Vermilion Energy Inc EBITDA surged on 124% in 2016 while Revenue decreased on 2.3%
27.02.2017 • About Vermilion Energy Inc (
$VET) • By InTwits
Vermilion Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Vermilion Energy Inc doesn't have a profitable business model yet: 2016 ROIC is -1.1%
- EBITDA Margin is quite volatile: 55.1% in 2016, 24.1% in 2015, 67.4% in 2014, 76.2% in 2013, 69.6% in 2012
- Vermilion Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 52.9%. At the same time it's in pair with industry average of 45.3%.
- CAPEX is quite volatile: 341 in 2016, 516 in 2015, 908 in 2014, 561 in 2013, 559 in 2012
- The company has unprofitable business model: ROIC is at -1.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Vermilion Energy Inc ($VET) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,031 | 1,206 | 1,312 | 915 | 894 | -2.3% |
| Gross Profit | 828 | 982 | 1,037 | 647 | 632 | -2.4% |
| SG&A | 44 | 50 | 62 | 54 | 53 | -1.4% |
| EBITDA | 717 | 919 | 884 | 220 | 493 | 123.8% |
| Net Income | 191 | 328 | 269 | -217 | -160 | |
Balance Sheet
|
|---|
| Cash | 102 | 390 | 120 | 42 | 63 | 50.6% |
| Short Term Debt | 0 | 0 | 0 | 225 | 0 | -100.0% |
| Long Term Debt | 642 | 990 | 1,238 | 1,187 | 1,382 | 16.5% |
Cash flow
|
|---|
| Capex | 559 | 561 | 908 | 516 | 341 | -33.9% |
Ratios
|
|---|
| Revenue growth | 5.5% | 17.0% | 8.8% | -30.2% | -2.3% | |
| EBITDA growth | 11.7% | 28.1% | -3.8% | -75.1% | 123.8% | |
| Gross Margin | 80.4% | 81.4% | 79.1% | 70.8% | 70.7% | -0.0% |
| EBITDA Margin | 69.6% | 76.2% | 67.4% | 24.1% | 55.1% | 31.1% |
| Net Income Margin | 18.5% | 27.2% | 20.5% | -23.7% | -17.9% | 5.8% |
| SG&A, % of revenue | 4.2% | 4.1% | 4.7% | 5.9% | 5.9% | 0.1% |
| CAPEX, % of revenue | 54.2% | 46.5% | 69.3% | 56.4% | 38.1% | -18.2% |
| ROIC | 21.2% | 23.4% | 14.2% | -6.8% | -1.1% | 5.7% |
| ROE | 13.9% | 20.9% | 14.4% | -11.2% | -9.3% | 1.9% |
| Net Debt/EBITDA | 0.8x | 0.7x | 1.3x | 6.2x | 2.7x | -3.5x |
Vermilion Energy Inc ($VET) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 192 | 222 | 233 | 247 | 6.9% | -11.7% | -2.3% | 3.2% |
| EBITDA | 71 | 125 | 134 | 162 | -24.5% | -12.8% | | |
| Net Income | -86 | -56 | -14 | -4 | -6,833.2% | -917.5% | | |
Balance Sheet
|
|---|
| Cash | 63 | 5 | 21 | 63 | -28.3% | -94.7% | -85.6% | 50.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | -100.0% | -100.0% | -100.0% | -100.0% |
| Long Term Debt | 1,453 | 1,372 | 1,334 | 1,382 | 21.6% | 11.9% | 3.0% | 16.5% |
Ratios
|
|---|
| Gross Margin | 65.6% | 72.1% | 72.3% | 72.0% | -4.7% | -0.3% | 1.2% | 3.7% |
| EBITDA Margin | 36.8% | 56.4% | 57.6% | 65.8% | -15.3% | -0.8% | 61.5% | 69.1% |
| Net Income Margin | -44.7% | -25.1% | -6.2% | -1.6% | -45.5% | -27.8% | 28.7% | 57.8% |
Revenue and profitability
Vermilion Energy Inc's Revenue decreased on 2.3%. Annual revenue decline showed slowdown in 16Q4 - revenue increased on 3.2%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 31.1 pp from 24.1% to 55.1% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 5.8 pp from -23.7% to -17.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
Vermilion Energy Inc's CAPEX/Revenue was 38.1% in 2016. Vermilion Energy Inc showed decline in CAPEX/Revenue of 8.3 pp from 46.5% in 2013 to 38.1% in 2016. Average CAPEX/Revenue for the last three years was 54.6%.Battling declining revenue the company invested a large share of EBITDA (69.2%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-1.07%) and ROE (-9.31%). ROIC increased on 5.7 pp from -6.8% to -1.1% in 2016. ROE increased slightly on 1.9 pp from -11.2% to -9.3% in 2016.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA dropped on 3.5x from 6.2x to 2.7x in 2016. Debt decreased on 2.1% while cash jumped on 50.6%.
Management team
The company's CEO is Anthony W Marino. Anthony W Marino is a founder and has 2 years tenure at the company. Vermilion Energy Inc's CFO Curtis W Hicks has spent 15 years at the company.
Appendix 1: Peers in Energy
Below we provide Vermilion 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) | | 15.4% | 17.0% | -27.7% | -19.1% |
|---|
| Vermilion Energy Inc ($VET) | | 17.0% | 8.8% | -30.2% | -2.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Vermilion Energy Inc ($VET) | 80.4% | 81.4% | 79.1% | 70.8% | 70.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Vermilion Energy Inc ($VET) | 69.6% | 76.2% | 67.4% | 24.1% | 55.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Vermilion Energy Inc ($VET) | 54.2% | 46.5% | 69.3% | 56.4% | 38.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% |
|---|
| Vermilion Energy Inc ($VET) | 21.2% | 23.4% | 14.2% | -6.8% | -1.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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) | 1.6x | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
| Vermilion Energy Inc ($VET) | 0.8x | 0.7x | 1.3x | 6.2x | 2.7x |
