Imperial Oil Ltd Net Income jumped on 93.0% in 2016 while EBITDA Margin decreased on 5.2 pp from 13.0% to 7.8%
31.01.2017 • About Imperial Oil Ltd (
$IMO) • By InTwits
Imperial Oil Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Imperial Oil Ltd is a company in decline: 2016 revenue growth was -7.1%, 5 years revenue CAGR was -4.3%
- Imperial Oil Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.1%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 1,073 in 2016, 2,994 in 2015, 5,290 in 2014, 6,297 in 2013, 5,478 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Imperial Oil Ltd ($IMO) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 29,715 | 31,299 | 34,669 | 25,188 | 23,399 | -7.1% |
| Gross Profit | 6,782 | 5,856 | 6,528 | 4,470 | 3,055 | -31.7% |
| SG&A | 934 | 928 | 947 | 968 | 977 | 0.9% |
| EBITDA | 5,618 | 4,651 | 5,386 | 3,280 | 1,832 | -44.1% |
| Net Income | 3,766 | 2,828 | 3,785 | 1,122 | 2,165 | 93.0% |
Balance Sheet
|
|---|
| Cash | 482 | 272 | 215 | 203 | 391 | 92.6% |
| Short Term Debt | 472 | 1,843 | 1,978 | 1,952 | 202 | -89.7% |
| Long Term Debt | 1,175 | 4,444 | 4,913 | 6,564 | 5,032 | -23.3% |
Cash flow
|
|---|
| Capex | 5,478 | 6,297 | 5,290 | 2,994 | 1,073 | -64.2% |
Ratios
|
|---|
| Revenue growth | 1.9% | 5.3% | 10.8% | -27.3% | -7.1% | |
| EBITDA growth | 13.9% | -17.2% | 15.8% | -39.1% | -44.1% | |
| Gross Margin | 22.8% | 18.7% | 18.8% | 17.7% | 13.1% | -4.7% |
| EBITDA Margin | 18.9% | 14.9% | 15.5% | 13.0% | 7.8% | -5.2% |
| Net Income Margin | 12.7% | 9.0% | 10.9% | 4.5% | 9.3% | 4.8% |
| SG&A, % of revenue | 3.1% | 3.0% | 2.7% | 3.8% | 4.2% | 0.3% |
| CAPEX, % of revenue | 18.4% | 20.1% | 15.3% | 11.9% | 4.6% | -7.3% |
| ROIC | 25.3% | 14.0% | 13.6% | 5.3% | 0.6% | -4.7% |
| ROE | 25.4% | 15.8% | 18.0% | 4.9% | 8.9% | 4.1% |
| Net Debt/EBITDA | 0.2x | 1.3x | 1.2x | 2.5x | 2.6x | 0.1x |
Imperial Oil Ltd ($IMO) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 4,786 | 5,810 | 6,134 | 6,669 | -17.4% | -15.6% | -8.4% | 14.7% |
| EBITDA | 242 | 150 | 725 | 715 | -71.5% | -83.5% | -27.9% | 37.5% |
| Net Income | -101 | -181 | 1,003 | 1,444 | -124.0% | -250.8% | 109.4% | 1,315.7% |
Balance Sheet
|
|---|
| Cash | 155 | 195 | 248 | 391 | 158.3% | 596.4% | -32.2% | 92.6% |
| Short Term Debt | 1,843 | 1,862 | 271 | 202 | -4.9% | -5.8% | -86.1% | -89.7% |
| Long Term Debt | 7,052 | 7,046 | 7,039 | 5,032 | 25.7% | 17.3% | 8.7% | -23.3% |
Ratios
|
|---|
| Gross Margin | 11.1% | 7.9% | 16.6% | 15.8% | -8.4% | -9.5% | -2.7% | 1.1% |
| EBITDA Margin | 5.1% | 2.6% | 11.8% | 10.7% | -9.6% | -10.6% | -3.2% | 1.8% |
| Net Income Margin | -2.1% | -3.1% | 16.4% | 21.7% | -9.4% | -4.9% | 9.2% | 19.9% |
Revenue and profitability
The company's Revenue decreased on 7.1%. Annual revenue decline showed slowdown in 16Q4 - revenue surged on 14.7%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.2 pp from 13.0% to 7.8% in 2016.
Gross Margin decreased on 4.7 pp from 17.7% to 13.1% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 4.8 pp from 4.5% to 9.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.6% in 2016. Imperial Oil Ltd showed big decline in CAPEX/Revenue of 15.5 pp from 20.1% in 2013 to 4.6% in 2016. It's average level of CAPEX/Revenue for the last three years was 10.6%.The company invested a big chunk of EBITDA (58.6%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (0.57%) and ROE (8.94%). ROIC decreased on 4.7 pp from 5.3% to 0.57% in 2016. ROE increased on 4.1 pp from 4.9% to 8.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.9x. Net Debt / EBITDA surged on 0.1x from 2.5x to 2.6x in 2016. Debt dropped on 38.5% while cash surged on 92.6%.
Management team
Imperial Oil Ltd's CEO is Richard Michael Kruger "Rich". Richard Michael Kruger "Rich" has 5 years tenure at the company.
Appendix 1: Peers in Energy
Below we provide Imperial Oil 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | | -18.4% | 141.2% |
| Seven Generations Energy Ltd ($VII) | | 115.7% | 340.2% | 39.0% | 94.4% |
| Athabasca Oil Corp ($ATH) | | 342.7% | 5.5% | -22.9% | 73.1% |
| Painted Pony Petroleum Ltd ($PPY) | | 41.3% | 56.0% | -42.5% | 60.7% |
| ONEnergy Inc ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 16.2% | 17.0% | -29.5% | -19.1% |
|---|
| Imperial Oil Ltd ($IMO) | | 5.3% | 10.8% | -27.3% | -7.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($BOE) | 77.1% | 43.3% | -34.3% | 121.1% | |
| TransAlta Renewables Inc ($RNW) | | 94.4% | 94.5% | 94.5% | 91.1% |
| Serinus Energy Inc ($SEN) | 80.5% | 76.5% | 86.8% | 88.5% | |
| Advantage Oil & Gas Ltd ($AAV) | 62.0% | 84.5% | 92.5% | 88.5% | 90.3% |
| Polaris Infrastructure Inc ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
| |
|---|
| Median (114 companies) | 32.0% | 32.2% | 32.4% | 33.9% | 32.5% |
|---|
| Imperial Oil Ltd ($IMO) | 22.8% | 18.7% | 18.8% | 17.7% | 13.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($GXO) | 59.4% | 64.5% | 70.8% | 201.9% | |
| Perpetual Energy Inc ($PMT) | 35.5% | 70.7% | 58.0% | 110.3% | |
| Petro Rio SA ($PRJ) | -4,809.7% | -6,899.7% | 28.2% | 90.7% | |
| Peyto Exploration & Development Corp ($PEY) | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% |
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.9% | 35.7% | 28.9% | 8.1% | 29.2% |
|---|
| Imperial Oil Ltd ($IMO) | 18.9% | 14.9% | 15.5% | 13.0% | 7.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($OXC) | | | 1,997.8% | 712.8% | |
| WesternZagros Resources Ltd ($WZR) | | | | 385.6% | |
| Athabasca Oil Corp ($ATH) | 2,426.4% | 596.6% | 504.7% | 315.2% | 83.7% |
| TORC Oil & Gas Ltd ($TOG) | 453.8% | 466.9% | 104.5% | 229.4% | 76.3% |
| Seven Generations Energy Ltd ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 43.8% | 39.2% | 45.6% | 28.1% | 23.8% |
|---|
| Imperial Oil Ltd ($IMO) | 18.4% | 20.1% | 15.3% | 11.9% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($ERF) | -17.3% | 10.2% | 11.5% | -55.5% | 16.3% |
| Whitecap Resources Inc ($WCP) | 7.1% | 8.1% | 9.6% | -10.6% | 10.1% |
| Ecopetrol SA ($ECP) | 29.3% | 24.4% | 16.5% | 3.0% | 9.6% |
| Parkland Fuel Corp ($PKI) | 22.3% | 23.3% | 9.9% | 7.8% | 8.6% |
| Inter Pipeline Ltd ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Imperial Oil Ltd ($IMO) | 25.3% | 14.0% | 13.6% | 5.3% | 0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($PXX) | -0.2x | -0.1x | 0.2x | 3,726.1x | -0.2x |
| Paramount Resources Ltd ($POU) | 14.6x | 23.9x | 8.9x | 421.5x | -5.8x |
| Precision Drilling Corp ($PD) | 2.2x | 1.9x | 2.0x | 68.4x | 7.6x |
| Trican Well Service Ltd ($TCW) | 2.5x | 3.4x | 2.9x | 31.4x | |
| Trilogy Energy Corp ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.6x | 1.5x | 1.4x | 2.7x | 2.7x |
|---|
| Imperial Oil Ltd ($IMO) | 0.2x | 1.3x | 1.2x | 2.5x | 2.6x |
