Innergex Renewable Energy Inc reports 219% Net Income growth and almost no change in EBITDA Margin of 83.5%
23.02.2017 • About Innergex Renewable Energy Inc (
$INE) • By InTwits
Innergex Renewable Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Innergex Renewable Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 104.4%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 351 in 2016, 325 in 2015, 230 in 2014, 131 in 2013, 192 in 2012
- The company has potentially unprofitable business model: ROIC is at 4.9%
- It operates with high leverage: Net Debt/EBITDA is 10.8x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Innergex Renewable Energy Inc ($INE) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 176.7 | 198.3 | 241.8 | 246.9 | 292.8 | 18.6% |
| SG&A | 9.6 | 11.2 | 15.1 | 14.2 | 15.0 | 6.0% |
| EBITDA | 197.6 | 218.1 | 200.5 | 206.0 | 244.6 | 18.7% |
| Net Income | 1.4 | 48.2 | -54.9 | -30.3 | 36.0 | |
Balance Sheet
|
|---|
| Cash | 49.5 | 34.3 | 54.6 | 40.7 | 56.2 | 38.3% |
| Short Term Debt | 63.9 | 26.6 | 33.8 | 55.0 | 99.4 | 80.7% |
| Long Term Debt | 1,246.4 | 1,393.5 | 1,690.8 | 2,253.9 | 2,602.1 | 15.4% |
Cash flow
|
|---|
| Capex | 192.3 | 131.5 | 230.4 | 325.3 | 351.3 | 8.0% |
Ratios
|
|---|
| Revenue growth | 19.2% | 12.2% | 22.0% | 2.1% | 18.6% | |
| EBITDA growth | 21.8% | 10.4% | -8.1% | 2.7% | 18.7% | |
| EBITDA Margin | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% | 0.1% |
| Net Income Margin | 0.8% | 24.3% | -22.7% | -12.3% | 12.3% | 24.6% |
| SG&A, % of revenue | 5.4% | 5.6% | 6.2% | 5.7% | 5.1% | -0.6% |
| CAPEX, % of revenue | 108.8% | 66.3% | 95.3% | 131.8% | 120.0% | -11.8% |
| ROIC | 6.8% | 6.8% | 5.4% | 4.9% | 4.9% | 0.0% |
| ROE | -0.7% | 9.0% | -14.8% | -10.7% | 9.1% | 19.8% |
| Net Debt/EBITDA | 6.4x | 6.4x | 8.3x | 11.0x | 10.8x | -0.2x |
Innergex Renewable Energy Inc ($INE) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 62 | 88 | 69 | 73 | 8.2% | 25.1% | 10.5% | 30.2% |
| EBITDA | 53 | 74 | 58 | 59 | 10.0% | 25.4% | 8.1% | 32.5% |
| Net Income | 8 | 14 | 3 | 10 | | -36.9% | -41.1% | |
Balance Sheet
|
|---|
| Cash | 38 | 62 | 49 | 56 | -29.3% | 38.2% | 56.6% | 38.3% |
| Short Term Debt | 55 | 61 | 66 | 99 | 70.9% | 74.0% | 84.7% | 80.7% |
| Long Term Debt | 2,297 | 2,482 | 2,525 | 2,602 | 23.9% | 25.3% | 22.9% | 15.4% |
Ratios
|
|---|
| EBITDA Margin | 85.4% | 84.2% | 84.4% | 80.3% | 1.4% | 0.2% | -1.9% | 1.4% |
| Net Income Margin | 13.3% | 16.4% | 4.9% | 13.4% | 63.8% | -16.1% | -4.3% | 66.3% |
Revenue and profitability
The company's Revenue surged on 18.6%. Revenue growth showed acceleration in 16Q4 - it increased 30.2% YoY. EBITDA Margin showed almost no change in 2016.
SG&A as a % of Revenue decreased slightly on 0.61 pp from 5.7% to 5.1% in 2016.
Net Income marign surged on 24.6 pp from -12.3% to 12.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 120%. Innergex Renewable Energy Inc showed fast CAPEX/Revenue growth of 53.7 pp from 66.3% in 2013 to 120% in 2016. It's average CAPEX/Revenue for the last three years was 116%.To fuel this fast growth the company made large investments to CAPEX (144% of EBITDA).
Return on investment
The company operates at low ROIC (4.92%) and ROE (9.12%). ROIC showed almost no change in 2016. ROE jumped on 19.8 pp from -10.7% to 9.1% in 2016.
Leverage (Debt)
Debt level is 10.8x Net Debt / EBITDA and 11.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 11.0x to 10.8x in 2016. Debt surged on 17.0% while cash surged on 38.3%.
Management team
The company's CEO Michel Letellier is a founder and has spent 11 years at the company.
Appendix 1: Peers in Energy
Below we provide Innergex Renewable Energy Inc 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) | | 16.2% | 16.9% | -29.5% | -19.1% |
|---|
| Innergex Renewable Energy Inc ($INE) | | 12.2% | 22.0% | 2.1% | 18.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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 (115 companies) | 32.0% | 32.1% | 32.4% | 33.6% | 32.0% |
|---|
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% |
| PrairieSky Royalty Ltd ($PSK) | | | | 82.5% | 80.3% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
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 ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.0% | 27.6% | 22.9% |
|---|
| Innergex Renewable Energy Inc ($INE) | 108.8% | 66.3% | 95.3% | 131.8% | 120.0% |
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 ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.7% | -8.5% | -1.9% |
|---|
| Innergex Renewable Energy Inc ($INE) | 6.8% | 6.8% | 5.4% | 4.9% | 4.9% |
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 ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.5x | 1.4x | 1.4x | 2.6x | 2.6x |
|---|
| Innergex Renewable Energy Inc ($INE) | 6.4x | 6.4x | 8.3x | 11.0x | 10.8x |
