Gibson Energy Inc Net Debt / EBITDA jumped on 9.4x from 8.5x to 17.9x in 2016 while Revenue dropped on 15.0%
07.03.2017 • About Gibson Energy Inc (
$GEI) • By InTwits
Gibson Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Gibson Energy Inc doesn't have a profitable business model yet: 2016 ROIC is -6.7%
- EBITDA Margin is declining: 1.6% in 2016 vs. 2.7% in 2015 vs. 6.1% in 2012
- EBITDA Margin is quite volatile: 1.6% in 2016, 2.7% in 2015, 5.1% in 2014, 6.0% in 2013, 6.1% in 2012
- Gibson Energy Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 109 in 2016, 88.1 in 2015, 39.6 in 2014, 22.3 in 2013, 16.6 in 2012
- The company has unprofitable business model: ROIC is at -6.7%
- It operates with high leverage: Net Debt/EBITDA is 17.9x while industry average is 4.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Gibson Energy Inc ($GEI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,913 | 6,941 | 8,574 | 5,405 | 4,594 | -15.0% |
| Gross Profit | 205 | 274 | 274 | 109 | 25 | -77.3% |
| SG&A | 40 | 47 | 56 | 72 | 70 | -2.6% |
| EBITDA | 300 | 418 | 440 | 146 | 73 | -50.4% |
| Net Income | 116 | 104 | 92 | -281 | -160 | |
Balance Sheet
|
|---|
| Cash | 61 | 97 | 132 | 83 | 60 | -27.3% |
| Short Term Debt | 38 | 0 | 0 | 35 | 2 | -93.4% |
| Long Term Debt | 600 | 758 | 1,165 | 1,291 | 1,359 | 5.2% |
Cash flow
|
|---|
| Capex | 169 | 227 | 355 | 319 | 241 | -24.4% |
Ratios
|
|---|
| Revenue growth | -3.1% | 41.3% | 23.5% | -37.0% | -15.0% | |
| EBITDA growth | 24.9% | 39.3% | 5.3% | -66.7% | -50.4% | |
| Gross Margin | 4.2% | 4.0% | 3.2% | 2.0% | 0.5% | -1.5% |
| EBITDA Margin | 6.1% | 6.0% | 5.1% | 2.7% | 1.6% | -1.1% |
| Net Income Margin | 2.4% | 1.5% | 1.1% | -5.2% | -3.5% | 1.7% |
| SG&A, % of revenue | 0.8% | 0.7% | 0.7% | 1.3% | 1.5% | 0.2% |
| CAPEX, % of revenue | 3.4% | 3.3% | 4.1% | 5.9% | 5.2% | -0.7% |
| ROIC | 9.2% | 10.4% | 9.0% | -4.3% | -6.7% | -2.4% |
| ROE | 10.8% | 7.8% | 6.6% | -21.6% | -14.4% | 7.3% |
| Net Debt/EBITDA | 1.9x | 1.6x | 2.4x | 8.5x | 17.9x | 9.4x |
Gibson Energy Inc ($GEI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 959 | 1,122 | 1,206 | 1,307 | -31.1% | -28.7% | -10.6% | 19.9% |
| EBITDA | 64 | -68 | 53 | 23 | -43.9% | -207.5% | -41.0% | |
| Net Income | 44 | -134 | -33 | -37 | | | | |
Balance Sheet
|
|---|
| Cash | 39 | 242 | 95 | 60 | -77.3% | 41.5% | 160.9% | -27.3% |
| Short Term Debt | 90 | 0 | 0 | 2 | | | | -93.4% |
| Long Term Debt | 1,244 | 1,333 | 1,341 | 1,359 | 1.5% | 9.8% | 5.9% | 5.2% |
Ratios
|
|---|
| Gross Margin | 2.8% | -1.2% | -0.7% | 1.6% | -1.5% | -2.5% | -3.6% | 2.3% |
| EBITDA Margin | 6.7% | -6.0% | 4.4% | 1.8% | -1.5% | -10.0% | -2.3% | 12.8% |
| Net Income Margin | 4.6% | -12.0% | -2.7% | -2.8% | 6.1% | -11.5% | 0.3% | 16.7% |
Revenue and profitability
Gibson Energy Inc's Revenue dropped on 15.0%. Annual revenue decline showed slowdown in 16Q4 - revenue surged on 19.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.3 pp from 2.0% to 6.3% in 2016.
Gross Margin decreased slightly on 1.5 pp from 2.0% to 0.54% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased slightly on 1.7 pp from -5.2% to -3.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Gibson Energy Inc had CAPEX/Revenue of 5.2%. CAPEX/Revenue increased slightly on 2.0 pp from 3.3% in 2013 to 5.2% in 2016. It's average CAPEX/Revenue for the last three years was 5.1%.Gibson Energy Inc has spent a lot to CAPEX (332% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-6.66%) and ROE (-14.36%). ROIC decreased on 2.4 pp from -4.3% to -6.7% in 2016. ROE increased on 7.3 pp from -21.6% to -14.4% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 17.9x and Debt / EBITDA is 18.8x. Net Debt / EBITDA jumped on 9.4x from 8.5x to 17.9x in 2016. Debt increased on 2.6% while cash dropped on 27.3%.
Management team
A Stewart Hanlon is a Gibson Energy Inc's CEO. A Stewart Hanlon is a founder and has spent 9 years at the company. Sean Brown is a Gibson Energy Inc's CFO. Sean Brown has spent 2 years at the company.
Appendix 1: Peers in Energy
Below you can find Gibson Energy 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) | | 15.4% | 16.9% | -27.7% | -19.1% |
|---|
| Gibson Energy Inc ($GEI) | | 41.3% | 23.5% | -37.0% | -15.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Gibson Energy Inc ($GEI) | 4.2% | 4.0% | 3.2% | 2.0% | 0.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 29.2% |
|---|
| Gibson Energy Inc ($GEI) | 6.1% | 6.0% | 5.1% | 2.7% | 1.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% |
|---|
| Gibson Energy Inc ($GEI) | 3.4% | 3.3% | 4.1% | 5.9% | 5.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | 5.5% | -8.5% | -1.9% |
|---|
| Gibson Energy Inc ($GEI) | 9.2% | 10.4% | 9.0% | -4.3% | -6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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) | 1.5x | 1.4x | 1.4x | 2.6x | 2.6x |
|---|
| Gibson Energy Inc ($GEI) | 1.9x | 1.6x | 2.4x | 8.5x | 17.9x |
