Trican Well Service Ltd reports 503% EBITDA decline and 50.0% Revenue decline
23.02.2017 • About Trican Well Service Ltd (
$TCW) • By InTwits
Trican Well Service Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trican Well Service Ltd is a company in decline: 2016 revenue growth was -50.0%, 5 years revenue CAGR was -32.4%
- EBITDA Margin is quite volatile: -20.8% in 2016, 2.6% in 2015, 10.3% in 2014, 8.5% in 2013, 10.8% in 2012
- Trican Well Service Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 1.4 in 2016, 17.1 in 2015, 90.0 in 2014, 108 in 2013, 445 in 2012
- The company has unprofitable business model: ROIC is at -13.5%
- It operates with high leverage: Net Debt/EBITDA is 10.3x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trican Well Service Ltd ($TCW) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,213 | 2,115 | 2,407 | 650 | 325 | -50.0% |
| Gross Profit | 196 | 72 | 151 | -27 | -84 | |
| SG&A | 108 | 115 | 110 | 32 | 57 | 77.3% |
| EBITDA | 240 | 179 | 247 | 17 | -68 | -503.1% |
| Net Income | 54 | -46 | -5 | -828 | -30 | |
Balance Sheet
|
|---|
| Cash | 114 | 64 | 82 | 49 | 20 | -58.8% |
| Short Term Debt | 9 | 80 | 30 | 107 | 10 | -90.2% |
| Long Term Debt | 695 | 594 | 759 | 469 | 212 | -54.9% |
Cash flow
|
|---|
| Capex | 445 | 108 | 90 | 17 | 1 | -91.6% |
Ratios
|
|---|
| Revenue growth | -4.2% | -4.4% | 13.8% | -73.0% | -50.0% | |
| EBITDA growth | -61.1% | -25.1% | 37.6% | -93.2% | -503.1% | |
| Gross Margin | 8.8% | 3.4% | 6.3% | -4.1% | -25.7% | -21.6% |
| EBITDA Margin | 10.8% | 8.5% | 10.3% | 2.6% | -20.8% | -23.4% |
| Net Income Margin | 2.4% | -2.2% | -0.2% | -127.4% | -9.1% | 118.3% |
| SG&A, % of revenue | 4.9% | 5.4% | 4.6% | 4.9% | 17.4% | 12.5% |
| CAPEX, % of revenue | 20.1% | 5.1% | 3.7% | 2.6% | 0.4% | -2.2% |
| ROIC | 3.9% | -1.9% | 1.9% | -3.6% | -13.5% | -9.9% |
| ROE | 3.9% | -3.4% | -0.4% | -90.0% | -5.3% | 84.8% |
| Net Debt/EBITDA | 2.5x | 3.4x | 2.9x | 31.4x | | -31.4x |
Trican Well Service Ltd ($TCW) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 112 | 33 | 78 | 115 | -52.7% | -59.5% | -59.5% | -27.2% |
| EBITDA | -27 | -29 | -7 | -6 | | | -121.8% | -146.7% |
| Net Income | 21 | -65 | -38 | 53 | | | | |
Balance Sheet
|
|---|
| Cash | 58 | 22 | 21 | 20 | -5.6% | -41.0% | -72.9% | -58.8% |
| Short Term Debt | 66 | 70 | 1 | 10 | 111.0% | -51.1% | -99.7% | -90.2% |
| Long Term Debt | 262 | 176 | 211 | 212 | -63.0% | -68.0% | -54.0% | -54.9% |
Ratios
|
|---|
| Gross Margin | -28.6% | -87.7% | -17.5% | -8.8% | -23.7% | -52.8% | -26.9% | -4.2% |
| EBITDA Margin | -23.9% | -88.9% | -8.5% | -5.2% | -20.9% | -60.8% | -24.4% | -13.2% |
| Net Income Margin | 18.7% | -200.1% | -48.9% | 46.0% | 33.8% | 152.4% | 56.6% | 240.1% |
Revenue and profitability
The company's Revenue dropped on 50.0%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 27.2%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 23.4 pp from 2.6% to -20.8% in 2016.
Gross Margin dropped on 21.6 pp from -4.1% to -25.7% in 2016. SG&A as a % of Revenue jumped on 12.5 pp from 4.9% to 17.4% in 2016.
Net Income marign jumped on 118 pp from -127% to -9.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Trican Well Service Ltd had CAPEX/Revenue of 0.45%. The company showed decline in CAPEX/Revenue of 4.6 pp from 5.1% in 2013 to 0.45% in 2016. For the last three years the average CAPEX/Revenue was 2.3%.
Return on investment
The company operates at negative ROIC (-13.53%) and ROE (-5.26%). ROIC decreased on 9.9 pp from -3.6% to -13.5% in 2016. ROE jumped on 84.8 pp from -90.0% to -5.3% in 2016.
Leverage (Debt)
Debt level is 10.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 31.4x from 31.4x to in 2016. Debt dropped on 61.4% while cash dropped on 58.8%.
Management team
The company's CEO is Dale M Dusterhoft. Dale M Dusterhoft is a founder and has 9 years tenure at the company. Michael A Baldwin is a The company's CFO. Michael A Baldwin has spent 10 years at the company.
Appendix 1: Peers in Energy
Below you can find Trican Well Service 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% | 17.0% | -27.7% | -18.0% |
|---|
| Trican Well Service Ltd ($TCW) | | -4.4% | 13.8% | -73.0% | -50.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Trican Well Service Ltd ($TCW) | 8.8% | 3.4% | 6.3% | -4.1% | -25.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% |
|---|
| Trican Well Service Ltd ($TCW) | 10.8% | 8.5% | 10.3% | 2.6% | -20.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Trican Well Service Ltd ($TCW) | 20.1% | 5.1% | 3.7% | 2.6% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.7% | -8.5% | -1.9% |
|---|
| Trican Well Service Ltd ($TCW) | 3.9% | -1.9% | 1.9% | -3.6% | -13.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 |
| Trilogy Energy Corp ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| TransCanada Corp ($TRP) | 5.5x | 5.7x | 5.7x | 22.1x | 9.6x |
| |
|---|
| Median (78 companies) | 1.5x | 1.4x | 1.4x | 2.6x | 2.7x |
|---|
| Trican Well Service Ltd ($TCW) | 2.5x | 3.4x | 2.9x | 31.4x | |
