TORC Oil & Gas Ltd EBITDA Margin jumped on 67.7 pp from -16.8% to 50.9% in 2016 and Revenue decreased slightly on 0.95%
02.03.2017 • About TORC Oil & Gas Ltd (
$TOG) • By InTwits
TORC Oil & Gas Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- TORC Oil & Gas Ltd doesn't have a profitable business model yet: 2016 ROIC is -3.4%
- EBITDA Margin is quite volatile: 50.9% in 2016, -16.8% in 2015, 41.8% in 2014, 38.8% in 2013, -6.9% in 2012
- TORC Oil & Gas Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 266.2%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 182 in 2016, 552 in 2015, 280 in 2014, 652 in 2013, 135 in 2012
- The company has unprofitable business model: ROIC is at -3.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
TORC Oil & Gas Ltd ($TOG) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 29.7 | 139.6 | 267.6 | 240.7 | 238.5 | -0.9% |
| Gross Profit | 20.5 | 105.0 | 204.7 | 152.6 | 144.0 | -5.6% |
| SG&A | 3.6 | 7.1 | 9.7 | 11.2 | 9.2 | -18.2% |
| EBITDA | -2.0 | 54.2 | 111.8 | -40.6 | 121.4 | |
| Net Income | -18.8 | -10.1 | 6.3 | -172.7 | -50.4 | |
Balance Sheet
|
|---|
| Cash | 79.7 | 13.6 | 0.0 | 0.0 | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 85.0 | 179.8 | 230.1 | 218.7 | -4.9% |
Cash flow
|
|---|
| Capex | 134.7 | 651.6 | 279.6 | 552.2 | 182.0 | -67.0% |
Ratios
|
|---|
| Revenue growth | 864.7% | 370.3% | 91.8% | -10.1% | -0.9% | |
| EBITDA growth | 20.9% | -2,756.8% | 106.3% | -136.3% | -399.2% | |
| Gross Margin | 69.0% | 75.2% | 76.5% | 63.4% | 60.4% | -3.0% |
| EBITDA Margin | -6.9% | 38.8% | 41.8% | -16.8% | 50.9% | 67.7% |
| Net Income Margin | -63.2% | -7.2% | 2.3% | -71.7% | -21.2% | 50.6% |
| SG&A, % of revenue | 12.2% | 5.1% | 3.6% | 4.7% | 3.8% | -0.8% |
| CAPEX, % of revenue | 453.8% | 466.9% | 104.5% | 229.4% | 76.3% | -153.1% |
| ROIC | -4.7% | -0.7% | -0.2% | -14.4% | -3.4% | 10.9% |
| ROE | -4.3% | -1.4% | 0.7% | -15.4% | -3.8% | 11.6% |
| Net Debt/EBITDA | | 1.3x | 1.6x | | 1.8x | 1.8x |
TORC Oil & Gas Ltd ($TOG) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 43 | 57 | 62 | 77 | -11.6% | -8.9% | -5.9% | 19.9% |
| EBITDA | 12 | 27 | 31 | 51 | -52.9% | -27.9% | | |
| Net Income | -25 | -16 | -12 | 3 | | | | |
Balance Sheet
|
|---|
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 251 | 247 | 225 | 219 | 16.5% | 8.4% | 0.3% | -4.9% |
Ratios
|
|---|
| Gross Margin | 43.5% | 57.3% | 59.8% | 72.6% | -20.5% | -10.9% | -1.4% | 12.2% |
| EBITDA Margin | 26.8% | 48.2% | 50.4% | 66.8% | -23.5% | -12.7% | 87.1% | 189.9% |
| Net Income Margin | -58.8% | -27.7% | -19.4% | 3.3% | -27.4% | -3.8% | 61.3% | 143.0% |
Revenue and profitability
The company's Revenue decreased slightly on 0.95%. Annual revenue decline showed slowdown in 16Q4 - revenue surged on 19.9%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 67.7 pp from -16.8% to 50.9% in 2016.
Gross Margin decreased on 3.0 pp from 63.4% to 60.4% in 2016. SG&A as a % of Revenue decreased slightly on 0.81 pp from 4.7% to 3.8% in 2016.
Net Income marign jumped on 50.6 pp from -71.7% to -21.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 TORC Oil & Gas Ltd had CAPEX/Revenue of 76.3%. CAPEX/Revenue dropped on 391 pp from 467% in 2013 to 76.3% in 2016. It's average CAPEX/Revenue for the last three years was 137%.Battling declining revenue TORC Oil & Gas Ltd made large investments to CAPEX (150% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-3.43%) and ROE (-3.81%). ROIC surged on 10.9 pp from -14.4% to -3.4% in 2016. ROE jumped on 11.6 pp from -15.4% to -3.8% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is 1.8x. Net Debt / EBITDA surged1.8x from to 1.8x in 2016. Debt decreased on 4.9% while cash surged.
Management team
The company's CEO Brett Herman is a founder and has spent 8 years at the company.
Appendix 1: Peers in Energy
Below you can find TORC Oil & Gas 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) | | 15.4% | 16.9% | -29.5% | -19.1% |
|---|
| TORC Oil & Gas Ltd ($TOG) | | 370.3% | 91.8% | -10.1% | -0.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| TORC Oil & Gas Ltd ($TOG) | 69.0% | 75.2% | 76.5% | 63.4% | 60.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 34.1% | 28.9% | 9.0% | 27.3% |
|---|
| TORC Oil & Gas Ltd ($TOG) | -6.9% | 38.8% | 41.8% | -16.8% | 50.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
| Seven Generations Energy Ltd ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| Crew Energy Inc ($CR) | 80.1% | 83.7% | 139.5% | 136.8% | 63.8% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.0% | 27.6% | 22.9% |
|---|
| TORC Oil & Gas Ltd ($TOG) | 453.8% | 466.9% | 104.5% | 229.4% | 76.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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) | 3.9% | 5.8% | 5.7% | -8.2% | -1.9% |
|---|
| TORC Oil & Gas Ltd ($TOG) | -4.7% | -0.7% | -0.2% | -14.4% | -3.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 2.7x |
|---|
