a profitable business model yet: 2015 ROIC is -16.5%
- EBITDA Margin is quite volatile: -37.7% in 2015, 13.0% in 2014, 46.1% in 2013, 0.0% in 2012, 55.0% in 2011
- Surge Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 74.6%. At the same time it's in pair with industry average of 73.9%.
- CAPEX is quite volatile: 2.7 in FY2015, 4.6 in FY2014, 5.9 in FY2013, 2.4 in FY2012, 5.8 in FY2011
- The company has unprofitable business model: ROIC is at -16.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Surge Energy Inc ($SGY) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 114.0 | 157.5 | 222.3 | 389.2 | 242.9 | -37.6% |
| Gross Profit | 75.2 | 112.5 | 164.3 | 275.5 | 143.1 | -48.1% |
| SG&A | 9.5 | 10.8 | 12.2 | 12.9 | 11.0 | -14.8% |
| EBITDA | 62.7 | 0.1 | 102.4 | 50.6 | -91.6 | -280.9% |
| Net Income | 2.1 | -53.2 | -9.9 | -33.2 | -213.9 | 544.7% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Short Term Debt | 0.0 | 0.0 | 1.9 | 3.0 | 1.7 | -43.9% |
| Long Term Debt | 72.2 | 194.5 | 279.6 | 564.3 | 149.0 | -73.6% |
Cash flow
|
|---|
| Capex | 150.1 | 180.7 | 125.5 | 149.6 | 76.7 | -48.7% |
Ratios
|
|---|
| Revenue growth | 128.8% | 38.3% | 41.1% | 75.1% | -37.6% | |
| EBITDA growth | 373.9% | -99.9% | 148,260.9% | -50.6% | -280.9% | |
| Gross Margin | 66.0% | 71.4% | 73.9% | 70.8% | 58.9% | -11.9% |
| EBITDA Margin | 55.0% | 0.0% | 46.1% | 13.0% | -37.7% | -50.7% |
| Net Income Margin | 1.8% | -33.8% | -4.4% | -8.5% | -88.0% | -79.5% |
| SG&A, % of revenue | 8.3% | 6.9% | 5.5% | 3.3% | 4.5% | 1.2% |
| CAPEX, % of revenue | 131.7% | 114.7% | 56.5% | 38.4% | 31.6% | -6.8% |
| ROIC | 3.8% | -13.8% | 2.2% | -7.7% | -16.5% | -8.8% |
| ROE | 0.7% | -15.8% | -1.6% | -3.4% | -22.7% | -19.2% |
| Net Debt/EBITDA | 1.2x | 2,819.2x | 2.8x | 11.2x | | -11.2x |
Revenue and profitability
Surge Energy Inc's Revenue dropped on 37.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 62.5 pp from 28.2% to 90.7% in 2015.
Gross Margin dropped on 11.9 pp from 70.8% to 58.9% in 2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 3.3% to 4.5% in 2015.
Net Income marign dropped on 79.5 pp from -8.5% to -88.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
Surge Energy Inc's CAPEX/Revenue was 31.6% in 2015. Surge Energy Inc showed big decline in CAPEX/Revenue of 83.1 pp from 115% in 2012 to 31.6% in 2015. It's average CAPEX/Revenue for the last three years was 42.2%.
Return on investment
The company operates at negative ROIC (-16.46%) and ROE (-22.66%). ROIC decreased on 8.8 pp from -7.7% to -16.5% in 2015. ROE dropped on 19.2 pp from -3.4% to -22.7% in 2015.
Leverage (Debt)
Debt level is 11.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 11.2x from 11.2x to in 2015. Debt dropped on 73.4% in 2015 while cash didn't change in 2015.
Management team
Surge Energy Inc's CEO Paul Colborne is a founder and has spent 5 years at the company. Paul Ferguson is a The company's CFO. Paul Ferguson has spent 3 years at the company.
Appendix 1: Peers in Energy
Below we provide Surge Energy 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (161 companies) | 41.6% | 9.4% | 17.0% | 18.3% | -27.4% |
|---|
| Surge Energy Inc ($SGY) | | 38.3% | 41.1% | 75.1% | -37.6% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 33.6% |
|---|
| Surge Energy Inc ($SGY) | 66.0% | 71.4% | 73.9% | 70.8% | 58.9% |
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 ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (160 companies) | 25.3% | 25.3% | 30.7% | 29.7% | 9.2% |
|---|
| Surge Energy Inc ($SGY) | 55.0% | 0.0% | 46.1% | 13.0% | -37.7% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (163 companies) | 40.9% | 48.7% | 39.2% | 48.9% | 31.6% |
|---|
| Surge Energy Inc ($SGY) | 131.7% | 114.7% | 56.5% | 38.4% | 31.6% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (166 companies) | 4.5% | 3.3% | 4.7% | 5.3% | -7.2% |
|---|
| Surge Energy Inc ($SGY) | 3.8% | -13.8% | 2.2% | -7.7% | -16.5% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (137 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.7x |
|---|
| Surge Energy Inc ($SGY) | 1.2x | 2,819.2x | 2.8x | 11.2x | |
