Birchcliff Energy Ltd reports 203% CAPEX growth and 3.8% Revenue growth
08.02.2017 • About Birchcliff Energy Ltd (
$BIR) • By InTwits
Birchcliff Energy Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Birchcliff Energy Ltd doesn't have a profitable business model yet: 2016 ROIC is 0.3%
- EBITDA Margin is declining: 49.2% in 2016 vs. 61.4% in 2015 vs. 59.8% in 2012
- Birchcliff Energy Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 87.1%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 783 in 2016, 258 in 2015, 455 in 2014, 0.61 in 2013, 0.25 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.7x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Birchcliff Energy Ltd ($BIR) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 233.0 | 289.1 | 436.4 | 305.8 | 317.5 | 3.8% |
| Gross Profit | 163.4 | 212.4 | 342.2 | 206.4 | 199.2 | -3.5% |
| SG&A | 28.0 | 24.8 | 27.1 | 26.0 | 24.0 | -7.9% |
| EBITDA | 139.3 | 221.4 | 318.6 | 187.8 | 156.3 | -16.7% |
| Net Income | 13.2 | 65.4 | 114.3 | -12.2 | -24.3 | |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.1 | 0.1 | 0.1 | 0.0 | -17.5% |
| Short Term Debt | 0.7 | 1.4 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 501.5 | 467.4 | 469.0 | 622.1 | 572.5 | -8.0% |
Cash flow
|
|---|
| Capex | 0.2 | 0.6 | 454.8 | 258.2 | 782.8 | 203.2% |
Ratios
|
|---|
| Revenue growth | -0.9% | 24.1% | 51.0% | -29.9% | 3.8% | |
| EBITDA growth | -1.2% | 58.9% | 43.9% | -41.1% | -16.7% | |
| Gross Margin | 70.1% | 73.5% | 78.4% | 67.5% | 62.8% | -4.8% |
| EBITDA Margin | 59.8% | 76.6% | 73.0% | 61.4% | 49.2% | -12.2% |
| Net Income Margin | 5.7% | 22.6% | 26.2% | -4.0% | -7.7% | -3.7% |
| SG&A, % of revenue | 12.0% | 8.6% | 6.2% | 8.5% | 7.5% | -1.0% |
| CAPEX, % of revenue | 0.1% | 0.2% | 104.2% | 84.4% | 246.6% | 162.1% |
| ROIC | 3.6% | 8.0% | 11.7% | 2.3% | 0.3% | -2.0% |
| ROE | 1.8% | 7.9% | 11.0% | -1.9% | -2.3% | -0.4% |
| Net Debt/EBITDA | 3.6x | 2.1x | 1.5x | 3.3x | 3.7x | 0.3x |
Birchcliff Energy Ltd ($BIR) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 55 | 46 | 91 | 125 | -25.9% | -42.4% | 15.1% | 73.9% |
| EBITDA | 27 | 10 | 50 | 70 | -35.9% | -80.4% | -0.3% | 51.7% |
| Net Income | -12 | -23 | -1 | 12 | | | -122.1% | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | 5.6% | 4.8% | -17.5% | -17.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 647 | 710 | 635 | 573 | 20.6% | 18.3% | 1.2% | -8.0% |
Ratios
|
|---|
| Gross Margin | 58.8% | 55.0% | 60.6% | 68.9% | -5.4% | -14.6% | -8.8% | 2.4% |
| EBITDA Margin | 48.5% | 21.1% | 54.6% | 56.2% | -7.6% | -41.0% | -8.5% | -8.2% |
| Net Income Margin | -21.9% | -50.2% | -1.2% | 9.7% | -17.2% | -45.0% | -7.3% | 22.6% |
Revenue and profitability
Birchcliff Energy Ltd's Revenue increased on 3.8%. Revenue growth showed acceleration in 16Q4 - it increased 73.9% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 25.2 pp from -19.1% to 6.1% in FY2016.
Gross Margin decreased on 4.8 pp from 67.5% to 62.8% in 2016. SG&A as a % of Revenue decreased slightly on 0.96 pp from 8.5% to 7.5% in 2016.
Net Income marign decreased on 3.7 pp from -4.0% to -7.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 247%. The company showed fast CAPEX/Revenue growth of 246 pp from 0.21% in 2013 to 247% in 2016. Average CAPEX/Revenue for the last three years was 145%.Birchcliff Energy Ltd investments to CAPEX were large: 501% of EBITDA.
Return on investment
The company operates at low but positive ROIC (0.33%) and negative ROE (-2.30%). ROIC decreased slightly on 2.0 pp from 2.3% to 0.33% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is 3.7x Net Debt / EBITDA and 3.7x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 3.3x to 3.7x in 2016. Debt decreased on 8.0% while cash dropped on 17.5%.
Appendix 1: Peers in Energy
Below we provide Birchcliff Energy 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) | | 15.4% | 16.9% | -27.7% | -19.1% |
|---|
| Birchcliff Energy Ltd ($BIR) | | 24.1% | 51.0% | -29.9% | 3.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Birchcliff Energy Ltd ($BIR) | 70.1% | 73.5% | 78.4% | 67.5% | 62.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Birchcliff Energy Ltd ($BIR) | 59.8% | 76.6% | 73.0% | 61.4% | 49.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 45.0% | 27.6% | 22.9% |
|---|
| Birchcliff Energy Ltd ($BIR) | 0.1% | 0.2% | 104.2% | 84.4% | 246.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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) | 3.9% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Birchcliff Energy Ltd ($BIR) | 3.6% | 8.0% | 11.7% | 2.3% | 0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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) | 1.5x | 1.4x | 1.4x | 2.6x | 2.6x |
|---|
| Birchcliff Energy Ltd ($BIR) | 3.6x | 2.1x | 1.5x | 3.3x | 3.7x |
