Lonestar West Inc reports 66.4% CAPEX decline while 6.5% Revenue growth
19.04.2016 • About Lonestar West Inc (
$LSI) • By InTwits
Lonestar West Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lonestar West Inc doesn't have a profitable business model yet: 2015 ROIC is -4.1%
- EBITDA Margin is declining: 7.8% in 2015 vs. 13.4% in 2014 vs. 15.4% in 2011
- Lonestar West Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.2%. At the same time it's in pair with industry average of 83.1%.
- CAPEX is quite volatile: 9.2 in 2015, 27.3 in 2014, 6.8 in 2013, 4.9 in 2012, 1.6 in 2011
- The company has unprofitable business model: ROIC is at -4.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Lonestar West Inc ($LSI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11.146 | 18.618 | 27.896 | 47.253 | 50.304 | 6.5% |
| Gross Profit | 2.057 | 3.551 | 4.636 | 6.357 | 10.176 | 60.1% |
| SG&A | | | 1.956 | 4.230 | 5.656 | 33.7% |
| EBITDA | 1.716 | 2.914 | 3.757 | 6.320 | 3.913 | -38.1% |
| Net Income | 0.514 | 1.309 | 1.446 | 1.073 | -6.372 | -694.1% |
Balance Sheet
|
|---|
| Cash | 0.000 | 0.222 | 1.527 | 1.622 | 1.942 | 19.8% |
| Short Term Debt | 1.080 | 1.847 | 3.031 | 10.475 | 14.189 | 35.5% |
| Long Term Debt | 1.508 | 3.794 | 8.528 | 14.372 | 18.773 | 30.6% |
Cash flow
|
|---|
| Capex | 1.601 | 4.871 | 6.762 | 27.305 | 9.173 | -66.4% |
Ratios
|
|---|
| Revenue growth | 76.0% | 67.0% | 49.8% | 69.4% | 6.5% | |
| EBITDA growth | 267.1% | 69.8% | 28.9% | 68.2% | -38.1% | |
| Gross Margin | 18.5% | 19.1% | 16.6% | 13.5% | 20.2% | 6.8% |
| EBITDA Margin | 15.4% | 15.7% | 13.5% | 13.4% | 7.8% | -5.6% |
| Net Income Margin | 4.6% | 7.0% | 5.2% | 2.3% | -12.7% | -14.9% |
| SG&A, % of revenue | | | 7.0% | 9.0% | 11.2% | 2.3% |
| CAPEX, % of revenue | 14.4% | 26.2% | 24.2% | 57.8% | 18.2% | -39.5% |
| ROIC | 23.0% | 24.2% | 13.1% | 3.9% | -4.1% | -8.0% |
| ROE | 28.1% | 32.0% | 18.0% | 3.9% | -15.3% | -19.2% |
| Net Debt/EBITDA | 1.5x | 1.9x | 2.7x | 3.7x | 7.9x | 4.3x |
Revenue and profitability
The company's Revenue increased on 6.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 59.8% to 69.2% in 2015.
Gross Margin increased on 6.8 pp from 13.5% to 20.2% in 2015. SG&A as a % of Revenue increased on 2.3 pp from 9.0% to 11.2% in 2015.
Net Income marign dropped on 14.9 pp from 2.3% to -12.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
Lonestar West Inc's CAPEX/Revenue was 18.2% in 2015. The company's CAPEX/Revenue decreased on 7.9 pp from 26.2% in 2012 to 18.2% in 2015. It's average level of CAPEX/Revenue for the last three years was 33.4%.The company investments to CAPEX were large: 234% of EBITDA.
Return on investment
The company operates at negative ROIC (-4.14%) and ROE (-15.25%). ROIC decreased on 8.0 pp from 3.9% to -4.1% in 2015. ROE dropped on 19.2 pp from 3.9% to -15.3% in 2015.
Leverage (Debt)
Debt level is 7.9x Net Debt / EBITDA and 8.4x Debt / EBITDA. Net Debt / EBITDA surged on 4.3x from 3.7x to 7.9x in 2015. Debt surged on 32.7% in 2015 while cash jumped on 19.8% in 2015.
Appendix 1: Peers in Energy
Below we provide Lonestar West 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 |
|---|
| ONEnergy Inc ($OEG) | | | | 6,002.6% | 231.5% |
| Petroshale Inc ($PSH) | | | | 159.9% | 147.8% |
| Toro Oil & Gas Ltd ($TOO) | | 25.2% | -4.6% | -35.6% | 113.4% |
| Ikkuma Resources Corp ($IKM) | | 17.0% | -4.5% | 1,231.1% | 100.3% |
| Seven Generations Energy Ltd ($VII) | | | 115.7% | 340.2% | 39.0% |
| |
|---|
| Median (149 companies) | 61.3% | 9.4% | 17.3% | 18.7% | -27.5% |
|---|
| Lonestar West Inc ($LSI) | | 67.0% | 49.8% | 69.4% | 6.5% |
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% |
| Orca Exploration Group Inc ($ORC.B) | 69.1% | 92.3% | 69.0% | 66.3% | 93.1% |
| Serinus Energy Inc ($SEN) | 80.4% | 80.5% | 76.5% | 86.8% | 88.5% |
| Advantage Oil & Gas Ltd ($AAV) | 70.5% | 62.0% | 84.5% | 92.5% | 88.5% |
| |
|---|
| Median (134 companies) | 34.2% | 29.3% | 31.6% | 29.6% | 33.5% |
|---|
| Lonestar West Inc ($LSI) | 18.5% | 19.1% | 16.6% | 13.5% | 20.2% |
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 ($INE) | 109.4% | 111.8% | 110.0% | 82.9% | 83.4% |
| |
|---|
| Median (151 companies) | 25.7% | 24.8% | 31.5% | 29.7% | 5.5% |
|---|
| Lonestar West Inc ($LSI) | 15.4% | 15.7% | 13.5% | 13.4% | 7.8% |
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% |
| Toro Oil & Gas Ltd ($TOO) | 192.4% | 139.0% | 39.2% | 808.7% | 307.4% |
| |
|---|
| Median (152 companies) | 44.3% | 50.5% | 39.2% | 48.6% | 30.3% |
|---|
| Lonestar West Inc ($LSI) | 14.4% | 26.2% | 24.2% | 57.8% | 18.2% |
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 ($PRJ) | -15.5% | -9.6% | -12.7% | -3.5% | 19.4% |
| Orca Exploration Group Inc ($ORC.B) | 13.3% | 30.0% | 13.0% | 14.3% | 19.0% |
| Perpetual Energy Inc ($PMT) | -10.6% | -10.1% | 9.1% | 10.4% | 16.1% |
| |
|---|
| Median (152 companies) | 4.4% | 3.0% | 4.6% | 5.3% | -9.8% |
|---|
| Lonestar West Inc ($LSI) | 23.0% | 24.2% | 13.1% | 3.9% | -4.1% |
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 ($PSH) | 0.1x | | | 21.7x | 9.9x |
| Connacher Oil and Gas Ltd ($CLC) | 9.7x | 16.7x | 8.8x | 17.1x | |
| Pengrowth Energy Corp ($PGF) | 1.5x | 2.9x | 2.1x | 16.8x | |
| |
|---|
| Median (138 companies) | 1.2x | 1.6x | 1.5x | 1.3x | 2.6x |
|---|
| Lonestar West Inc ($LSI) | 1.5x | 1.9x | 2.7x | 3.7x | 7.9x |
