Yangarra Resources Ltd reports 120% Net Income decline and 24.8 pp EBITDA Margin decline from 77.4% to 52.6%
16.03.2016 • About Yangarra Resources Ltd (
$YGR) • By InTwits
Yangarra Resources Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Yangarra Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 168.6%. At the same time it's a lot of higher than industry average of 73.9%.
- CAPEX is quite volatile: 40.7 in 2015, 79.8 in 2014, 47.0 in 2013, 24.4 in 2012, 65.0 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Yangarra Resources Ltd ($YGR) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 20.383 | 22.294 | 34.039 | 51.929 | 33.207 | -36.1% |
| Gross Profit | 8.482 | -1.575 | 13.856 | 26.424 | 25.359 | -4.0% |
| SG&A | | | | | 1.671 | |
| EBITDA | 13.729 | 14.672 | 25.999 | 40.179 | 17.453 | -56.6% |
| Net Income | 1.386 | -0.218 | 2.586 | 24.372 | -4.781 | -119.6% |
Balance Sheet
|
|---|
| Cash | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Short Term Debt | 26.246 | 32.139 | 32.112 | 55.602 | 62.131 | 11.7% |
| Long Term Debt | 0.000 | 0.000 | 7.787 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 65.019 | 24.449 | 47.022 | 79.807 | 40.732 | -49.0% |
Ratios
|
|---|
| Revenue growth | 214.0% | 9.4% | 52.7% | 52.6% | -36.1% | |
| EBITDA growth | 800.2% | 6.9% | 77.2% | 54.5% | -56.6% | |
| Gross Margin | 41.6% | -7.1% | 40.7% | 50.9% | 76.4% | 25.5% |
| EBITDA Margin | 67.4% | 65.8% | 76.4% | 77.4% | 52.6% | -24.8% |
| Net Income Margin | 6.8% | -1.0% | 7.6% | 46.9% | -14.4% | -61.3% |
| SG&A, % of revenue | | | | | 5.0% | 5.0% |
| CAPEX, % of revenue | 319.0% | 109.7% | 138.1% | 153.7% | 122.7% | -31.0% |
| ROIC | 6.8% | -3.4% | 9.1% | 12.9% | 2.5% | -10.4% |
| ROE | 2.2% | -0.3% | 3.0% | 20.0% | -3.1% | -23.1% |
| Net Debt/EBITDA | 1.9x | 2.2x | 1.5x | 1.4x | 3.6x | 2.2x |
Revenue and profitability
The company's Revenue dropped on 36.1% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 24.8 pp from 77.4% to 52.6% in 2015.
Gross Margin jumped on 25.5 pp from 50.9% to 76.4% in 2015.
Net Income marign dropped on 61.3 pp from 46.9% to -14.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Yangarra Resources Ltd had CAPEX/Revenue of 123%. Yangarra Resources Ltd's CAPEX/Revenue jumped on 13.0 pp from 110% in 2012 to 123% in 2015. For the last three years the average CAPEX/Revenue was 138%.Battling declining revenue Yangarra Resources Ltd made large investments to CAPEX (233% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (2.52%) and negative ROE (-3.09%). ROIC dropped on 10.4 pp from 12.9% to 2.5% in 2015. ROE dropped on 23.1 pp from 20.0% to -3.1% in 2015.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and 3.6x Debt / EBITDA. Net Debt / EBITDA jumped on 2.2x from 1.4x to 3.6x in 2015. Debt jumped on 11.7% in 2015 while cash didn't change in 2015.
Appendix 1: Peers in Energy
Below you can find Yangarra Resources Ltd 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (161 companies) | 41.6% | 9.6% | 17.0% | 18.3% | -27.4% |
|---|
| Yangarra Resources Ltd ($YGR) | | 9.4% | 52.7% | 52.6% | -36.1% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 33.3% | 29.3% | 31.5% | 29.6% | 33.6% |
|---|
| Yangarra Resources Ltd ($YGR) | 41.6% | -7.1% | 40.7% | 50.9% | 76.4% |
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% | -115.8% |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (160 companies) | 25.3% | 24.8% | 30.7% | 29.3% | 8.1% |
|---|
| Yangarra Resources Ltd ($YGR) | 67.4% | 65.8% | 76.4% | 77.4% | 52.6% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (163 companies) | 40.9% | 48.7% | 39.2% | 48.6% | 31.3% |
|---|
| Yangarra Resources Ltd ($YGR) | 319.0% | 109.7% | 138.1% | 153.7% | 122.7% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (166 companies) | 4.4% | 3.3% | 4.6% | 5.0% | -7.5% |
|---|
| Yangarra Resources Ltd ($YGR) | 6.8% | -3.4% | 9.1% | 12.9% | 2.5% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (137 companies) | 1.2x | 1.5x | 1.5x | 1.4x | 2.6x |
|---|
| Yangarra Resources Ltd ($YGR) | 1.9x | 2.2x | 1.5x | 1.4x | 3.6x |
