Cequence Energy Ltd reports 415% Net Income decline and 36.5% Revenue decline
29.03.2016 • About Cequence Energy Ltd (
$CQE) • By InTwits
Cequence Energy Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cequence Energy Ltd doesn't have a profitable business model yet: 2015 ROIC is -53.1%
- Cequence Energy Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -2.7%0
- Cequence Energy Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 131.0%. At the same time it's a lot of higher than industry average of 70.3%.
- CAPEX is quite volatile: 63.3 in 2015, 182 in 2014, 118 in 2013, 91.7 in 2012, 150 in 2011
- The company has unprofitable business model: ROIC is at -53.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cequence Energy Ltd ($CQE) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 88.3 | 70.9 | 93.3 | 122.9 | 78.0 | -36.5% |
| Gross Profit | -1.0 | -26.7 | 15.8 | 19.5 | 39.9 | 104.9% |
| SG&A | | | | | 8.0 | |
| EBITDA | 37.3 | 26.9 | 47.9 | 75.2 | -199.6 | -365.5% |
| Net Income | -20.2 | -17.7 | -2.6 | 79.4 | -250.1 | -415.1% |
Balance Sheet
|
|---|
| Cash | 0.4 | 0.0 | 0.0 | 27.7 | 13.2 | -52.1% |
| Short Term Debt | 11.6 | 23.2 | 22.8 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 56.6 | 57.2 | 57.8 | 1.1% |
Cash flow
|
|---|
| Capex | 149.6 | 91.7 | 117.9 | 182.5 | 63.3 | -65.3% |
Ratios
|
|---|
| Revenue growth | 80.8% | -19.7% | 31.6% | 31.7% | -36.5% | |
| EBITDA growth | 103.7% | -27.9% | 77.7% | 57.1% | -365.5% | |
| Gross Margin | -1.1% | -37.7% | 16.9% | 15.9% | 51.2% | 35.3% |
| EBITDA Margin | 42.3% | 38.0% | 51.3% | 61.2% | -256.0% | -317.2% |
| Net Income Margin | -22.8% | -24.9% | -2.8% | 64.6% | -320.6% | -385.2% |
| SG&A, % of revenue | | | | | 10.2% | 10.2% |
| CAPEX, % of revenue | 169.5% | 129.3% | 126.4% | 148.5% | 81.2% | -67.3% |
| ROIC | -6.9% | -10.7% | 1.1% | 1.5% | -53.1% | -54.7% |
| ROE | -6.0% | -4.4% | -0.6% | 16.6% | -63.5% | -80.2% |
| Net Debt/EBITDA | 0.3x | 0.9x | 1.7x | 0.4x | | -0.4x |
Revenue and profitability
The company's Revenue dropped on 36.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 317 pp from 61.2% to -256% in 2015.
Gross Margin surged on 35.3 pp from 15.9% to 51.2% in 2015.
Net Income marign dropped on 385 pp from 64.6% to -321% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 81.2% in 2015. CAPEX/Revenue dropped on 48.1 pp from 129% in 2012 to 81.2% in 2015. It's average CAPEX/Revenue for the last three years was 119%.
Return on investment
The company operates at negative ROIC (-53.11%) and ROE (-63.53%). ROIC dropped on 54.7 pp from 1.5% to -53.1% in 2015. ROE dropped on 80.2 pp from 16.6% to -63.5% in 2015.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 0.4x to in 2015. Debt increased slightly on 1.1% in 2015 while cash dropped on 52.1% in 2015.
Appendix 1: Peers in Energy
Below you can find Cequence Energy 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 |
|---|
| ONEnergy Inc ($OEG) | | | | 6,002.6% | 231.5% |
| Seven Generations Energy Ltd ($VII) | | | 115.7% | 340.2% | 39.0% |
| Crown Point Energy Inc ($CWV) | | 177.6% | 110.5% | -34.4% | 38.3% |
| Oando Energy Resources Inc ($OER) | | | -5.9% | 200.1% | 34.7% |
| High Arctic Energy Services Inc ($HWO) | | 14.9% | 4.4% | 12.5% | 22.2% |
| |
|---|
| Median (131 companies) | 59.0% | 9.5% | 17.1% | 18.5% | -27.7% |
|---|
| Cequence Energy Ltd ($CQE) | | -19.7% | 31.6% | 31.7% | -36.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Americas Petrogas Inc ($BOE) | | 77.1% | 43.3% | -34.3% | 121.1% |
| TransAlta Renewables Inc ($RNW) | | | 94.4% | 94.5% | 94.5% |
| Serinus Energy Inc ($SEN) | 80.4% | 80.5% | 76.5% | 86.8% | 88.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | 88.5% |
| Polaris Infrastructure Inc ($PIF) | 58.4% | 39.9% | 33.6% | 32.0% | 86.7% |
| |
|---|
| Median (118 companies) | 34.3% | 29.7% | 31.6% | 30.3% | 33.6% |
|---|
| Cequence Energy Ltd ($CQE) | -1.1% | -37.7% | 16.9% | 15.9% | 51.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Granite Oil Corp ($GXO) | 9.2% | 59.4% | 64.5% | 70.8% | 201.9% |
| Perpetual Energy Inc ($PMT) | 26.1% | 35.5% | 70.7% | 58.0% | 110.3% |
| Petro Rio SA ($PRJ) | -4,925.5% | -4,809.7% | -6,899.7% | 28.2% | 90.7% |
| Peyto Exploration & Development Corp ($PEY) | 83.6% | 86.1% | 83.2% | 86.3% | 84.6% |
| Innergex Renewable Energy Inc ($INE) | 109.4% | 111.8% | 110.0% | 82.9% | 83.4% |
| |
|---|
| Median (134 companies) | 25.5% | 24.6% | 31.1% | 29.6% | 8.1% |
|---|
| Cequence Energy Ltd ($CQE) | 42.3% | 38.0% | 51.3% | 61.2% | -256.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Primeline Energy Holdings Inc ($PEH) | | | | | 1,091.8% |
| Oryx Petroleum Corp Ltd ($OXC) | | | | 1,997.8% | 712.8% |
| WesternZagros Resources Ltd ($WZR) | | | | | 385.6% |
| Athabasca Oil Corp ($ATH) | 176.2% | 2,426.4% | 596.6% | 504.7% | 315.2% |
| TORC Oil & Gas Ltd ($TOG) | 6,833.4% | 453.8% | 466.9% | 104.5% | 229.4% |
| |
|---|
| Median (134 companies) | 42.0% | 50.0% | 39.2% | 48.8% | 31.3% |
|---|
| Cequence Energy Ltd ($CQE) | 169.5% | 129.3% | 126.4% | 148.5% | 81.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Granite Oil Corp ($GXO) | -10.9% | 4.4% | 10.8% | 16.1% | 37.7% |
| High Arctic Energy Services Inc ($HWO) | 27.0% | 31.4% | 26.3% | 24.9% | 24.2% |
| Petro Rio SA ($PRJ) | -15.5% | -9.6% | -12.7% | -3.5% | 19.4% |
| Perpetual Energy Inc ($PMT) | -10.6% | -10.1% | 9.1% | 10.4% | 16.1% |
| Macro Enterprises Inc ($MCR) | 33.6% | 52.7% | 47.6% | 10.8% | 12.4% |
| |
|---|
| Median (134 companies) | 4.5% | 3.2% | 4.6% | 5.3% | -8.0% |
|---|
| Cequence Energy Ltd ($CQE) | -6.9% | -10.7% | 1.1% | 1.5% | -53.1% |
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 ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (138 companies) | 1.2x | 1.6x | 1.5x | 1.4x | 2.7x |
|---|
| Cequence Energy Ltd ($CQE) | 0.3x | 0.9x | 1.7x | 0.4x | |
