Ecopetrol SA reports 75.9% EBITDA growth while 8.8% Revenue decline
06.03.2017 • About Ecopetrol SA (
$ECP) • By InTwits
Ecopetrol SA reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ecopetrol SA is a company in decline: FY2016 revenue growth was -8.8%, 5 years revenue CAGR was -6.3%
- Ecopetrol SA has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.9%.
- CAPEX is quite volatile: 5,768,000 in FY2016, 8,548,933 in FY2015, 8,923,568 in FY2014, 14,227,777 in FY2013, 15,467,862 in FY2012
- The company has business model with low profitability: ROIC is at 9.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ecopetrol SA ($ECP) key annual financial indicators
| mln. COP | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 68,852,002 | 70,428,715 | 65,971,888 | 52,347,271 | 47,732,000 | -8.8% |
| Gross Profit | 28,316,494 | 27,874,433 | 22,996,760 | 15,352,755 | 13,496,000 | -12.1% |
| SG&A | 4,973,590 | 6,039,703 | 6,551,360 | 5,735,253 | 3,673,000 | -36.0% |
| EBITDA | 28,657,653 | 27,352,819 | 21,500,330 | 9,486,755 | 16,687,000 | 75.9% |
| Net Income | 14,778,900 | 13,106,500 | 5,046,520 | -7,193,860 | 1,565,000 | |
Balance Sheet
|
|---|
| Cash | 7,940,690 | 8,841,438 | 7,618,178 | 6,550,450 | 8,410,000 | 28.4% |
| Short Term Debt | 2,359,488 | 774,559 | 3,517,522 | 4,573,620 | 4,126,000 | -9.8% |
| Long Term Debt | 11,346,337 | 21,423,992 | 31,524,106 | 48,649,718 | 48,096,000 | -1.1% |
Cash flow
|
|---|
| Capex | 15,467,862 | 14,227,777 | 8,923,568 | 8,548,933 | 5,768,000 | -32.5% |
Ratios
|
|---|
| Revenue growth | 4.4% | 2.3% | -6.3% | -20.7% | -8.8% | |
| EBITDA growth | -8.5% | -4.6% | -21.4% | -55.9% | 75.9% | |
| Gross Margin | 41.1% | 39.6% | 34.9% | 29.3% | 28.3% | -1.1% |
| EBITDA Margin | 41.6% | 38.8% | 32.6% | 18.1% | 35.0% | 16.8% |
| Net Income Margin | 21.5% | 18.6% | 7.6% | -13.7% | 3.3% | 17.0% |
| SG&A, % of revenue | 7.2% | 8.6% | 9.9% | 11.0% | 7.7% | -3.3% |
| CAPEX, % of revenue | 22.5% | 20.2% | 13.5% | 16.3% | 12.1% | -4.2% |
| ROIC | 29.3% | 24.4% | 16.5% | 3.0% | 9.6% | 6.6% |
| ROE | 24.7% | 19.3% | 8.5% | -16.3% | 3.7% | 20.0% |
| Net Debt/EBITDA | 0.2x | 0.5x | 1.3x | 4.9x | 2.6x | -2.3x |
Ecopetrol SA ($ECP) key quoterly financial indicators
| mln. COP | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 10,485,000 | 11,751,000 | 12,183,000 | 13,313,000 | -14.8% | -16.1% | -6.3% | 4.2% |
| EBITDA | 3,312,000 | 4,344,000 | 4,614,000 | 4,337,000 | -16.0% | -16.6% | 2.3% | |
| Net Income | 363,000 | 787,000 | 229,000 | 186,000 | 126.9% | -47.8% | -65.0% | |
Balance Sheet
|
|---|
| Cash | 7,636,000 | 7,918,000 | 7,713,000 | 8,410,000 | -30.2% | -14.7% | -17.1% | 28.4% |
| Short Term Debt | 5,101,000 | 4,924,000 | 5,057,000 | 4,126,000 | 30.0% | 16.7% | 16.4% | -9.8% |
| Long Term Debt | 48,039,000 | 48,509,000 | 46,913,000 | 48,096,000 | 23.8% | 16.2% | -3.4% | -1.1% |
Ratios
|
|---|
| Gross Margin | 29.0% | 44.2% | 28.3% | 27.1% | -1.5% | -0.2% | -2.0% | 5.0% |
| EBITDA Margin | 31.6% | 37.0% | 37.9% | 32.6% | -0.5% | -0.2% | 3.2% | 75.3% |
| Net Income Margin | 3.5% | 6.7% | 1.9% | 1.4% | 2.2% | -4.1% | -3.1% | 50.8% |
Revenue and profitability
Ecopetrol SA's Revenue decreased on 8.8%. Annual revenue decline showed slowdown in FY16Q4 - revenue increased on 4.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.8 pp from 18.1% to 35.0% in FY2016.
Gross Margin decreased slightly on 1.1 pp from 29.3% to 28.3% in FY2016. SG&A as a % of Revenue decreased on 3.3 pp from 11.0% to 7.7% in FY2016.
Net Income marign jumped on 17.0 pp from -13.7% to 3.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Ecopetrol SA had CAPEX/Revenue of 12.1%. CAPEX/Revenue decreased on 8.1 pp from 20.2% in FY2013 to 12.1% in FY2016. For the last three years the average CAPEX/Revenue was 14.0%.
Return on investment
The company operates at low ROIC (9.59%) and ROE (3.69%). ROIC increased on 6.6 pp from 3.0% to 9.6% in FY2016. ROE surged on 20.0 pp from -16.3% to 3.7% in FY2016.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 3.1x Debt / EBITDA. Net Debt / EBITDA dropped on 2.3x from 4.9x to 2.6x in FY2016. Debt decreased slightly on 1.9% while cash surged on 28.4%.
Management team
Ecopetrol SA's CEO Juan Carlos Echeverry has spent 3 years at the company. The company's CFO Maria Fernanda Suarez has spent 3 years at the company.
Appendix 1: Peers in Energy
Below we provide Ecopetrol SA 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% | 17.0% | -29.5% | -19.1% |
|---|
| Ecopetrol SA ($ECP) | | 2.3% | -6.3% | -20.7% | -8.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% | 33.9% | 32.5% |
|---|
| Ecopetrol SA ($ECP) | 41.1% | 39.6% | 34.9% | 29.3% | 28.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Ecopetrol SA ($ECP) | 41.6% | 38.8% | 32.6% | 18.1% | 35.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Ecopetrol SA ($ECP) | 22.5% | 20.2% | 13.5% | 16.3% | 12.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($ERF) | -17.3% | 10.2% | 11.5% | -55.5% | 16.3% |
| Whitecap Resources Inc ($WCP) | 7.1% | 8.1% | 9.6% | -10.6% | 10.1% |
| Parkland Fuel Corp ($PKI) | 22.3% | 23.3% | 9.9% | 7.8% | 8.6% |
| Inter Pipeline Ltd ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| Pembina Pipeline Corp ($PPL) | 8.2% | 8.5% | 7.6% | 6.3% | 6.9% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Ecopetrol SA ($ECP) | 29.3% | 24.4% | 16.5% | 3.0% | 9.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 2.7x |
|---|
| Ecopetrol SA ($ECP) | 0.2x | 0.5x | 1.3x | 4.9x | 2.6x |
