Parex Resources Inc reports 48.1% EBITDA decline and 17.0% Revenue decline
07.03.2017 • About Parex Resources Inc (
$PXT) • By InTwits
Parex Resources Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Parex Resources Inc doesn't have a profitable business model yet: 2016 ROIC is -7.0%
- EBITDA Margin is declining: 14.6% in 2016 vs. 23.3% in 2015 vs. 53.0% in 2012
- EBITDA Margin is quite volatile: 14.6% in 2016, 23.3% in 2015, 28.9% in 2014, 56.9% in 2013, 53.0% in 2012
- Parex Resources Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 38.2%. At the same time it's in pair with industry average of 45.3%.
- CAPEX is quite volatile: 108 in 2016, 125 in 2015, 296 in 2014, 219 in 2013, 268 in 2012
- The company has unprofitable business model: ROIC is at -7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Parex Resources Inc ($PXT) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 487.6 | 559.2 | 669.2 | 487.1 | 404.4 | -17.0% |
| Gross Profit | 451.3 | 287.8 | 360.5 | 261.2 | 235.3 | -9.9% |
| SG&A | 31.0 | 30.4 | 32.5 | 36.7 | 30.8 | -16.2% |
| EBITDA | 258.4 | 318.2 | 193.1 | 113.7 | 59.0 | -48.1% |
| Net Income | 39.9 | 12.7 | -108.8 | -44.6 | -46.4 | |
Balance Sheet
|
|---|
| Cash | 32.0 | 56.5 | 39.0 | 94.8 | 149.2 | 57.4% |
| Short Term Debt | 0.0 | 1.6 | 2.1 | 2.1 | 10.9 | 418.1% |
| Long Term Debt | 74.8 | 74.6 | 35.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 267.7 | 219.3 | 296.2 | 125.5 | 107.7 | -14.2% |
Ratios
|
|---|
| Revenue growth | 210.1% | 14.7% | 19.7% | -27.2% | -17.0% | |
| EBITDA growth | 174.8% | 23.2% | -39.3% | -41.1% | -48.1% | |
| Gross Margin | 92.6% | 51.5% | 53.9% | 53.6% | 58.2% | 4.6% |
| EBITDA Margin | 53.0% | 56.9% | 28.9% | 23.3% | 14.6% | -8.7% |
| Net Income Margin | 8.2% | 2.3% | -16.3% | -9.2% | -11.5% | -2.3% |
| SG&A, % of revenue | 6.4% | 5.4% | 4.9% | 7.5% | 7.6% | 0.1% |
| CAPEX, % of revenue | 54.9% | 39.2% | 44.3% | 25.8% | 26.6% | 0.9% |
| ROIC | 12.4% | 15.1% | -3.2% | -4.5% | -7.0% | -2.5% |
| ROE | 9.0% | 2.7% | -19.0% | -6.4% | -6.4% | -0.0% |
| Net Debt/EBITDA | 0.2x | 0.1x | -0.0x | -0.8x | -2.3x | -1.5x |
Parex Resources Inc ($PXT) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 76 | 90 | 118 | 120 | -38.5% | -37.2% | 2.0% | 15.6% |
| EBITDA | 11 | 31 | 39 | -22 | -73.6% | -46.0% | 387.1% | -424.1% |
| Net Income | -8 | -0 | 7 | -45 | | -110.2% | | |
Balance Sheet
|
|---|
| Cash | 91 | 94 | 132 | 149 | 180.8% | -9.1% | 20.7% | 57.4% |
| Short Term Debt | 0 | 0 | 0 | 11 | -100.0% | -100.0% | | 418.1% |
| Long Term Debt | 0 | 0 | 0 | 0 | -100.0% | | | |
Ratios
|
|---|
| Gross Margin | 41.3% | 53.9% | 62.4% | 68.0% | -10.4% | -7.5% | 11.9% | 19.3% |
| EBITDA Margin | 14.2% | 34.5% | 33.5% | -18.6% | -18.9% | -5.6% | 26.5% | -25.3% |
| Net Income Margin | -10.0% | -0.2% | 5.8% | -37.8% | 2.5% | -1.5% | 29.5% | -34.4% |
Revenue and profitability
Parex Resources Inc's Revenue dropped on 17.0%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 15.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 59.9 pp from -28.4% to 31.5% in 2016.
Gross Margin increased on 4.6 pp from 53.6% to 58.2% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased on 2.3 pp from -9.2% to -11.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Parex Resources Inc had CAPEX/Revenue of 26.6%. CAPEX/Revenue dropped on 12.6 pp from 39.2% in 2013 to 26.6% in 2016. Average CAPEX/Revenue for the last three years was 32.2%.Parex Resources Inc has spent a lot to CAPEX (182% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-6.98%) and ROE (-6.38%). ROIC decreased on 2.5 pp from -4.5% to -7.0% in 2016. ROE showed almost no change in 2016.
Leverage (Debt)
Debt level is -2.3x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.5x from -0.8x to -2.3x in 2016. Debt jumped on 418% while cash jumped on 57.4%.
Management team
Parex Resources Inc's CEO is Wayne Kim Foo. Wayne Kim Foo is a founder and has 9 years tenure at the company.
Appendix 1: Peers in Energy
Below we provide Parex Resources Inc 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 ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 16.2% | 16.9% | -29.5% | -19.1% |
|---|
| Parex Resources Inc ($PXT) | | 14.7% | 19.7% | -27.2% | -17.0% |
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 ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
| |
|---|
| Median (114 companies) | 32.0% | 32.1% | 32.2% | 33.6% | 31.5% |
|---|
| Parex Resources Inc ($PXT) | 92.6% | 51.5% | 53.9% | 53.6% | 58.2% |
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 ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 29.2% |
|---|
| Parex Resources Inc ($PXT) | 53.0% | 56.9% | 28.9% | 23.3% | 14.6% |
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 ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.6% | 28.1% | 22.9% |
|---|
| Parex Resources Inc ($PXT) | 54.9% | 39.2% | 44.3% | 25.8% | 26.6% |
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 ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.6% | 5.4% | 5.7% | -8.5% | -1.9% |
|---|
| Parex Resources Inc ($PXT) | 12.4% | 15.1% | -3.2% | -4.5% | -7.0% |
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 ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.6x | 1.5x | 1.4x | 2.7x | 2.7x |
|---|
| Parex Resources Inc ($PXT) | 0.2x | 0.1x | -0.0x | -0.8x | -2.3x |
