Pengrowth Energy Corp reports 64.4% CAPEX decline and 14.6% Revenue decline
28.02.2017 • About Pengrowth Energy Corp (
$PGF) • By InTwits
Pengrowth Energy Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pengrowth Energy Corp is a company in decline: 2016 revenue growth was -14.6%, 5 years revenue CAGR was -5.0%
- EBITDA Margin is quite volatile: 12.0% in 2016, -45.2% in 2015, 9.8% in 2014, 46.1% in 2013, 51.0% in 2012
- Pengrowth Energy Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 40.0%. At the same time it's in pair with industry average of 45.3%.
- CAPEX is quite volatile: 65.7 in 2016, 185 in 2015, 921 in 2014, 696 in 2013, 467 in 2012
- The company has unprofitable business model: ROIC is at -7.7%
- It operates with high leverage: Net Debt/EBITDA is 12.8x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pengrowth Energy Corp ($PGF) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,203 | 1,263 | 1,132 | 1,068 | 912 | -14.6% |
| Gross Profit | 743 | 751 | 686 | 651 | 603 | -7.4% |
| SG&A | 102 | 103 | 100 | 100 | 84 | -16.1% |
| EBITDA | 613 | 582 | 111 | -483 | 110 | |
| Net Income | 13 | -317 | -579 | -1,093 | -294 | |
Balance Sheet
|
|---|
| Cash | 3 | 449 | 0 | 0 | 287 | |
| Short Term Debt | 50 | 99 | 184 | 4 | 664 | 17,835.1% |
| Long Term Debt | 1,718 | 1,550 | 1,686 | 1,853 | 1,024 | -44.7% |
Cash flow
|
|---|
| Capex | 467 | 696 | 921 | 185 | 66 | -64.4% |
Ratios
|
|---|
| Revenue growth | 2.3% | 5.0% | -10.4% | -5.6% | -14.6% | |
| EBITDA growth | -4.3% | -5.1% | -80.9% | -535.1% | -122.7% | |
| Gross Margin | 61.8% | 59.5% | 60.6% | 60.9% | 66.1% | 5.2% |
| EBITDA Margin | 51.0% | 46.1% | 9.8% | -45.2% | 12.0% | 57.3% |
| Net Income Margin | 1.1% | -25.1% | -51.1% | -102.3% | -32.2% | 70.1% |
| SG&A, % of revenue | 8.5% | 8.1% | 8.9% | 9.3% | 9.2% | -0.2% |
| CAPEX, % of revenue | 38.9% | 55.1% | 81.3% | 17.3% | 7.2% | -10.1% |
| ROIC | 0.5% | -0.2% | -8.1% | -22.2% | -7.7% | 14.6% |
| ROE | 0.3% | -8.0% | -17.5% | -46.6% | -18.1% | 28.5% |
| Net Debt/EBITDA | 2.9x | 2.1x | 16.8x | | 12.8x | 12.8x |
Pengrowth Energy Corp ($PGF) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 233 | 207 | 240 | 232 | -10.6% | -26.9% | -13.5% | -6.2% |
| EBITDA | 126 | -111 | 64 | 31 | 88.2% | | | |
| Net Income | 25 | -173 | -53 | -92 | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 54 | 140 | 287 | | | | |
| Short Term Debt | 169 | 127 | 651 | 664 | -9.8% | 1.1% | 461.9% | 17,835.1% |
| Long Term Debt | 1,514 | 1,504 | 1,002 | 1,024 | -18.1% | -19.8% | -48.7% | -44.7% |
Ratios
|
|---|
| Gross Margin | 66.2% | 63.7% | 67.9% | 66.3% | 5.5% | 6.4% | 5.2% | 3.1% |
| EBITDA Margin | 53.8% | -53.6% | 26.7% | 13.3% | 28.3% | -53.5% | 101.9% | 150.9% |
| Net Income Margin | 10.7% | -84.0% | -22.0% | -39.8% | 72.3% | -36.4% | 96.8% | 149.4% |
Revenue and profitability
Pengrowth Energy Corp's Revenue dropped on 14.6%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased on 6.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 57.3 pp from -45.2% to 12.0% in 2016.
Gross Margin increased on 5.2 pp from 60.9% to 66.1% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 70.1 pp from -102% to -32.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Pengrowth Energy Corp had CAPEX/Revenue of 7.2%. The company showed big decline in CAPEX/Revenue of 47.9 pp from 55.1% in 2013 to 7.2% in 2016. It's average CAPEX/Revenue for the last three years was 35.3%.Battling declining revenue Pengrowth Energy Corp invested a large share of EBITDA (59.8%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-7.67%) and ROE (-18.07%). ROIC surged on 14.6 pp from -22.2% to -7.7% in 2016. ROE surged on 28.5 pp from -46.6% to -18.1% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.8x and Debt / EBITDA is 15.4x. Net Debt / EBITDA surged12.8x from to 12.8x in 2016. Debt decreased on 9.1% while cash surged.
Appendix 1: Peers in Energy
Below you can find Pengrowth Energy 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) | | 16.2% | 17.0% | -29.5% | -19.1% |
|---|
| Pengrowth Energy Corp ($PGF) | | 5.0% | -10.4% | -5.6% | -14.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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 (114 companies) | 32.0% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Pengrowth Energy Corp ($PGF) | 61.8% | 59.5% | 60.6% | 60.9% | 66.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 9.0% | 29.2% |
|---|
| Pengrowth Energy Corp ($PGF) | 51.0% | 46.1% | 9.8% | -45.2% | 12.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 39.0% | 45.0% | 28.1% | 23.8% |
|---|
| Pengrowth Energy Corp ($PGF) | 38.9% | 55.1% | 81.3% | 17.3% | 7.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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) | 3.9% | 5.8% | 5.7% | -8.2% | -1.9% |
|---|
| Pengrowth Energy Corp ($PGF) | 0.5% | -0.2% | -8.1% | -22.2% | -7.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 (79 companies) | 1.5x | 1.4x | 1.4x | 2.6x | 2.6x |
|---|
