Peyto Exploration & Development Corp CAPEX dropped on 21.0% in 2016 and Revenue decreased on 5.9%
01.03.2017 • About Peyto Exploration & Development Corp (
$PEY) • By InTwits
Peyto Exploration & Development Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Peyto Exploration & Development Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 93.4%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 166 in 2016, 383 in 2015, 685 in 2014, 460 in 2013, 417 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Peyto Exploration & Development Corp ($PEY) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 380.6 | 535.4 | 782.5 | 690.8 | 650.1 | -5.9% |
| Gross Profit | 165.8 | 249.0 | 411.3 | 282.2 | 231.5 | -17.9% |
| SG&A | 3.8 | 5.2 | 5.8 | 7.1 | 8.3 | 16.9% |
| EBITDA | 327.8 | 445.3 | 675.2 | 584.6 | 524.3 | -10.3% |
| Net Income | 94.0 | 142.6 | 261.8 | 137.6 | 112.3 | -18.3% |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 0.0 | 2.1 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 580.0 | 875.0 | 925.0 | 1,045.0 | 1,070.0 | 2.4% |
Cash flow
|
|---|
| Capex | 429.7 | 578.0 | 690.4 | 593.8 | 469.4 | -21.0% |
Ratios
|
|---|
| Revenue growth | -0.7% | 40.7% | 46.1% | -11.7% | -5.9% | |
| EBITDA growth | 2.2% | 35.8% | 51.6% | -13.4% | -10.3% | |
| Gross Margin | 43.6% | 46.5% | 52.6% | 40.8% | 35.6% | -5.2% |
| EBITDA Margin | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% | -4.0% |
| Net Income Margin | 24.7% | 26.6% | 33.5% | 19.9% | 17.3% | -2.6% |
| SG&A, % of revenue | 1.0% | 1.0% | 0.7% | 1.0% | 1.3% | 0.2% |
| CAPEX, % of revenue | 112.9% | 108.0% | 88.2% | 86.0% | 72.2% | -13.7% |
| ROIC | 8.6% | 10.4% | 15.1% | 8.8% | 6.4% | -2.4% |
| ROE | 8.4% | 11.8% | 19.0% | 8.7% | 7.1% | -1.6% |
| Net Debt/EBITDA | 1.8x | 2.0x | 1.4x | 1.8x | 2.0x | 0.2x |
Peyto Exploration & Development Corp ($PEY) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 172 | 136 | 162 | 180 | -2.0% | -18.2% | -1.2% | -2.7% |
| EBITDA | 157 | 99 | 123 | 145 | 5.3% | -30.3% | -10.0% | -7.3% |
| Net Income | 42 | 9 | 23 | 38 | -5.8% | -26.0% | -38.9% | -11.3% |
Balance Sheet
|
|---|
| Cash | 4 | 25 | 33 | 2 | | | | |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 1,140 | 1,045 | 1,045 | 1,070 | 12.3% | 14.8% | 8.9% | 2.4% |
Ratios
|
|---|
| Gross Margin | 35.5% | 28.3% | 35.7% | 41.2% | -7.0% | -11.0% | -5.4% | 0.7% |
| EBITDA Margin | 91.0% | 72.9% | 76.2% | 80.6% | 6.3% | -12.6% | -7.5% | -3.9% |
| Net Income Margin | 24.3% | 6.7% | 14.1% | 21.4% | -1.0% | -0.7% | -8.7% | -2.1% |
Revenue and profitability
Peyto Exploration & Development Corp's Revenue decreased on 5.9%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased on 2.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 38.1 pp from 69.7% to 108% in 2016.
Gross Margin decreased on 5.2 pp from 40.8% to 35.6% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased on 2.6 pp from 19.9% to 17.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 72.2% in 2016. CAPEX/Revenue dropped on 35.8 pp from 108% in 2013 to 72.2% in 2016. It's average CAPEX/Revenue for the last three years was 82.1%.Battling declining revenue the company invested a large share of EBITDA (89.5%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (6.38%) and ROE (7.10%). ROIC decreased on 2.4 pp from 8.8% to 6.4% in 2016. ROE decreased slightly on 1.6 pp from 8.7% to 7.1% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.0x and Debt / EBITDA is 2.0x. Net Debt / EBITDA surged on 0.2x from 1.8x to 2.0x in 2016. Debt increased on 2.4% while cash jumped.
Management team
The company's CEO is Darren Gee. Darren Gee is a founder and has 7 years tenure at the company. Kathy Turgeon is a The company's CFO. Kathy Turgeon has spent 10 years at the company.
Appendix 1: Peers in Energy
Below you can find Peyto Exploration & Development 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% |
|---|
| Peyto Exploration & Development Corp ($PEY) | | 40.7% | 46.1% | -11.7% | -5.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 43.6% | 46.5% | 52.6% | 40.8% | 35.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | |
| Innergex Renewable Energy Inc ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| PrairieSky Royalty Ltd ($PSK) | | | | 82.5% | 80.3% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 86.1% | 83.2% | 86.3% | 84.6% | 80.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 112.9% | 108.0% | 88.2% | 86.0% | 72.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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) | 3.6% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Peyto Exploration & Development Corp ($PEY) | 8.6% | 10.4% | 15.1% | 8.8% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 2.7x | 2.7x |
|---|
| Peyto Exploration & Development Corp ($PEY) | 1.8x | 2.0x | 1.4x | 1.8x | 2.0x |
