Cabo Drilling Corp reports 4.9% revenue growth in FY2016 and 3.9 pp EBITDA Margin growth from -5.3% to -1.4%
01.11.2016 • About Cabo Drilling Corp (
$CBE) • By InTwits
Cabo Drilling Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cabo Drilling Corp doesn't have a profitable business model yet: FY2016 ROIC is -13.7%
- The company operates at negative EBITDA Margin: -1.4%
- Cabo Drilling Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 5.4%.
- CAPEX is quite volatile: 0.061 in FY2016, 0.43 in FY2015, 0.40 in FY2014, 1.7 in FY2013, 2.9 in FY2012
- The company has unprofitable business model: ROIC is at -13.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cabo Drilling Corp ($CBE) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 58.951 | 42.534 | 23.014 | 14.651 | 15.363 | 4.9% |
| Gross Profit | 10.750 | 8.210 | 0.817 | 0.859 | 1.386 | 61.3% |
| SG&A | | | | 3.959 | 3.294 | -16.8% |
| EBITDA | 5.758 | 3.939 | -3.121 | -0.778 | -0.220 | |
| Net Income | 1.655 | -0.565 | -5.027 | -6.772 | -2.871 | |
Balance Sheet
|
|---|
| Cash | 0.941 | 0.134 | 0.630 | 0.046 | 0.122 | 163.3% |
| Short Term Debt | 3.239 | 2.076 | 5.035 | 4.884 | 4.474 | -8.4% |
| Long Term Debt | 4.970 | 4.317 | 0.155 | 0.325 | 0.199 | -38.8% |
Cash flow
|
|---|
| Capex | 2.935 | 1.665 | 0.403 | 0.426 | 0.061 | -85.7% |
Ratios
|
|---|
| Revenue growth | 35.8% | -27.8% | -45.9% | -36.3% | 4.9% | |
| EBITDA growth | 117.7% | -31.6% | -179.2% | -75.1% | -71.7% | |
| Gross Margin | 18.2% | 19.3% | 3.5% | 5.9% | 9.0% | 3.2% |
| EBITDA Margin | 9.8% | 9.3% | -13.6% | -5.3% | -1.4% | 3.9% |
| Net Income Margin | 2.8% | -1.3% | -21.8% | -46.2% | -18.7% | 27.5% |
| SG&A, % of revenue | | | | 27.0% | 21.4% | -5.6% |
| CAPEX, % of revenue | 5.0% | 3.9% | 1.8% | 2.9% | 0.4% | -2.5% |
| ROIC | 10.9% | 4.5% | -23.2% | -17.4% | -13.7% | 3.7% |
| ROE | 7.3% | -2.4% | -23.7% | -44.1% | -27.2% | 17.0% |
| Net Debt/EBITDA | 1.3x | 1.6x | | | | 0.0x |
Cabo Drilling Corp ($CBE) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 4 | 5 | 4 | 3 | -6.3% | 39.1% | 26.0% | -32.3% |
| EBITDA | 0 | 0 | 0 | -1 | 34.2% | 529.6% | | |
| Net Income | -1 | -0 | -0 | -1 | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | -0.6% | -22.2% | -52.5% | 163.3% |
| Short Term Debt | 5 | 5 | 4 | 4 | 4.3% | 0.8% | -2.3% | -8.4% |
| Long Term Debt | 0 | 0 | 0 | 0 | 223.3% | 2,106.6% | 381.2% | -38.8% |
Ratios
|
|---|
| Gross Margin | 9.4% | 14.5% | 16.4% | -12.3% | -1.2% | 3.2% | 7.6% | -6.3% |
| EBITDA Margin | 1.4% | 6.1% | 6.5% | -30.7% | 0.4% | 4.7% | 10.1% | -11.8% |
| Net Income Margin | -17.2% | -7.0% | -12.3% | -52.1% | 2.6% | 10.4% | 12.8% | 62.6% |
Revenue and profitability
Cabo Drilling Corp's Revenue increased on 4.9%. Revenue growth showed slow down in FY16Q4 - it was -32.3% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.9 pp from -5.3% to -1.4% in FY2016.
Gross Margin increased on 3.2 pp from 5.9% to 9.0% in FY2016. SG&A as a % of Revenue decreased on 5.6 pp from 27.0% to 21.4% in FY2016.
Net Income marign jumped on 27.5 pp from -46.2% to -18.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.40% in FY2016. CAPEX/Revenue decreased on 3.5 pp from 3.9% in FY2013 to 0.40% in FY2016. For the last three years the average CAPEX/Revenue was 1.7%.
Return on investment
The company operates at negative ROIC (-13.69%) and ROE (-27.15%). ROIC increased on 3.7 pp from -17.4% to -13.7% in FY2016. ROE surged on 17.0 pp from -44.1% to -27.2% in FY2016.
Leverage (Debt)
Debt level is -1.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 10.3% while cash surged on 163%.
Appendix 1: Peers in Basic Materials
Below you can find Cabo Drilling Corp benchmarking vs. other companies in Basic Materials 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Avino Silver & Gold Mines Ltd ($ASM) | | 613.6% | 19.9% | -1.1% | 109.1% |
| Trevali Mining Corp ($TV) | | | | 12.9% | 86.4% |
| Geodrill Ltd ($GEO) | | -43.3% | -4.3% | 34.6% | 53.1% |
| Tahoe Resources Inc ($THO) | | | | 48.4% | 50.9% |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (83 companies) | 100.8% | -2.9% | 1.9% | -1.8% | 6.2% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | 79.7% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | 80.3% |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | 65.6% |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Perseus Mining Ltd ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (95 companies) | 32.1% | 22.4% | 18.6% | 16.5% | 24.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | 73.5% |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | 59.7% |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | 70.3% |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | 62.4% |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (101 companies) | 18.6% | 11.3% | 10.6% | 7.0% | 23.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | 90.3% |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | 122.4% |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (101 companies) | 27.8% | 26.9% | 17.5% | 16.7% | 17.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | 58.5% |
| Western Forest Products Inc ($WEF) | 9.0% | 25.1% | 15.7% | 16.4% | 25.1% |
| Geodrill Ltd ($GEO) | 8.6% | -3.5% | -9.3% | 3.6% | 20.3% |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (100 companies) | 4.9% | 0.7% | 1.6% | -3.6% | 4.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (58 companies) | 0.3x | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
