Strad Energy Services Ltd CAPEX dropped on 52.0% in 2016 and Revenue dropped on 35.1%
01.03.2017 • About Strad Energy Services Ltd (
$SDY) • By InTwits
Strad Energy Services Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Strad Energy Services Ltd is a company in decline: 2016 revenue growth was -35.1%, 5 years revenue CAGR was -17.4%
- EBITDA Margin is quite volatile: 7.0% in 2016, -6.6% in 2015, 26.7% in 2014, 21.4% in 2013, 22.9% in 2012
- Strad Energy Services Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.4%. At the same time it's a lot of higher than industry average of 44.7%.
- CAPEX is quite volatile: 4.6 in 2016, 9.5 in 2015, 42.1 in 2014, 12.7 in 2013, 63.3 in 2012
- The company has unprofitable business model: ROIC is at -10.4%
- It operates with high leverage: Net Debt/EBITDA is 5.7x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Strad Energy Services Ltd ($SDY) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 203.2 | 189.6 | 219.8 | 111.5 | 72.4 | -35.1% |
| Gross Profit | 54.4 | 42.7 | 57.8 | 33.3 | 18.3 | -45.0% |
| SG&A | | 29.4 | 22.5 | 15.6 | 13.6 | -12.7% |
| EBITDA | 46.6 | 40.5 | 58.7 | -7.4 | 5.0 | |
| Net Income | 7.8 | 5.4 | 23.0 | -30.4 | -16.8 | |
Balance Sheet
|
|---|
| Cash | 0.0 | 0.0 | 0.0 | 0.0 | 0.4 | |
| Short Term Debt | 6.7 | 3.8 | 1.7 | 3.7 | 2.3 | -36.5% |
| Long Term Debt | 57.8 | 39.3 | 37.0 | 15.7 | 26.7 | 69.8% |
Cash flow
|
|---|
| Capex | 63.3 | 12.7 | 42.1 | 9.5 | 4.6 | -52.0% |
Ratios
|
|---|
| Revenue growth | 7.9% | -6.7% | 15.9% | -49.2% | -35.1% | |
| EBITDA growth | -16.7% | -13.0% | 44.8% | -112.6% | -168.1% | |
| Gross Margin | 26.8% | 22.5% | 26.3% | 29.9% | 25.3% | -4.6% |
| EBITDA Margin | 22.9% | 21.4% | 26.7% | -6.6% | 7.0% | 13.6% |
| Net Income Margin | 3.8% | 2.8% | 10.5% | -27.2% | -23.2% | 4.0% |
| SG&A, % of revenue | | 15.5% | 10.2% | 14.0% | 18.9% | 4.8% |
| CAPEX, % of revenue | 31.1% | 6.7% | 19.2% | 8.5% | 6.3% | -2.2% |
| ROIC | 9.5% | 6.1% | 17.6% | -20.7% | -10.4% | 10.3% |
| ROE | 6.0% | 4.2% | 16.2% | -21.0% | -12.6% | 8.4% |
| Net Debt/EBITDA | 1.4x | 1.1x | 0.7x | | 5.7x | 5.7x |
Strad Energy Services Ltd ($SDY) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 10 | 20 | 27 | -55.6% | -68.0% | -19.9% | 24.1% |
| EBITDA | 1 | -2 | 1 | 5 | -91.7% | -143.6% | | |
| Net Income | -3 | -7 | -4 | -3 | -1,567.6% | | | |
Balance Sheet
|
|---|
| Cash | 2 | 0 | 0 | 0 | | | | |
| Short Term Debt | 1 | 1 | 4 | 2 | -91.7% | -81.6% | -35.2% | -36.5% |
| Long Term Debt | 16 | 9 | 26 | 27 | -51.6% | -60.4% | 37.9% | 69.8% |
Ratios
|
|---|
| Gross Margin | 22.7% | 17.0% | 24.2% | 30.5% | -11.2% | -9.0% | -6.5% | 2.8% |
| EBITDA Margin | 3.9% | -17.9% | 6.3% | 17.9% | -16.8% | -31.1% | 66.1% | 33.1% |
| Net Income Margin | -19.6% | -72.6% | -18.5% | -11.4% | -20.2% | -66.3% | 62.0% | 26.5% |
Revenue and profitability
Strad Energy Services Ltd's Revenue dropped on 35.1%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 24.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 13.6 pp from -6.6% to 7.0% in 2016.
Gross Margin decreased on 4.6 pp from 29.9% to 25.3% in 2016. SG&A as a % of Revenue increased on 4.8 pp from 14.0% to 18.9% in 2016.
Net Income marign increased on 4.0 pp from -27.2% to -23.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Strad Energy Services Ltd had CAPEX/Revenue of 6.3%. The company's CAPEX/Revenue showed almost no change from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 11.3%.Strad Energy Services Ltd invested a big chunk of EBITDA (90.6%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-10.36%) and ROE (-12.62%). ROIC surged on 10.3 pp from -20.7% to -10.4% in 2016. ROE increased on 8.4 pp from -21.0% to -12.6% in 2016.
Leverage (Debt)
Debt level is 5.7x Net Debt / EBITDA and 5.8x Debt / EBITDA. Net Debt / EBITDA surged5.7x from to 5.7x in 2016. Debt surged on 49.7% while cash surged.
Management team
Andrew R C Pernal "Andy" is a the company's CEO. Andrew R C Pernal "Andy" is a founder and has spent 6 years at the company. Michael Donovan is a The company's CFO. Michael Donovan has spent 2 years at the company.
Appendix 1: Peers in Energy
Below you can find Strad Energy Services 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% |
|---|
| Strad Energy Services Ltd ($SDY) | | -6.7% | 15.9% | -49.2% | -35.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Strad Energy Services Ltd ($SDY) | 26.8% | 22.5% | 26.3% | 29.9% | 25.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% |
|---|
| Strad Energy Services Ltd ($SDY) | 22.9% | 21.4% | 26.7% | -6.6% | 7.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 39.2% | 45.6% | 28.1% | 23.8% |
|---|
| Strad Energy Services Ltd ($SDY) | 31.1% | 6.7% | 19.2% | 8.5% | 6.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | -8.2% | -1.9% |
|---|
| Strad Energy Services Ltd ($SDY) | 9.5% | 6.1% | 17.6% | -20.7% | -10.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 (79 companies) | 1.6x | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
