Gran Tierra Energy Inc reports 6.0% CAPEX decline while 4.8% Revenue growth
01.03.2017 • About Gran Tierra Energy Inc (
$GTE) • By InTwits
Gran Tierra Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gran Tierra Energy Inc doesn't have a profitable business model yet: 2016 ROIC is -58.1%
- The company operates at negative EBITDA Margin: -169.8%
- Gran Tierra Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 55.6%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 147 in 2016, 157 in 2015, 392 in 2014, 344 in 2013, 276 in 2012
- The company has unprofitable business model: ROIC is at -58.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gran Tierra Energy Inc ($GTE) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 583.1 | 647.0 | 559.4 | 276.0 | 289.3 | 4.8% |
| Gross Profit | 399.3 | 333.9 | 259.6 | -16.1 | 31.0 | |
| SG&A | 182.0 | 41.1 | 51.2 | 32.4 | 33.2 | 2.7% |
| EBITDA | 408.7 | 495.7 | 129.1 | -208.8 | -491.0 | |
| Net Income | 99.7 | 126.3 | -171.3 | -268.0 | -465.6 | |
Balance Sheet
|
|---|
| Cash | 212.6 | 428.8 | 331.8 | 145.3 | 25.2 | -82.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 197.1 | |
Cash flow
|
|---|
| Capex | 276.1 | 343.6 | 391.5 | 156.6 | 147.2 | -6.0% |
Ratios
|
|---|
| Revenue growth | -2.2% | 10.9% | -13.5% | -50.7% | 4.8% | |
| EBITDA growth | -11.7% | 21.3% | -74.0% | -261.8% | 135.2% | |
| Gross Margin | 68.5% | 51.6% | 46.4% | -5.8% | 10.7% | 16.6% |
| EBITDA Margin | 70.1% | 76.6% | 23.1% | -75.6% | -169.8% | -94.1% |
| Net Income Margin | 17.1% | 19.5% | -30.6% | -97.1% | -160.9% | -63.8% |
| SG&A, % of revenue | 31.2% | 6.4% | 9.2% | 11.7% | 11.5% | -0.2% |
| CAPEX, % of revenue | 47.3% | 53.1% | 70.0% | 56.8% | 50.9% | -5.9% |
| ROIC | 15.2% | 18.0% | -4.0% | -36.7% | -58.1% | -21.4% |
| ROE | 8.1% | 9.3% | -12.7% | -23.5% | -50.0% | -26.5% |
| Net Debt/EBITDA | -0.5x | -0.9x | -2.6x | | | 0.0x |
Gran Tierra Energy Inc ($GTE) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 57 | 72 | 69 | 92 | -24.7% | 3.4% | -9.4% | 67.2% |
| EBITDA | -32 | -53 | -295 | -112 | | -262.0% | | |
| Net Income | -45 | -64 | -230 | -127 | | | | |
Balance Sheet
|
|---|
| Cash | 51 | 171 | 48 | 25 | -74.8% | 3.0% | -74.3% | -82.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 109 | 173 | 197 | | | | |
Ratios
|
|---|
| Gross Margin | -19.0% | 22.1% | 10.5% | 26.9% | -13.3% | 57.1% | 226.0% | 35.5% |
| EBITDA Margin | -55.8% | -74.4% | -429.7% | -121.8% | -45.8% | -121.9% | -235.8% | -121.8% |
| Net Income Margin | -78.4% | -88.6% | -335.0% | -139.0% | -19.6% | -33.0% | -200.4% | 12.0% |
Revenue and profitability
Gran Tierra Energy Inc's Revenue increased on 4.8%. Revenue growth showed acceleration in 16Q4 - it increased 67.2% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.8 pp from 16.0% to 21.8% in 2016.
Gross Margin jumped on 16.6 pp from -5.8% to 10.7% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign dropped on 63.8 pp from -97.1% to -161% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 50.9%. CAPEX/Revenue decreased on 2.2 pp from 53.1% in 2013 to 50.9% in 2016. It's average level of CAPEX/Revenue for the last three years was 59.2%.
Return on investment
The company operates at negative ROIC (-58.06%) and ROE (-50.04%). ROIC dropped on 21.4 pp from -36.7% to -58.1% in 2016. ROE dropped on 26.5 pp from -23.5% to -50.0% in 2016.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2016. Debt surged while cash dropped on 82.7%.
Management team
Gary S Guidry is a Gran Tierra Energy Inc's CEO. Gary S Guidry is a founder and has spent 3 years at the company. Ryan Ellson is a Gran Tierra Energy Inc's CFO. Ryan Ellson has spent 3 years at the company.
Appendix 1: Peers in Energy
Below you can find Gran Tierra Energy Inc 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 ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 16.2% | 17.0% | -27.7% | -19.1% |
|---|
| Gran Tierra Energy Inc ($GTE) | | 10.9% | -13.5% | -50.7% | 4.8% |
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 ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
| |
|---|
| Median (114 companies) | 32.0% | 32.1% | 32.2% | 33.9% | 32.5% |
|---|
| Gran Tierra Energy Inc ($GTE) | 68.5% | 51.6% | 46.4% | -5.8% | 10.7% |
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 ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 9.0% | 29.2% |
|---|
| Gran Tierra Energy Inc ($GTE) | 70.1% | 76.6% | 23.1% | -75.6% | -169.8% |
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 ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.0% | 27.6% | 22.9% |
|---|
| Gran Tierra Energy Inc ($GTE) | 47.3% | 53.1% | 70.0% | 56.8% | 50.9% |
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 ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.7% | -8.2% | -1.9% |
|---|
| Gran Tierra Energy Inc ($GTE) | 15.2% | 18.0% | -4.0% | -36.7% | -58.1% |
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 (79 companies) | 1.6x | 1.5x | 1.4x | 2.6x | 2.7x |
|---|
