Trinidad Drilling Ltd reports 68.3% CAPEX decline and 34.4% Revenue decline
01.03.2017 • About Trinidad Drilling Ltd (
$TDG) • By InTwits
Trinidad Drilling Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trinidad Drilling Ltd is a company in decline: 2016 revenue growth was -34.4%, 5 years revenue CAGR was -15.0%
- EBITDA Margin is quite volatile: 31.5% in 2016, -28.4% in 2015, 19.1% in 2014, 30.4% in 2013, 23.8% in 2012
- Trinidad Drilling Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.9%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 44.3 in 2016, 140 in 2015, 277 in 2014, 90.3 in 2013, 186 in 2012
- The company has unprofitable business model: ROIC is at -3.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 5.1x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trinidad Drilling Ltd ($TDG) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 859.3 | 845.9 | 941.3 | 551.9 | 362.1 | -34.4% |
| Gross Profit | 329.2 | 329.8 | 315.2 | 222.2 | 159.6 | -28.2% |
| SG&A | 57.5 | 71.0 | 65.6 | 62.9 | 56.8 | -9.7% |
| EBITDA | 204.6 | 257.3 | 180.2 | -156.7 | 114.1 | |
| Net Income | 55.0 | 71.0 | 6.6 | -218.4 | -52.5 | |
Balance Sheet
|
|---|
| Cash | 4.9 | 268.2 | 71.1 | 63.7 | 25.8 | -59.5% |
| Short Term Debt | 0.6 | 0.0 | 0.0 | 2.6 | 2.0 | -24.9% |
| Long Term Debt | 509.2 | 468.7 | 527.8 | 704.3 | 601.1 | -14.7% |
Cash flow
|
|---|
| Capex | 185.7 | 90.3 | 276.6 | 140.0 | 44.3 | -68.3% |
Ratios
|
|---|
| Revenue growth | 5.0% | -1.6% | 11.3% | -41.4% | -34.4% | |
| EBITDA growth | -16.3% | 25.8% | -30.0% | -186.9% | -172.8% | |
| Gross Margin | 38.3% | 39.0% | 33.5% | 40.3% | 44.1% | 3.8% |
| EBITDA Margin | 23.8% | 30.4% | 19.1% | -28.4% | 31.5% | 59.9% |
| Net Income Margin | 6.4% | 8.4% | 0.7% | -39.6% | -14.5% | 25.1% |
| SG&A, % of revenue | 6.7% | 8.4% | 7.0% | 11.4% | 15.7% | 4.3% |
| CAPEX, % of revenue | 21.6% | 10.7% | 29.4% | 25.4% | 12.2% | -13.1% |
| ROIC | 6.1% | 9.0% | 3.2% | -14.5% | -3.0% | 11.6% |
| ROE | 6.5% | 7.2% | 0.6% | -17.8% | -4.1% | 13.7% |
| Net Debt/EBITDA | 2.5x | 0.8x | 2.5x | | 5.1x | 5.1x |
Trinidad Drilling Ltd ($TDG) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 108 | 94 | 67 | 93 | -44.6% | -0.8% | -46.1% | -32.6% |
| EBITDA | 34 | 45 | 21 | 14 | -39.3% | 67.5% | | |
| Net Income | 11 | -16 | -36 | -12 | -6.8% | | | |
Balance Sheet
|
|---|
| Cash | 48 | 44 | 29 | 26 | -30.1% | -61.7% | 18.7% | -59.5% |
| Short Term Debt | 2 | 2 | 2 | 2 | | | -21.6% | -24.9% |
| Long Term Debt | 616 | 574 | 583 | 601 | -1.5% | -8.0% | -13.9% | -14.7% |
Ratios
|
|---|
| Gross Margin | 43.4% | 65.3% | 34.3% | 30.3% | 6.2% | 21.3% | -7.5% | -10.2% |
| EBITDA Margin | 31.8% | 48.0% | 30.6% | 15.0% | 2.8% | 19.6% | 110.0% | 117.5% |
| Net Income Margin | 10.5% | -17.2% | -53.4% | -12.7% | 4.3% | -15.7% | 17.0% | 89.8% |
Revenue and profitability
Trinidad Drilling Ltd's Revenue dropped on 34.4%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 32.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 59.9 pp from -28.4% to 31.5% in 2016.
Gross Margin increased on 3.8 pp from 40.3% to 44.1% in 2016. SG&A as a % of Revenue increased on 4.3 pp from 11.4% to 15.7% in 2016.
Net Income marign surged on 25.1 pp from -39.6% to -14.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Trinidad Drilling Ltd had CAPEX/Revenue of 12.2%. Trinidad Drilling Ltd showed small growth in CAPEX/Revenue of 1.6 pp from 10.7% in 2013 to 12.2% in 2016. For the last three years the average CAPEX/Revenue was 22.3%.
Return on investment
The company operates at negative ROIC (-2.99%) and ROE (-4.10%). ROIC surged on 11.6 pp from -14.5% to -3.0% in 2016. ROE jumped on 13.7 pp from -17.8% to -4.1% in 2016.
Leverage (Debt)
Debt level is 5.1x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA surged5.1x from to 5.1x in 2016. Debt dropped on 14.7% while cash dropped on 59.5%.
Appendix 1: Peers in Energy
Below you can find Trinidad Drilling 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% |
|---|
| Trinidad Drilling Ltd ($TDG) | | -1.6% | 11.3% | -41.4% | -34.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Trinidad Drilling Ltd ($TDG) | 38.3% | 39.0% | 33.5% | 40.3% | 44.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.9% | 35.7% | 28.9% | 9.0% | 27.3% |
|---|
| Trinidad Drilling Ltd ($TDG) | 23.8% | 30.4% | 19.1% | -28.4% | 31.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Trinidad Drilling Ltd ($TDG) | 21.6% | 10.7% | 29.4% | 25.4% | 12.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.7% | -8.2% | -1.9% |
|---|
| Trinidad Drilling Ltd ($TDG) | 6.1% | 9.0% | 3.2% | -14.5% | -3.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
