Canadian Natural Resources Ltd EBITDA dropped on 36.0% in 2016 and Revenue dropped on 20.4%
02.03.2017 • About Canadian Natural Resources Ltd (
$CNQ) • By InTwits
Canadian Natural Resources Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canadian Natural Resources Ltd is a company in decline: 2016 revenue growth was -20.4%, 5 years revenue CAGR was -5.1%
- Canadian Natural Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 43.3%. At the same time it's in pair with industry average of 45.3%.
- CAPEX is quite volatile: 3,797 in 2016, 4,468 in 2015, 11,398 in 2014, 7,211 in 2013, 6,104 in 2012
- The company has unprofitable business model: ROIC is at -2.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.7x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canadian Natural Resources Ltd ($CNQ) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,524 | 16,101 | 19,113 | 13,206 | 10,515 | -20.4% |
| Gross Profit | 7,523 | 8,604 | 10,616 | 6,101 | 4,413 | -27.7% |
| SG&A | 270 | 335 | 367 | 390 | 345 | -11.5% |
| EBITDA | 7,316 | 8,252 | 10,127 | 5,584 | 3,571 | -36.0% |
| Net Income | 1,892 | 2,270 | 3,929 | -637 | -204 | |
Balance Sheet
|
|---|
| Cash | 37 | 16 | 25 | 69 | 17 | -75.4% |
| Short Term Debt | 798 | 1,444 | 980 | 1,729 | 1,812 | 4.8% |
| Long Term Debt | 7,938 | 8,217 | 13,022 | 15,065 | 14,993 | -0.5% |
Cash flow
|
|---|
| Capex | 6,104 | 7,211 | 11,398 | 4,468 | 3,797 | -15.0% |
Ratios
|
|---|
| Revenue growth | 6.2% | 10.9% | 18.7% | -30.9% | -20.4% | |
| EBITDA growth | -5.5% | 12.8% | 22.7% | -44.9% | -36.0% | |
| Gross Margin | 51.8% | 53.4% | 55.5% | 46.2% | 42.0% | -4.2% |
| EBITDA Margin | 50.4% | 51.3% | 53.0% | 42.3% | 34.0% | -8.3% |
| Net Income Margin | 13.0% | 14.1% | 20.6% | -4.8% | -1.9% | 2.9% |
| SG&A, % of revenue | 1.9% | 2.1% | 1.9% | 3.0% | 3.3% | 0.3% |
| CAPEX, % of revenue | 42.0% | 44.8% | 59.6% | 33.8% | 36.1% | 2.3% |
| ROIC | 7.3% | 8.0% | 10.9% | 0.2% | -2.7% | -2.9% |
| ROE | 8.0% | 9.1% | 14.4% | -2.3% | -0.8% | 1.5% |
| Net Debt/EBITDA | 1.2x | 1.2x | 1.4x | 3.0x | 4.7x | 1.7x |
Canadian Natural Resources Ltd ($CNQ) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,182 | 2,503 | 2,358 | 3,472 | -33.7% | -28.3% | -30.2% | 13.9% |
| EBITDA | 411 | 773 | 728 | 1,659 | -65.5% | -52.0% | -55.1% | 42.8% |
| Net Income | -105 | -339 | -326 | 566 | | | | 332.1% |
Balance Sheet
|
|---|
| Cash | 15 | 24 | 19 | 17 | -55.9% | -25.0% | -36.7% | -75.4% |
| Short Term Debt | 973 | 2,405 | 2,098 | 1,812 | -41.6% | 93.0% | 25.4% | 4.8% |
| Long Term Debt | 15,591 | 14,831 | 15,194 | 14,993 | 11.2% | 0.6% | 2.4% | -0.5% |
Ratios
|
|---|
| Gross Margin | 29.8% | 40.8% | 39.0% | 52.5% | 28.4% | -7.2% | -10.5% | 8.1% |
| EBITDA Margin | 18.8% | 30.9% | 30.9% | 47.8% | -17.4% | -15.2% | -17.1% | 9.7% |
| Net Income Margin | -4.8% | -13.5% | -13.8% | 16.3% | 2.8% | -1.9% | -10.5% | 12.0% |
Revenue and profitability
Canadian Natural Resources Ltd's Revenue dropped on 20.4%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 13.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 8.3 pp from 42.3% to 34.0% in 2016.
Gross Margin decreased on 4.2 pp from 46.2% to 42.0% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 2.9 pp from -4.8% to -1.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Canadian Natural Resources Ltd had CAPEX/Revenue of 36.1%. CAPEX/Revenue decreased on 8.7 pp from 44.8% in 2013 to 36.1% in 2016. For the last three years the average CAPEX/Revenue was 43.2%.Battling declining revenue Canadian Natural Resources Ltd made large investments to CAPEX (106% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-2.66%) and ROE (-0.76%). ROIC decreased on 2.9 pp from 0.19% to -2.7% in 2016. ROE increased slightly on 1.5 pp from -2.3% to -0.76% in 2016.
Leverage (Debt)
Debt level is 4.7x Net Debt / EBITDA and 4.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.7x from 3.0x to 4.7x in 2016. Debt showed almost no change in 2016 while cash dropped on 75.4%.
Appendix 1: Peers in Energy
Below we provide Canadian Natural Resources Ltd benchmarking against other companies in Energy industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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% | 16.9% | -27.7% | -18.0% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | | 10.9% | 18.7% | -30.9% | -20.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 51.8% | 53.4% | 55.5% | 46.2% | 42.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 8.1% | 27.3% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 50.4% | 51.3% | 53.0% | 42.3% | 34.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 27.6% | 22.9% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 42.0% | 44.8% | 59.6% | 33.8% | 36.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 7.3% | 8.0% | 10.9% | 0.2% | -2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 (78 companies) | 1.6x | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
| Canadian Natural Resources Ltd ($CNQ) | 1.2x | 1.2x | 1.4x | 3.0x | 4.7x |
