Pembina Pipeline Corp EBITDA surged on 22.1% in 2016 while Revenue decreased on 8.9%
23.02.2017 • About Pembina Pipeline Corp (
$PPL) • By InTwits
Pembina Pipeline Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pembina Pipeline Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 27.5%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 1,745 in 2016, 1,811 in 2015, 1,412 in 2014, 880 in 2013, 584 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.5x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pembina Pipeline Corp ($PPL) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,427 | 5,006 | 6,079 | 4,672 | 4,255 | -8.9% |
| Gross Profit | 507 | 787 | 862 | 869 | 1,062 | 22.2% |
| SG&A | 97 | 132 | 156 | 157 | 195 | 24.2% |
| EBITDA | 595 | 831 | 914 | 951 | 1,161 | 22.1% |
| Net Income | 225 | 351 | 383 | 406 | 466 | 14.8% |
Balance Sheet
|
|---|
| Cash | 27 | 51 | 53 | 28 | 35 | 25.0% |
| Short Term Debt | 12 | 262 | 4 | 5 | 6 | 20.0% |
| Long Term Debt | 2,543 | 2,013 | 2,857 | 3,318 | 4,145 | 24.9% |
Cash flow
|
|---|
| Capex | 584 | 880 | 1,412 | 1,811 | 1,745 | -3.6% |
Ratios
|
|---|
| Revenue growth | 104.5% | 46.1% | 21.4% | -23.1% | -8.9% | |
| EBITDA growth | 64.9% | 39.7% | 10.0% | 4.0% | 22.1% | |
| Gross Margin | 14.8% | 15.7% | 14.2% | 18.6% | 25.0% | 6.4% |
| EBITDA Margin | 17.4% | 16.6% | 15.0% | 20.4% | 27.3% | 6.9% |
| Net Income Margin | 6.6% | 7.0% | 6.3% | 8.7% | 11.0% | 2.3% |
| SG&A, % of revenue | 2.8% | 2.6% | 2.6% | 3.4% | 4.6% | 1.2% |
| CAPEX, % of revenue | 17.0% | 17.6% | 23.2% | 38.8% | 41.0% | 2.2% |
| ROIC | 8.2% | 8.5% | 7.6% | 6.3% | 6.9% | 0.5% |
| ROE | 8.6% | 7.6% | 6.8% | 6.0% | 6.1% | 0.0% |
| Net Debt/EBITDA | 4.2x | 2.7x | 3.1x | 3.5x | 3.5x | 0.1x |
Pembina Pipeline Corp ($PPL) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,032 | 1,018 | 969 | 1,236 | -11.9% | -16.1% | -5.6% | -2.0% |
| EBITDA | 262 | 283 | 278 | 338 | 9.6% | 26.9% | 24.1% | 26.1% |
| Net Income | 102 | 113 | 120 | 131 | -15.0% | 162.8% | 6.2% | 0.8% |
Balance Sheet
|
|---|
| Cash | 246 | 20 | 40 | 35 | 485.7% | -90.2% | -9.1% | 25.0% |
| Short Term Debt | 6 | 6 | 6 | 6 | 50.0% | 20.0% | -96.0% | 20.0% |
| Long Term Debt | 3,292 | 3,614 | 3,818 | 4,145 | 0.6% | 2.3% | 9.1% | 24.9% |
Ratios
|
|---|
| Gross Margin | 24.5% | 25.6% | 25.3% | 24.5% | 4.9% | 9.2% | 6.2% | 5.2% |
| EBITDA Margin | 25.4% | 27.8% | 28.7% | 27.3% | 5.0% | 9.4% | 6.9% | 6.1% |
| Net Income Margin | 9.9% | 11.1% | 12.4% | 10.6% | -0.4% | 7.6% | 1.4% | 0.3% |
Revenue and profitability
Pembina Pipeline Corp's Revenue decreased on 8.9%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased slightly on 2.0%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.9 pp from 20.4% to 27.3% in 2016.
Gross Margin increased on 6.4 pp from 18.6% to 25.0% in 2016. SG&A as a % of Revenue increased slightly on 1.2 pp from 3.4% to 4.6% in 2016.
Net Income marign increased on 2.3 pp from 8.7% to 11.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 41.0%. CAPEX/Revenue surged on 23.4 pp from 17.6% in 2013 to 41.0% in 2016. It's average CAPEX/Revenue for the last three years was 34.3%.Pembina Pipeline Corp has spent a lot to CAPEX (150% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (6.88%) and ROE (6.06%). ROIC increased slightly on 0.55 pp from 6.3% to 6.9% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is 3.5x Net Debt / EBITDA and 3.6x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 3.5x to 3.5x in 2016. Debt jumped on 24.9% while cash surged on 25%.
Management team
The company's CEO is Michael H Dilger "Mick". Michael H Dilger "Mick" is a founder and has 4 years tenure at the company. The company's CFO J Scott Burrows has spent 3 years at the company.
Appendix 1: Peers in Energy
Below you can find Pembina Pipeline Corp 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) | | 15.4% | 16.9% | -29.5% | -19.1% |
|---|
| Pembina Pipeline Corp ($PPL) | | 46.1% | 21.4% | -23.1% | -8.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Pembina Pipeline Corp ($PPL) | 14.8% | 15.7% | 14.2% | 18.6% | 25.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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 ($PEY) | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% |
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.9% | 35.7% | 28.9% | 8.1% | 29.2% |
|---|
| Pembina Pipeline Corp ($PPL) | 17.4% | 16.6% | 15.0% | 20.4% | 27.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 27.6% | 22.9% |
|---|
| Pembina Pipeline Corp ($PPL) | 17.0% | 17.6% | 23.2% | 38.8% | 41.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.5% | -8.5% | -1.9% |
|---|
| Pembina Pipeline Corp ($PPL) | 8.2% | 8.5% | 7.6% | 6.3% | 6.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 |
|---|
| Pembina Pipeline Corp ($PPL) | 4.2x | 2.7x | 3.1x | 3.5x | 3.5x |
