Keyera Corp reports 19.7% CAPEX decline and almost no change in Revenue of 2,509
14.02.2017 • About Keyera Corp (
$KEY) • By InTwits
Keyera Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 22.1% in 2016, 22.4% in 2015, 14.0% in 2014, 11.1% in 2013, 11.1% in 2012
- Keyera Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.7%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 567 in 2016, 706 in 2015, 787 in 2014, 340 in 2013, 166 in 2012
- The company has business model with average profitability: ROIC is at 10.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Keyera Corp ($KEY) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,942 | 3,277 | 3,624 | 2,521 | 2,509 | -0.5% |
| Gross Profit | 361 | 420 | 671 | 573 | 646 | 12.8% |
| SG&A | 24 | 27 | 44 | 51 | 63 | 23.2% |
| EBITDA | 327 | 365 | 509 | 564 | 554 | -1.7% |
| Net Income | 131 | 147 | 230 | 202 | 217 | 7.4% |
Balance Sheet
|
|---|
| Cash | 1 | 187 | 11 | 13 | 16 | 22.5% |
| Short Term Debt | 64 | 0 | 47 | 104 | 60 | -42.4% |
| Long Term Debt | 755 | 1,077 | 1,242 | 1,526 | 1,672 | 9.6% |
Cash flow
|
|---|
| Capex | 166 | 340 | 787 | 706 | 567 | -19.7% |
Ratios
|
|---|
| Revenue growth | 14.5% | 11.4% | 10.6% | -30.4% | -0.5% | |
| EBITDA growth | 28.1% | 11.7% | 39.3% | 10.9% | -1.7% | |
| Gross Margin | 12.3% | 12.8% | 18.5% | 22.7% | 25.8% | 3.0% |
| EBITDA Margin | 11.1% | 11.1% | 14.0% | 22.4% | 22.1% | -0.3% |
| Net Income Margin | 4.4% | 4.5% | 6.3% | 8.0% | 8.6% | 0.6% |
| SG&A, % of revenue | 0.8% | 0.8% | 1.2% | 2.0% | 2.5% | 0.5% |
| CAPEX, % of revenue | 5.6% | 10.4% | 21.7% | 28.0% | 22.6% | -5.4% |
| ROIC | 13.8% | 12.7% | 14.3% | 12.6% | 10.5% | -2.1% |
| ROE | 16.8% | 16.2% | 20.5% | 14.9% | 13.4% | -1.5% |
| Net Debt/EBITDA | 2.5x | 2.4x | 2.5x | 2.9x | 3.1x | 0.2x |
Keyera Corp ($KEY) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 603 | 590 | 621 | 695 | -6.6% | -3.3% | -3.5% | |
| EBITDA | 149 | 135 | 140 | 130 | 36.5% | -11.9% | -29.0% | |
| Net Income | 70 | 60 | 52 | 35 | 24.0% | 282.9% | -52.1% | |
Balance Sheet
|
|---|
| Cash | 13 | 31 | 27 | 16 | 157.5% | 446.3% | 349.6% | |
| Short Term Debt | 100 | 0 | 0 | 60 | 103.7% | -100.0% | -100.0% | |
| Long Term Debt | 1,488 | 1,411 | 1,551 | 1,672 | 20.4% | 6.2% | 5.9% | |
Ratios
|
|---|
| Gross Margin | 29.2% | 26.1% | 25.9% | 22.4% | 5.3% | -1.9% | -9.6% | |
| EBITDA Margin | 24.8% | 23.0% | 22.5% | 18.6% | 7.8% | -2.2% | -8.1% | |
| Net Income Margin | 11.6% | 10.1% | 8.4% | 5.0% | 2.9% | 7.6% | -8.6% | |
Revenue and profitability
Keyera Corp's Revenue showed almost no change in 2016. EBITDA Margin showed almost no change in 2016.
Gross Margin increased on 3.0 pp from 22.7% to 25.8% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased slightly on 0.63 pp from 8.0% to 8.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
Keyera Corp's CAPEX/Revenue was 22.6% in 2016. CAPEX/Revenue surged on 12.2 pp from 10.4% in 2013 to 22.6% in 2016. Average CAPEX/Revenue for the last three years was 24.1%.Keyera Corp has spent a lot to CAPEX (102% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at good ROE (13.39%) while ROIC is low (10.46%). ROIC decreased on 2.1 pp from 12.6% to 10.5% in 2016. ROE decreased slightly on 1.5 pp from 14.9% to 13.4% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.1x and Debt / EBITDA is 3.1x. Net Debt / EBITDA jumped on 0.2x from 2.9x to 3.1x in 2016. Debt increased on 6.2% while cash surged on 22.5%.
Management team
Keyera Corp's CEO David G Smith is a founder and has spent 3 years at the company. Steven B Kroeker is a The company's CFO. Steven B Kroeker has spent 6 years at the company.
Appendix 1: Peers in Utilities
Below we provide Keyera Corp benchmarking against other companies in Utilities 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 |
|---|
| Emera Inc ($EMA) | | 8.3% | 31.8% | -5.1% | 53.3% |
| Northland Power Inc ($NPI) | | 54.1% | 36.4% | -4.2% | 50.9% |
| Boralex Inc ($BLX) | | -6.7% | 13.5% | 37.1% | 11.7% |
| Algonquin Power & Utilities Corp ($AQN) | | 93.6% | 39.4% | 9.2% | 6.6% |
| TransAlta Corp ($TA) | | 3.7% | 14.4% | -13.6% | 5.7% |
| |
|---|
| Median (14 companies) | | 10.8% | 13.1% | -5.1% | 1.1% |
|---|
| Keyera Corp ($KEY) | | 11.4% | 10.6% | -30.4% | -0.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atco Ltd/Canada ($ACO.X) | 85.6% | 85.1% | 82.3% | 85.0% | 88.8% |
| Canadian Utilities Ltd ($CU) | 81.0% | 80.8% | 77.7% | 81.0% | 86.6% |
| Northland Power Inc ($NPI) | 52.5% | 63.7% | 61.8% | 69.0% | 82.4% |
| GWR Global Water Resources Corp ($GWR) | | | | 77.8% | 79.2% |
| Fortis Inc/Canada ($FTS) | 34.6% | 34.4% | 59.3% | 61.7% | 65.8% |
| |
|---|
| Median (12 companies) | 43.5% | 46.8% | 56.7% | 61.4% | 62.6% |
|---|
| Keyera Corp ($KEY) | 12.3% | 12.8% | 18.5% | 22.7% | 25.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northland Power Inc ($NPI) | 54.2% | 52.4% | 51.2% | 57.5% | 68.8% |
| Canadian Utilities Ltd ($CU) | 45.9% | 45.7% | 47.4% | 45.8% | 53.5% |
| Atco Ltd/Canada ($ACO.X) | 39.8% | 41.0% | 41.4% | 38.7% | 47.7% |
| TransAlta Corp ($TA) | 27.3% | 34.0% | 39.5% | 33.2% | 47.6% |
| Algonquin Power & Utilities Corp ($AQN) | 26.1% | 29.5% | 26.7% | 32.5% | 39.3% |
| |
|---|
| Median (12 companies) | 31.1% | 34.0% | 34.3% | 35.4% | 37.2% |
|---|
| Keyera Corp ($KEY) | 11.1% | 11.1% | 14.0% | 22.4% | 22.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Northland Power Inc ($NPI) | 84.0% | 60.2% | 238.7% | 265.9% | 148.0% |
| Algonquin Power & Utilities Corp ($AQN) | 21.7% | 23.5% | 45.9% | 19.9% | 37.0% |
| Canadian Utilities Ltd ($CU) | 70.7% | 66.4% | 58.5% | 47.2% | 35.4% |
| Atco Ltd/Canada ($ACO.X) | 58.8% | 54.2% | 48.3% | 39.6% | 33.1% |
| Caribbean Utilities Co Ltd ($CUP.U) | 13.8% | 13.0% | 17.0% | 41.3% | 29.2% |
| |
|---|
| Median (12 companies) | 31.8% | 29.0% | 20.6% | 21.1% | 28.4% |
|---|
| Keyera Corp ($KEY) | 5.6% | 10.4% | 21.7% | 28.0% | 22.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atco Ltd/Canada ($ACO.X) | 10.8% | 10.5% | 9.6% | 5.6% | 8.1% |
| Canadian Utilities Ltd ($CU) | 10.0% | 9.4% | 9.2% | 5.9% | 8.0% |
| Northland Power Inc ($NPI) | 6.0% | 7.4% | 7.2% | 5.3% | 7.3% |
| Caribbean Utilities Co Ltd ($CUP.U) | 5.8% | 6.3% | 6.1% | 5.7% | 5.8% |
| TransAlta Corp ($TA) | 0.5% | 2.4% | 5.3% | 1.7% | 5.0% |
| |
|---|
| Median (14 companies) | 4.2% | 5.6% | 5.0% | 5.2% | 4.3% |
|---|
| Keyera Corp ($KEY) | 13.8% | 12.7% | 14.3% | 12.6% | 10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atlantic Power Corp ($ATP) | 12.6x | 13.0x | 22.4x | 251.1x | 24.3x |
| Emera Inc ($EMA) | 5.7x | 5.6x | 3.8x | 4.3x | 13.3x |
| Algonquin Power & Utilities Corp ($AQN) | 7.9x | 6.2x | 5.0x | 4.1x | 9.7x |
| Fortis Inc/Canada ($FTS) | 5.0x | 5.6x | 6.7x | 5.3x | 9.2x |
| GWR Global Water Resources Corp ($GWR) | | | | 6.3x | 8.1x |
| |
|---|
| Median (11 companies) | 5.3x | 5.5x | 4.6x | 5.2x | 7.8x |
|---|
| Keyera Corp ($KEY) | 2.5x | 2.4x | 2.5x | 2.9x | 3.1x |
