Ensign Energy Services Inc CAPEX dropped on 74.2% in 2016 and Revenue dropped on 38.2%
06.03.2017 • About Ensign Energy Services Inc (
$ESI) • By InTwits
Ensign Energy Services Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ensign Energy Services Inc is a company in decline: 2016 revenue growth was -38.2%, 5 years revenue CAGR was -14.6%
- Ensign Energy Services Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.7%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 43.4 in 2016, 168 in 2015, 601 in 2014, 342 in 2013, 307 in 2012
- The company has unprofitable business model: ROIC is at -5.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.9x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ensign Energy Services Inc ($ESI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,197 | 2,098 | 2,322 | 1,391 | 860 | -38.2% |
| Gross Profit | 642 | 574 | 635 | 396 | 238 | -40.0% |
| SG&A | 81 | 88 | 98 | 75 | 53 | -29.9% |
| EBITDA | 564 | 484 | 431 | 231 | 175 | -24.2% |
| Net Income | 218 | 129 | 71 | -104 | -151 | |
Balance Sheet
|
|---|
| Cash | 33 | 79 | 54 | 40 | 30 | -26.1% |
| Short Term Debt | 232 | 327 | 0 | 0 | 134 | |
| Long Term Debt | 297 | 317 | 786 | 794 | 583 | -26.6% |
Cash flow
|
|---|
| Capex | 307 | 342 | 601 | 168 | 43 | -74.2% |
Ratios
|
|---|
| Revenue growth | 16.2% | -4.5% | 10.7% | -40.1% | -38.2% | |
| EBITDA growth | 15.0% | -14.3% | -10.9% | -46.4% | -24.2% | |
| Gross Margin | 29.2% | 27.4% | 27.4% | 28.5% | 27.6% | -0.8% |
| EBITDA Margin | 25.7% | 23.1% | 18.6% | 16.6% | 20.3% | 3.8% |
| Net Income Margin | 9.9% | 6.1% | 3.1% | -7.5% | -17.5% | -10.0% |
| SG&A, % of revenue | 3.7% | 4.2% | 4.2% | 5.4% | 6.1% | 0.7% |
| CAPEX, % of revenue | 14.0% | 16.3% | 25.9% | 12.1% | 5.0% | -7.1% |
| ROIC | 12.5% | 8.1% | 4.1% | -3.1% | -5.4% | -2.3% |
| ROE | 12.1% | 6.7% | 3.5% | -5.0% | -7.7% | -2.6% |
| Net Debt/EBITDA | 0.9x | 1.2x | 1.7x | 3.3x | 3.9x | 0.7x |
Ensign Energy Services Inc ($ESI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 258 | 176 | 191 | 234 | -42.5% | -47.3% | -41.0% | -17.6% |
| EBITDA | 75 | 24 | 39 | 46 | -19.5% | -63.8% | 175.8% | -19.0% |
| Net Income | -15 | -40 | -34 | -62 | -196.7% | | | |
Balance Sheet
|
|---|
| Cash | 28 | 47 | 31 | 30 | -46.7% | -7.7% | -29.9% | -26.1% |
| Short Term Debt | 130 | 130 | 131 | 134 | | | | |
| Long Term Debt | 587 | 582 | 569 | 583 | -28.7% | -24.2% | -28.6% | -26.6% |
Ratios
|
|---|
| Gross Margin | 29.5% | 25.8% | 27.4% | 27.2% | -0.3% | -0.8% | 1.3% | -4.0% |
| EBITDA Margin | 29.1% | 13.6% | 20.2% | 19.8% | 8.3% | -6.2% | 15.9% | -0.3% |
| Net Income Margin | -5.8% | -22.7% | -17.6% | -26.5% | -9.2% | -22.4% | 6.2% | -12.0% |
Revenue and profitability
Ensign Energy Services Inc's Revenue dropped on 38.2%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 17.6%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.8 pp from 16.6% to 20.3% in 2016.
Gross Margin decreased slightly on 0.82 pp from 28.5% to 27.6% in 2016. SG&A as a % of Revenue increased slightly on 0.73 pp from 5.4% to 6.1% in 2016.
Net Income marign dropped on 10.0 pp from -7.5% to -17.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 5.0%. Ensign Energy Services Inc showed big decline in CAPEX/Revenue of 11.3 pp from 16.3% in 2013 to 5.0% in 2016. For the last three years the average CAPEX/Revenue was 14.3%.
Return on investment
The company operates at negative ROIC (-5.43%) and ROE (-7.68%). ROIC decreased on 2.3 pp from -3.1% to -5.4% in 2016. ROE decreased on 2.6 pp from -5.0% to -7.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.9x and Debt / EBITDA is 4.1x. Net Debt / EBITDA surged on 0.7x from 3.3x to 3.9x in 2016. Debt decreased on 9.7% while cash dropped on 26.1%.
Appendix 1: Peers in Energy
Below you can find Ensign Energy Services Inc 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% |
|---|
| Ensign Energy Services Inc ($ESI) | | -4.5% | 10.7% | -40.1% | -38.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Ensign Energy Services Inc ($ESI) | 29.2% | 27.4% | 27.4% | 28.5% | 27.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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) | 25.6% | 35.7% | 28.9% | 8.1% | 29.2% |
|---|
| Ensign Energy Services Inc ($ESI) | 25.7% | 23.1% | 18.6% | 16.6% | 20.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Ensign Energy Services Inc ($ESI) | 14.0% | 16.3% | 25.9% | 12.1% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | -8.5% | -1.9% |
|---|
| Ensign Energy Services Inc ($ESI) | 12.5% | 8.1% | 4.1% | -3.1% | -5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 (78 companies) | 1.6x | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
| Ensign Energy Services Inc ($ESI) | 0.9x | 1.2x | 1.7x | 3.3x | 3.9x |
