Connacher Oil and Gas Ltd reports 599% EBITDA decline and 49.7% Revenue decline
29.03.2016 • About Connacher Oil and Gas Ltd (
$CLC) • By InTwits
Connacher Oil and Gas Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Connacher Oil and Gas Ltd is a company in decline: 2015 revenue growth was -49.7%, 5 years revenue CAGR was -17.9%
- Connacher Oil and Gas Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -0.5%0
- Connacher Oil and Gas Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.2%. At the same time it's in pair with industry average of 5.1%.
- CAPEX is quite volatile: 21.1 in 2015, 80.2 in 2014, 93.7 in 2013, 37.1 in 2012, 71.2 in 2011
- The company has unprofitable business model: ROIC is at -41.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Connacher Oil and Gas Ltd ($CLC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 430.0 | 384.9 | 427.9 | 437.5 | 220.3 | -49.7% |
| Gross Profit | 93.4 | 67.7 | 131.5 | 104.7 | -281.6 | -369.0% |
| SG&A | 29.4 | 41.1 | 29.2 | 33.4 | 23.2 | -30.4% |
| EBITDA | 86.8 | 43.4 | 94.5 | 58.8 | -293.8 | -599.4% |
| Net Income | -114.1 | -84.5 | -122.4 | -211.8 | -42.3 | -80.0% |
Balance Sheet
|
|---|
| Cash | 117.0 | 126.8 | 55.6 | 87.7 | 47.2 | -46.1% |
| Short Term Debt | 102.0 | 0.0 | 0.0 | 1.5 | 2.1 | 41.5% |
| Long Term Debt | 856.1 | 849.9 | 890.8 | 1,089.5 | 255.2 | -76.6% |
Cash flow
|
|---|
| Capex | 71.2 | 37.1 | 93.7 | 80.2 | 21.1 | -73.7% |
Ratios
|
|---|
| Revenue growth | -27.1% | -10.5% | 11.1% | 2.2% | -49.7% | |
| EBITDA growth | -2.3% | -50.0% | 117.8% | -37.8% | -599.4% | |
| Gross Margin | 21.7% | 17.6% | 30.7% | 23.9% | -127.9% | -151.8% |
| EBITDA Margin | 20.2% | 11.3% | 22.1% | 13.4% | -133.4% | -146.8% |
| Net Income Margin | -26.5% | -21.9% | -28.6% | -48.4% | -19.2% | 29.2% |
| SG&A, % of revenue | 6.8% | 10.7% | 6.8% | 7.6% | 10.5% | 2.9% |
| CAPEX, % of revenue | 16.6% | 9.6% | 21.9% | 18.3% | 9.6% | -8.8% |
| ROIC | 0.7% | -3.1% | 1.0% | -3.6% | -41.8% | -38.2% |
| ROE | -24.2% | -22.1% | -43.3% | -181.9% | -15.8% | 166.1% |
| Net Debt/EBITDA | 9.7x | 16.7x | 8.8x | 17.1x | | -17.1x |
Revenue and profitability
Connacher Oil and Gas Ltd's Revenue dropped on 49.7% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 147 pp from 13.4% to -133% in 2015.
Gross Margin dropped on 152 pp from 23.9% to -128% in 2015. SG&A as a % of Revenue increased on 2.9 pp from 7.6% to 10.5% in 2015.
Net Income marign jumped on 29.2 pp from -48.4% to -19.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
Connacher Oil and Gas Ltd's CAPEX/Revenue was 9.6% in 2015. The company's CAPEX/Revenue showed almost no change from 2012 to 2015. It's average level of CAPEX/Revenue for the last three years was 16.6%.
Return on investment
The company operates at negative ROIC (-41.81%) and ROE (-15.81%). ROIC dropped on 38.2 pp from -3.6% to -41.8% in 2015. ROE jumped on 166 pp from -182% to -15.8% in 2015.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 17.1x from 17.1x to in 2015. Debt dropped on 76.4% in 2015 while cash dropped on 46.1% in 2015.
Appendix 1: Peers in Energy
Below we provide Connacher Oil and Gas Ltd 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 |
|---|
| 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 ($HWO) | | 14.9% | 4.4% | 12.5% | 22.2% |
| |
|---|
| Median (131 companies) | 59.0% | 9.5% | 17.3% | 18.9% | -27.7% |
|---|
| Connacher Oil and Gas Ltd ($CLC) | | -10.5% | 11.1% | 2.2% | -49.7% |
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 ($PIF) | 58.4% | 39.9% | 33.6% | 32.0% | 86.7% |
| |
|---|
| Median (118 companies) | 34.3% | 29.7% | 31.6% | 30.3% | 33.9% |
|---|
| Connacher Oil and Gas Ltd ($CLC) | 21.7% | 17.6% | 30.7% | 23.9% | -127.9% |
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 ($INE) | 109.4% | 111.8% | 110.0% | 82.9% | 83.4% |
| |
|---|
| Median (134 companies) | 25.8% | 25.0% | 31.5% | 29.7% | 8.1% |
|---|
| Connacher Oil and Gas Ltd ($CLC) | 20.2% | 11.3% | 22.1% | 13.4% | -133.4% |
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 ($TOG) | 6,833.4% | 453.8% | 466.9% | 104.5% | 229.4% |
| |
|---|
| Median (134 companies) | 43.3% | 51.1% | 39.2% | 48.9% | 31.6% |
|---|
| Connacher Oil and Gas Ltd ($CLC) | 16.6% | 9.6% | 21.9% | 18.3% | 9.6% |
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 ($MCR) | 33.6% | 52.7% | 47.6% | 10.8% | 12.4% |
| |
|---|
| Median (134 companies) | 4.5% | 3.2% | 4.6% | 5.3% | -8.0% |
|---|
| Connacher Oil and Gas Ltd ($CLC) | 0.7% | -3.1% | 1.0% | -3.6% | -41.8% |
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 ($PSH) | 0.1x | | | 21.7x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| Etrion Corp ($ETX) | 12.5x | 8.2x | 8.3x | 12.8x | 13.6x |
| |
|---|
| Median (138 companies) | 1.2x | 1.6x | 1.5x | 1.3x | 2.7x |
|---|
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
