Suncor Energy Inc EBITDA dropped on 14.2% in 2016 and EBITDA Margin decreased slightly on 1.7 pp from 25.9% to 24.2%
08.02.2017 • About Suncor Energy Inc (
$SU) • By InTwits
Suncor Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Suncor Energy Inc is a company in decline: 2016 revenue growth was -8.2%, 5 years revenue CAGR was -6.9%
- EBITDA Margin is declining: 24.2% in 2016 vs. 25.9% in 2015 vs. 29.3% in 2012
- Suncor Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.0%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 906 in FY2016, 635 in FY2015, 529 in FY2014, 537 in FY2013, 317 in FY2012
- The company has potentially unprofitable business model: ROIC is at 0.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Suncor Energy Inc ($SU) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 38,107 | 39,593 | 39,862 | 29,208 | 26,807 | -8.2% |
| Gross Profit | 20,375 | 21,455 | 21,349 | 16,533 | 15,858 | -4.1% |
| SG&A | 8,897 | 9,447 | 9,541 | 8,607 | 9,150 | 6.3% |
| EBITDA | 11,153 | 11,726 | 11,531 | 7,558 | 6,487 | -14.2% |
| Net Income | 2,740 | 3,911 | 2,699 | -1,995 | 434 | |
Balance Sheet
|
|---|
| Cash | 4,385 | 5,202 | 5,495 | 4,049 | 3,016 | -25.5% |
| Short Term Debt | 1,086 | 1,255 | 840 | 817 | 1,327 | 62.4% |
| Long Term Debt | 9,938 | 10,203 | 12,489 | 14,486 | 16,103 | 11.2% |
Cash flow
|
|---|
| Capex | 6,957 | 6,777 | 6,961 | 6,667 | 6,582 | -1.3% |
Ratios
|
|---|
| Revenue growth | -0.6% | 3.9% | 0.7% | -26.7% | -8.2% | |
| EBITDA growth | 1.0% | 5.1% | -1.7% | -34.5% | -14.2% | |
| Gross Margin | 53.5% | 54.2% | 53.6% | 56.6% | 59.2% | 2.6% |
| EBITDA Margin | 29.3% | 29.6% | 28.9% | 25.9% | 24.2% | -1.7% |
| Net Income Margin | 7.2% | 9.9% | 6.8% | -6.8% | 1.6% | 8.4% |
| SG&A, % of revenue | 23.3% | 23.9% | 23.9% | 29.5% | 34.1% | 4.7% |
| CAPEX, % of revenue | 18.3% | 17.1% | 17.5% | 22.8% | 24.6% | 1.7% |
| ROIC | 7.7% | 10.8% | 8.2% | 0.1% | 0.5% | 0.4% |
| ROE | 7.1% | 9.7% | 6.5% | -4.9% | 1.0% | 6.0% |
| Net Debt/EBITDA | 0.6x | 0.5x | 0.7x | 1.5x | 2.2x | 0.7x |
Suncor Energy Inc ($SU) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 5,644 | 5,914 | 7,409 | 7,840 | -20.8% | -26.9% | -1.0% | 20.6% |
| EBITDA | 897 | 964 | 2,053 | 2,558 | -44.3% | -64.1% | 2.6% | 102.5% |
| Net Income | 246 | -735 | 392 | 531 | | -200.8% | | |
Balance Sheet
|
|---|
| Cash | 3,134 | 3,008 | 3,102 | 3,016 | -35.0% | -38.5% | -42.7% | -25.5% |
| Short Term Debt | 1,710 | 2,710 | 2,011 | 1,327 | 74.0% | 181.1% | 145.5% | 62.4% |
| Long Term Debt | 16,304 | 14,843 | 15,820 | 16,103 | 22.0% | 12.8% | 11.9% | 11.2% |
Ratios
|
|---|
| Gross Margin | 58.2% | 50.7% | 59.6% | 65.8% | 0.8% | -8.4% | 4.7% | 11.2% |
| EBITDA Margin | 15.9% | 16.3% | 27.7% | 32.6% | -6.7% | -16.9% | 1.0% | 13.2% |
| Net Income Margin | 4.4% | -12.4% | 5.3% | 6.8% | 9.1% | -21.4% | 10.3% | 37.7% |
Revenue and profitability
Suncor Energy Inc's Revenue decreased on 8.2%. Annual revenue decline showed slowdown in 16Q4 - revenue surged on 20.6%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 25.9% to 24.2% in 2016.
Gross Margin increased on 2.6 pp from 56.6% to 59.2% in 2016. SG&A as a % of Revenue increased on 4.7 pp from 29.5% to 34.1% in 2016.
Net Income marign increased on 8.4 pp from -6.8% to 1.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
Suncor Energy Inc's CAPEX/Revenue was 24.6% in 2016. CAPEX/Revenue increased on 7.4 pp from 17.1% in 2013 to 24.6% in 2016. For the last three years the average CAPEX/Revenue was 21.6%.Battling declining revenue the company made large investments to CAPEX (101% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (0.54%) and ROE (1.04%). ROIC showed almost no change in 2016. ROE increased on 6.0 pp from -4.9% to 1.0% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.7x. Net Debt / EBITDA jumped on 0.7x from 1.5x to 2.2x in 2016. Debt jumped on 13.9% while cash dropped on 25.5%.
Management team
Suncor Energy Inc's CEO is Steven W Williams "Steve". Steven W Williams "Steve" has 6 years tenure at the company. Alister Cowan is a The company's CFO. Alister Cowan has spent 4 years at the company.
Appendix 1: Peers in Energy
Below you can find Suncor Energy Inc benchmarking vs. other companies in Energy 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 |
|---|
| 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% |
|---|
| Suncor Energy Inc ($SU) | | 3.9% | 0.7% | -26.7% | -8.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Suncor Energy Inc ($SU) | 53.5% | 54.2% | 53.6% | 56.6% | 59.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 35.7% | 28.9% | 8.1% | 29.2% |
|---|
| Suncor Energy Inc ($SU) | 29.3% | 29.6% | 28.9% | 25.9% | 24.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 45.6% | 28.1% | 22.9% |
|---|
| Suncor Energy Inc ($SU) | 18.3% | 17.1% | 17.5% | 22.8% | 24.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% |
|---|
| Suncor Energy Inc ($SU) | 7.7% | 10.8% | 8.2% | 0.1% | 0.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 |
|---|
| Suncor Energy Inc ($SU) | 0.6x | 0.5x | 0.7x | 1.5x | 2.2x |
