Caribbean Utilities Co Ltd CAPEX dropped on 39.4% in 2016 and Revenue dropped on 14.4%
16.02.2017 • About Caribbean Utilities Co Ltd (
$CUP.U) • By InTwits
Caribbean Utilities Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Caribbean Utilities Co Ltd is a company in decline: 2016 revenue growth was -14.4%, 5 years revenue CAGR was -5.8%
- Caribbean Utilities Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.8%. At the same time it's in pair with industry average of 6.3%.
- CAPEX is quite volatile: 47.2 in 2016, 77.9 in 2015, 39.5 in 2014, 29.3 in 2013, 30.8 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Caribbean Utilities Co Ltd ($CUP.U) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 223.5 | 226.2 | 231.7 | 188.9 | 161.7 | -14.4% |
| Gross Profit | 40.8 | 41.6 | 43.2 | 69.9 | 73.5 | 5.2% |
| SG&A | | | | 9.1 | 8.7 | -4.9% |
| EBITDA | 45.7 | 49.8 | 49.7 | 51.7 | 56.8 | 9.8% |
| Net Income | 17.7 | 20.4 | 20.8 | 22.8 | 25.2 | 10.4% |
Balance Sheet
|
|---|
| Cash | 0.7 | 1.2 | 21.8 | 1.4 | 9.9 | 622.4% |
| Short Term Debt | 56.7 | 18.3 | 14.0 | 15.7 | 41.0 | 160.4% |
| Long Term Debt | 169.0 | 202.0 | 236.4 | 222.6 | 211.7 | -4.9% |
Cash flow
|
|---|
| Capex | 30.8 | 29.3 | 39.5 | 77.9 | 47.2 | -39.4% |
Ratios
|
|---|
| Revenue growth | 2.5% | 1.2% | 2.4% | -18.5% | -14.4% | |
| EBITDA growth | -0.5% | 9.0% | -0.2% | 4.1% | 9.8% | |
| Gross Margin | 18.2% | 18.4% | 18.7% | 37.0% | 45.5% | 8.5% |
| EBITDA Margin | 20.4% | 22.0% | 21.4% | 27.4% | 35.1% | 7.7% |
| Net Income Margin | 7.9% | 9.0% | 9.0% | 12.1% | 15.6% | 3.5% |
| SG&A, % of revenue | | | | 4.8% | 5.4% | 0.5% |
| CAPEX, % of revenue | 13.8% | 13.0% | 17.0% | 41.3% | 29.2% | -12.1% |
| ROIC | 5.8% | 6.3% | 6.1% | 5.7% | 5.8% | 0.1% |
| ROE | 9.7% | 11.1% | 11.1% | 11.1% | 11.2% | 0.1% |
| Net Debt/EBITDA | 4.9x | 4.4x | 4.6x | 4.6x | 4.3x | -0.3x |
Caribbean Utilities Co Ltd ($CUP.U) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 40 | 38 | 43 | 41 | -18.4% | -13.9% | -14.7% | -10.2% |
| EBITDA | 12 | 14 | 16 | 15 | 10.3% | 8.5% | 5.8% | 15.5% |
| Net Income | 5 | 8 | 7 | 5 | 51.5% | 36.8% | -6.6% | -13.5% |
Balance Sheet
|
|---|
| Cash | 3 | 9 | 15 | 10 | -87.5% | -73.4% | -14.9% | 622.4% |
| Short Term Debt | 17 | 41 | 41 | 41 | 18.8% | 192.4% | 194.1% | 160.4% |
| Long Term Debt | 223 | 215 | 215 | 212 | -6.5% | -5.4% | -5.4% | -4.9% |
Ratios
|
|---|
| Gross Margin | 40.9% | 49.4% | 46.7% | 45.0% | 9.3% | 9.8% | 8.1% | 6.4% |
| EBITDA Margin | 30.4% | 37.4% | 37.0% | 35.6% | 7.9% | 7.7% | 7.1% | 7.9% |
| Net Income Margin | 12.5% | 19.9% | 17.2% | 12.9% | 5.8% | 7.4% | 1.5% | -0.5% |
Revenue and profitability
Caribbean Utilities Co Ltd's Revenue dropped on 14.4%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 10.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.7 pp from 27.4% to 35.1% in 2016.
Gross Margin increased on 8.5 pp from 37.0% to 45.5% in 2016. SG&A as a % of Revenue increased slightly on 0.54 pp from 4.8% to 5.4% in 2016.
Net Income marign increased on 3.5 pp from 12.1% to 15.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
Caribbean Utilities Co Ltd's CAPEX/Revenue was 29.2% in 2016. The company showed fast CAPEX/Revenue growth of 16.2 pp from 13.0% in 2013 to 29.2% in 2016. For the last three years the average CAPEX/Revenue was 29.2%.The company invested a big chunk of EBITDA (83.1%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.79%) and ROE (11.17%). ROIC showed almost no change in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and 4.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 4.6x to 4.3x in 2016. Debt increased on 6.0% while cash surged on 622%.
Appendix 1: Peers in Utilities
Below you can find Caribbean Utilities Co Ltd benchmarking vs. other companies in Utilities 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 |
|---|
| 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 ($TA) | | 3.7% | 14.4% | -13.6% | 5.7% |
| |
|---|
| Median (14 companies) | | 11.0% | 13.1% | -5.1% | 1.1% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | | 1.2% | 2.4% | -18.5% | -14.4% |
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 ($FTS) | 34.6% | 34.4% | 59.3% | 61.7% | 65.8% |
| |
|---|
| Median (12 companies) | 43.5% | 46.8% | 56.7% | 61.4% | 62.6% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 18.2% | 18.4% | 18.7% | 37.0% | 45.5% |
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 ($AQN) | 26.1% | 29.5% | 26.7% | 32.5% | 39.3% |
| |
|---|
| Median (12 companies) | 31.1% | 34.0% | 34.3% | 35.4% | 37.2% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 20.4% | 22.0% | 21.4% | 27.4% | 35.1% |
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% |
| GWR Global Water Resources Corp ($GWR) | | | | 10.5% | 28.8% |
| |
|---|
| Median (12 companies) | 31.8% | 29.0% | 21.7% | 21.1% | 26.9% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 13.8% | 13.0% | 17.0% | 41.3% | 29.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Keyera Corp ($KEY) | 13.8% | 12.7% | 14.3% | 12.6% | 10.5% |
| Atco Ltd/Canada ($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% |
| TransAlta Corp ($TA) | 0.5% | 2.4% | 5.3% | 1.7% | 5.0% |
| |
|---|
| Median (14 companies) | 4.2% | 5.6% | 5.0% | 5.2% | 4.3% |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 5.8% | 6.3% | 6.1% | 5.7% | 5.8% |
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 ($GWR) | | | | 6.3x | 8.1x |
| |
|---|
| Median (11 companies) | 5.3x | 5.5x | 4.1x | 5.2x | 7.8x |
|---|
| Caribbean Utilities Co Ltd ($CUP.U) | 4.9x | 4.4x | 4.6x | 4.6x | 4.3x |
