Paramount Resources Ltd Net Debt / EBITDA surged on 412.6x from 8.9x to 421.5x in 2015 and Debt jumped on 43.3%
17.03.2016 • About Paramount Resources Ltd (
$POU) • By InTwits
Paramount Resources Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Paramount Resources Ltd doesn't have a profitable business model yet: 2015 ROIC is -26.2%
- EBITDA Margin is quite volatile: 1.2% in 2015, 43.0% in 2014, 18.0% in 2013, 23.9% in 2012, 23.4% in 2011
- Paramount Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 282.6%. At the same time it's a lot of higher than industry average of 74.3%.
- CAPEX is quite volatile: 62.5 in 2015, 23.9 in 2014, 36.0 in 2013, 62.0 in 2012, 65.4 in 2011
- The company has unprofitable business model: ROIC is at -26.2%
- It operates with high leverage: Net Debt/EBITDA is 421.5x while industry average is 41.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Paramount Resources Ltd ($POU) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 196.0 | 159.1 | 219.9 | 332.5 | 366.4 | 10.2% |
| Gross Profit | 113.0 | 83.3 | 127.5 | 225.3 | 210.6 | -6.5% |
| SG&A | 16.9 | 18.1 | 19.5 | 23.9 | 23.9 | -0.1% |
| EBITDA | 45.9 | 38.0 | 39.6 | 142.9 | 4.4 | -96.9% |
| Net Income | -232.0 | -61.9 | -59.1 | -71.7 | -901.3 | 1,156.8% |
Balance Sheet
|
|---|
| Cash | 29.0 | 146.7 | 10.7 | 18.3 | 11.9 | -34.8% |
| Short Term Debt | 22.8 | 40.7 | 75.6 | 81.5 | 100.9 | 23.8% |
| Long Term Debt | 427.2 | 660.7 | 882.6 | 1,210.4 | 1,750.2 | 44.6% |
Cash flow
|
|---|
| Capex | 525.2 | 623.6 | 736.2 | 941.5 | 494.0 | -47.5% |
Ratios
|
|---|
| Revenue growth | 20.1% | -18.8% | 38.2% | 51.2% | 10.2% | |
| EBITDA growth | -386.7% | -17.4% | 4.2% | 261.2% | -96.9% | |
| Gross Margin | 57.7% | 52.4% | 58.0% | 67.8% | 57.5% | -10.3% |
| EBITDA Margin | 23.4% | 23.9% | 18.0% | 43.0% | 1.2% | -41.8% |
| Net Income Margin | -118.4% | -38.9% | -26.9% | -21.6% | -246.0% | -224.4% |
| SG&A, % of revenue | 8.6% | 11.4% | 8.9% | 7.2% | 6.5% | -0.7% |
| CAPEX, % of revenue | 268.0% | 392.0% | 334.8% | 283.2% | 134.8% | -148.4% |
| ROIC | -31.9% | -19.0% | -6.9% | -4.0% | -26.2% | -22.2% |
| ROE | -30.8% | -7.4% | -6.3% | -6.0% | -94.8% | -88.8% |
| Net Debt/EBITDA | 9.2x | 14.6x | 23.9x | 8.9x | 421.5x | 412.6x |
Revenue and profitability
The company's Revenue surged on 10.2% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 19.8% to 15.9% in 2015.
Gross Margin dropped on 10.3 pp from 67.8% to 57.5% in 2015. SG&A as a % of Revenue decreased slightly on 0.67 pp from 7.2% to 6.5% in 2015.
Net Income marign dropped on 224 pp from -21.6% to -246% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 135% in 2015. Paramount Resources Ltd's CAPEX/Revenue dropped on 257 pp from 392% in 2012 to 135% in 2015. It's average level of CAPEX/Revenue for the last three years was 251%.To fuel this fast growth Paramount Resources Ltd made large investments to CAPEX (11,322% of EBITDA).
Return on investment
The company operates at negative ROIC (-26.15%) and ROE (-94.78%). ROIC dropped on 22.2 pp from -4.0% to -26.2% in 2015. ROE dropped on 88.8 pp from -6.0% to -94.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 421.5x and Debt / EBITDA is 424.3x. Net Debt / EBITDA jumped on 412.6x from 8.9x to 421.5x in 2015. Debt jumped on 43.3% in 2015 while cash dropped on 34.8% in 2015.
Management team
The company's CEO James H T Riddell "Jim" is a founder and has spent 3 years at the company. The company's CFO is Bernard K Lee "Bernie". Bernard K Lee "Bernie" has 11 years tenure at the company.
Appendix 1: Peers in Energy
Below you can find Paramount 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 ($SPE) | | 16.6% | 29.9% | 923.7% | -3.7% |
| |
|---|
| Median (162 companies) | 59.0% | 9.5% | 17.1% | 18.5% | -27.6% |
|---|
| Paramount Resources Ltd ($POU) | | -18.8% | 38.2% | 51.2% | 10.2% |
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 ($SFD) | -43.2% | 65.6% | 36.0% | 87.3% | |
| |
|---|
| Median (140 companies) | 34.0% | 29.3% | 31.5% | 29.6% | 34.2% |
|---|
| Paramount Resources Ltd ($POU) | 57.7% | 52.4% | 58.0% | 67.8% | 57.5% |
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% | -115.8% |
| Advantage Oil & Gas Ltd ($AAV) | -4.0% | 5.2% | 66.1% | 87.8% | 81.8% |
| |
|---|
| Median (161 companies) | 25.8% | 25.0% | 31.5% | 29.6% | 8.4% |
|---|
| Paramount Resources Ltd ($POU) | 23.4% | 23.9% | 18.0% | 43.0% | 1.2% |
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 ($BKX) | 139.2% | 195.8% | 789.1% | 316.6% | 52.8% |
| |
|---|
| Median (164 companies) | 42.0% | 50.0% | 39.2% | 48.8% | 31.6% |
|---|
| Paramount Resources Ltd ($POU) | 268.0% | 392.0% | 334.8% | 283.2% | 134.8% |
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 ($COQ) | | | | 22.9% | |
| |
|---|
| Median (167 companies) | 4.5% | 3.2% | 4.6% | 5.3% | -7.9% |
|---|
| Paramount Resources Ltd ($POU) | -31.9% | -19.0% | -6.9% | -4.0% | -26.2% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (138 companies) | 1.2x | 1.6x | 1.5x | 1.3x | 2.9x |
|---|
| Paramount Resources Ltd ($POU) | 9.2x | 14.6x | 23.9x | 8.9x | 421.5x |
