Calfrac Well Services Ltd CAPEX dropped on 65.1% in 2016 and Revenue dropped on 50.9%
23.02.2017 • About Calfrac Well Services Ltd (
$CFW) • By InTwits
Calfrac Well Services Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Calfrac Well Services Ltd is a company in decline: FY2016 revenue growth was -50.9%, 5 years revenue CAGR was -13.7%
- The company operates at negative EBITDA Margin: -8.3%
- EBITDA Margin is quite volatile: -8.3% in FY2016, -7.3% in FY2015, 13.8% in FY2014, 12.0% in FY2013, 16.1% in FY2012
- Calfrac Well Services Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.6%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 56.1 in FY2016, 161 in FY2015, 163 in FY2014, 183 in FY2013, 261 in FY2012
- The company has unprofitable business model: ROIC is at -14.0%
- It operates with high leverage: Net Debt/EBITDA is 6.3x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Calfrac Well Services Ltd ($CFW) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,595 | 1,564 | 2,497 | 1,495 | 735 | -50.9% |
| Gross Profit | 260 | 174 | 349 | -49 | -141 | |
| SG&A | 94 | 96 | 131 | 79 | 70 | -10.8% |
| EBITDA | 256 | 187 | 345 | -110 | -61 | |
| Net Income | 97 | 28 | 67 | -222 | -198 | |
Balance Sheet
|
|---|
| Cash | 42 | 42 | 99 | 124 | 110 | -11.4% |
| Short Term Debt | 1 | 25 | 17 | 17 | 3 | -83.0% |
| Long Term Debt | 441 | 652 | 739 | 928 | 984 | 6.1% |
Cash flow
|
|---|
| Capex | 261 | 183 | 163 | 161 | 56 | -65.1% |
Ratios
|
|---|
| Revenue growth | 3.8% | -2.0% | 59.7% | -40.1% | -50.9% | |
| EBITDA growth | -38.0% | -27.0% | 84.6% | -131.8% | -44.5% | |
| Gross Margin | 16.3% | 11.1% | 14.0% | -3.3% | -19.2% | -15.9% |
| EBITDA Margin | 16.1% | 12.0% | 13.8% | -7.3% | -8.3% | -0.9% |
| Net Income Margin | 6.1% | 1.8% | 2.7% | -14.8% | -27.0% | -12.1% |
| SG&A, % of revenue | 5.9% | 6.2% | 5.3% | 5.3% | 9.5% | 4.3% |
| CAPEX, % of revenue | 16.4% | 11.7% | 6.5% | 10.8% | 7.6% | -3.1% |
| ROIC | 12.9% | 5.2% | 12.2% | -15.7% | -14.0% | 1.7% |
| ROE | 13.1% | 3.5% | 8.2% | -30.3% | -34.9% | -4.6% |
| Net Debt/EBITDA | 1.6x | 3.4x | 1.9x | | | 0.0x |
Calfrac Well Services Ltd ($CFW) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 216 | 151 | 175 | 193 | -64.0% | -52.9% | -39.5% | -32.6% |
| EBITDA | -11 | -16 | -13 | -21 | -139.9% | | | |
| Net Income | -54 | -42 | -41 | -61 | | | | |
Balance Sheet
|
|---|
| Cash | 97 | 146 | 107 | 110 | 89.7% | 122.1% | 94.3% | -11.4% |
| Short Term Debt | 15 | 9 | 3 | 3 | -34.0% | -65.0% | -88.3% | -83.0% |
| Long Term Debt | 878 | 952 | 965 | 984 | 8.7% | 19.6% | 13.4% | 6.1% |
Ratios
|
|---|
| Gross Margin | -14.1% | -16.7% | -18.1% | -27.8% | -16.3% | -8.0% | -11.1% | -23.1% |
| EBITDA Margin | -5.3% | -10.7% | -7.4% | -10.6% | -10.0% | -8.6% | -5.2% | 33.2% |
| Net Income Margin | -25.0% | -27.7% | -23.4% | -31.9% | -22.9% | -14.1% | -15.0% | 17.6% |
Revenue and profitability
The company's Revenue dropped on 50.9%. Annual revenue decline showed slowdown in FY16Q4 - revenue dropped on 32.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from 13.5% to 18.2% in 2016.
Gross Margin dropped on 15.9 pp from -3.3% to -19.2% in FY2016. SG&A as a % of Revenue increased on 4.3 pp from 5.3% to 9.5% in FY2016.
Net Income marign dropped on 12.1 pp from -14.8% to -27.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Calfrac Well Services Ltd's CAPEX/Revenue was 7.6% in FY2016. The company's CAPEX/Revenue decreased on 4.1 pp from 11.7% in FY2013 to 7.6% in FY2016. It's average level of CAPEX/Revenue for the last three years was 8.3%.
Return on investment
The company operates at negative ROIC (-14.01%) and ROE (-34.93%). ROIC increased slightly on 1.7 pp from -15.7% to -14.0% in FY2016. ROE decreased on 4.6 pp from -30.3% to -34.9% in FY2016.
Leverage (Debt)
Debt level is 6.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt increased on 4.5% while cash dropped on 11.4%.
Management team
Jose Fernando Aguilar is a Calfrac Well Services Ltd's CEO. Jose Fernando Aguilar is a founder and has spent 4 years at the company.
Appendix 1: Peers in Energy
Below you can find Calfrac Well Services Ltd 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% | 16.9% | -27.7% | -18.0% |
|---|
| Calfrac Well Services Ltd ($CFW) | | -2.0% | 59.7% | -40.1% | -50.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Calfrac Well Services Ltd ($CFW) | 16.3% | 11.1% | 14.0% | -3.3% | -19.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.9% | 35.7% | 28.9% | 9.0% | 29.2% |
|---|
| Calfrac Well Services Ltd ($CFW) | 16.1% | 12.0% | 13.8% | -7.3% | -8.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Calfrac Well Services Ltd ($CFW) | 16.4% | 11.7% | 6.5% | 10.8% | 7.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.8% | 5.5% | -8.2% | -1.9% |
|---|
| Calfrac Well Services Ltd ($CFW) | 12.9% | 5.2% | 12.2% | -15.7% | -14.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 (79 companies) | 1.6x | 1.4x | 1.4x | 2.6x | 2.7x |
|---|
