Northland Power Inc reports 10,527% Net Income growth and 50.9% Revenue growth
23.02.2017 • About Northland Power Inc (
$NPI) • By InTwits
Northland Power Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Northland Power Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 159.4%. At the same time it's a lot of higher than industry average of 33.0%.
- CAPEX is quite volatile: 1,626 in 2016, 1,936 in 2015, 1,815 in 2014, 335 in 2013, 304 in 2012
- The company has business model with low profitability: ROIC is at 7.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 7.8x while industry average is 8.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Northland Power Inc ($NPI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 362 | 557 | 760 | 728 | 1,099 | 50.9% |
| Gross Profit | 190 | 355 | 469 | 502 | 906 | 80.3% |
| SG&A | 27 | 33 | 41 | 42 | 67 | 60.5% |
| EBITDA | 196 | 292 | 389 | 418 | 756 | 80.6% |
| Net Income | -10 | 151 | -107 | 1 | 121 | 10,526.8% |
Balance Sheet
|
|---|
| Cash | 32 | 138 | 193 | 152 | 308 | 102.4% |
| Short Term Debt | 41 | 59 | 241 | 79 | 115 | 45.8% |
| Long Term Debt | 1,252 | 1,778 | 2,629 | 4,736 | 6,097 | 28.8% |
Cash flow
|
|---|
| Capex | 304 | 335 | 1,815 | 1,936 | 1,626 | -16.0% |
Ratios
|
|---|
| Revenue growth | 1.5% | 54.1% | 36.4% | -4.2% | 50.9% | |
| EBITDA growth | 14.4% | 48.9% | 33.1% | 7.6% | 80.6% | |
| Gross Margin | 52.5% | 63.7% | 61.8% | 69.0% | 82.4% | 13.4% |
| EBITDA Margin | 54.2% | 52.4% | 51.2% | 57.5% | 68.8% | 11.3% |
| Net Income Margin | -2.7% | 27.1% | -14.0% | 0.2% | 11.1% | 10.9% |
| SG&A, % of revenue | 7.6% | 5.9% | 5.4% | 5.7% | 6.1% | 0.4% |
| CAPEX, % of revenue | 84.0% | 60.2% | 238.7% | 265.9% | 148.0% | -118.0% |
| ROIC | 6.0% | 7.4% | 7.2% | 5.3% | 7.3% | 2.0% |
| ROE | -4.4% | 26.0% | -20.3% | -1.9% | 15.7% | 17.5% |
| Net Debt/EBITDA | 6.4x | 5.8x | 6.9x | 11.1x | 7.8x | -3.3x |
Northland Power Inc ($NPI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 178 | 177 | 266 | 479 | -11.6% | 5.6% | 41.6% | 178.9% |
| EBITDA | 107 | 110 | 177 | 362 | -2.3% | 15.7% | 52.9% | 271.3% |
| Net Income | -52 | 37 | -29 | 165 | | -60.2% | | 3,101.2% |
Balance Sheet
|
|---|
| Cash | 178 | 166 | 230 | 308 | -26.8% | -42.7% | 16.7% | 102.4% |
| Short Term Debt | 79 | 79 | 82 | 115 | 13.2% | 10.3% | 8.0% | 45.8% |
| Long Term Debt | 5,063 | 5,498 | 5,881 | 6,097 | 65.2% | 48.4% | 32.9% | 28.8% |
Ratios
|
|---|
| Gross Margin | 72.6% | 78.1% | 81.1% | 88.4% | 8.0% | 9.9% | 9.1% | 16.7% |
| EBITDA Margin | 60.3% | 62.3% | 66.6% | 75.7% | 5.8% | 5.4% | 4.9% | 18.8% |
| Net Income Margin | -29.2% | 21.0% | -10.9% | 34.5% | -22.0% | -34.7% | 33.1% | 31.5% |
Revenue and profitability
Northland Power Inc's Revenue jumped on 50.9%. Revenue growth showed acceleration in 16Q4 - it increased 178.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 8.4% to 5.2% in 2016.
Gross Margin surged on 13.4 pp from 69.0% to 82.4% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 10.9 pp from 0.16% to 11.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Northland Power Inc had CAPEX/Revenue of 148%. The company's CAPEX/Revenue jumped on 87.8 pp from 60.2% in 2013 to 148% in 2016. It's average level of CAPEX/Revenue for the last three years was 218%.Northland Power Inc has spent a lot to CAPEX (215% of EBITDA) to secure its growth.
Return on investment
The company operates at good ROE (15.69%) while ROIC is low (7.32%). ROIC increased slightly on 2.0 pp from 5.3% to 7.3% in 2016. ROE surged on 17.5 pp from -1.9% to 15.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.8x and Debt / EBITDA is 8.2x. Net Debt / EBITDA dropped on 3.3x from 11.1x to 7.8x in 2016. Debt jumped on 29.0% while cash surged on 102%.
Management team
John W Brace is a the company's CEO. John W Brace is a founder and has spent 9 years at the company. The company's CFO is Paul J Bradley. Paul J Bradley has 7 years tenure at the company.
Appendix 1: Peers in Utilities
Below we provide Northland Power Inc 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% |
| 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 ($TA) | | 3.7% | 14.4% | -13.6% | 5.7% |
| Canadian Utilities Ltd ($CU) | | 11.3% | 6.5% | -9.3% | 4.1% |
| |
|---|
| Median (14 companies) | | 10.8% | 10.6% | -9.3% | 0.2% |
|---|
| Northland Power Inc ($NPI) | | 54.1% | 36.4% | -4.2% | 50.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atco Ltd/Canada ($ACO.X) | 85.6% | 85.1% | 82.3% | 85.0% | 88.8% |
| Canadian Utilities Ltd ($CU) | 81.0% | 80.8% | 77.7% | 81.0% | 86.6% |
| GWR Global Water Resources Corp ($GWR) | | | | 77.8% | 79.2% |
| Fortis Inc/Canada ($FTS) | 34.6% | 34.4% | 59.3% | 61.7% | 65.8% |
| Capital Power Corp ($CPX) | 58.9% | 59.8% | 58.4% | 61.4% | 65.4% |
| |
|---|
| Median (12 companies) | 34.2% | 36.1% | 45.5% | 56.6% | 58.8% |
|---|
| Northland Power Inc ($NPI) | 52.5% | 63.7% | 61.8% | 69.0% | 82.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian Utilities Ltd ($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 ($AQN) | 26.1% | 29.5% | 26.7% | 32.5% | 39.3% |
| GWR Global Water Resources Corp ($GWR) | | | | 46.1% | 38.8% |
| |
|---|
| Median (12 companies) | 28.3% | 34.0% | 33.6% | 33.4% | 35.4% |
|---|
| Northland Power Inc ($NPI) | 54.2% | 52.4% | 51.2% | 57.5% | 68.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Algonquin Power & Utilities Corp ($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 ($CUP.U) | 13.8% | 13.0% | 17.0% | 41.3% | 29.2% |
| GWR Global Water Resources Corp ($GWR) | | | | 10.5% | 28.8% |
| |
|---|
| Median (12 companies) | 31.4% | 24.5% | 20.6% | 21.1% | 26.9% |
|---|
| Northland Power Inc ($NPI) | 84.0% | 60.2% | 238.7% | 265.9% | 148.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Keyera Corp ($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% |
| 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% | 5.3% | 4.3% |
|---|
| Northland Power Inc ($NPI) | 6.0% | 7.4% | 7.2% | 5.3% | 7.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atlantic Power Corp ($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) | 5.0x | 5.2x | 4.1x | 5.0x | 4.4x |
|---|
| Northland Power Inc ($NPI) | 6.4x | 5.8x | 6.9x | 11.1x | 7.8x |
