Polaris Infrastructure Inc EBITDA Margin jumped on 86.9 pp from -5.4% to 81.5% in 2016 and Revenue increased on 9.0%
07.03.2017 • About Polaris Infrastructure Inc (
$PIF) • By InTwits
Polaris Infrastructure Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 81.5% in 2016, -5.4% in 2015, 71.2% in 2014, 66.4% in 2013, 35.5% in 2012
- Polaris Infrastructure Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 59.1%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 25.6 in 2016, 16.1 in 2015, 4.4 in 2014, 27.7 in 2013, 41.4 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Polaris Infrastructure Inc ($PIF) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 28.062 | 46.210 | 48.184 | 50.149 | 54.659 | 9.0% |
| Gross Profit | 11.187 | 15.545 | 15.409 | 43.492 | 48.418 | 11.3% |
| SG&A | | | | 5.296 | 3.668 | -30.7% |
| EBITDA | 9.955 | 30.664 | 34.329 | -2.720 | 44.542 | |
| Net Income | -60.130 | -50.703 | -24.677 | -37.494 | -4.261 | |
Balance Sheet
|
|---|
| Cash | 51.330 | 22.550 | 15.292 | 61.592 | 45.739 | -25.7% |
| Short Term Debt | 63.535 | 19.367 | 208.539 | 9.246 | 10.647 | 15.1% |
| Long Term Debt | 210.592 | 239.841 | 44.637 | 171.120 | 166.238 | -2.9% |
Cash flow
|
|---|
| Capex | 41.360 | 27.721 | 4.399 | 16.117 | 25.607 | 58.9% |
Ratios
|
|---|
| Revenue growth | 529.4% | 64.7% | 4.3% | 4.1% | 9.0% | |
| EBITDA growth | -205.3% | 208.0% | 12.0% | -107.9% | -1,737.4% | |
| Gross Margin | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% | 1.9% |
| EBITDA Margin | 35.5% | 66.4% | 71.2% | -5.4% | 81.5% | 86.9% |
| Net Income Margin | -214.3% | -109.7% | -51.2% | -74.8% | -7.8% | 67.0% |
| SG&A, % of revenue | | | | 10.6% | 6.7% | -3.8% |
| CAPEX, % of revenue | 147.4% | 60.0% | 9.1% | 32.1% | 46.8% | 14.7% |
| ROIC | -0.6% | 1.3% | 1.9% | -7.0% | 5.5% | 12.6% |
| ROE | -25.7% | -27.6% | -16.7% | -22.3% | -2.1% | 20.1% |
| Net Debt/EBITDA | 22.4x | 7.7x | 6.9x | | 2.9x | 2.9x |
Polaris Infrastructure Inc ($PIF) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 12 | 14 | 16 | 1.8% | -5.2% | 10.6% | 29.7% |
| EBITDA | 10 | 10 | 12 | 13 | 5.7% | | | 44.2% |
| Net Income | -2 | -2 | -2 | 2 | | | | |
Balance Sheet
|
|---|
| Cash | 56 | 48 | 42 | 46 | 232.3% | -33.6% | -34.1% | -25.7% |
| Short Term Debt | 10 | 10 | 10 | 11 | -95.1% | -42.4% | -17.1% | 15.1% |
| Long Term Debt | 170 | 168 | 168 | 166 | 315.4% | -4.4% | -3.2% | -2.9% |
Ratios
|
|---|
| Gross Margin | 87.9% | 87.1% | 89.6% | 89.4% | 0.2% | 0.2% | 2.5% | 4.2% |
| EBITDA Margin | 80.1% | 78.8% | 82.5% | 83.7% | 3.0% | 85.3% | 241.7% | 8.4% |
| Net Income Margin | -16.5% | -19.0% | -11.5% | 11.2% | 1.3% | 56.2% | 176.3% | 23.1% |
Revenue and profitability
The company's Revenue increased on 9.0%. Revenue growth showed acceleration in 16Q4 - it increased 29.7% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.0 pp from 29.1% to 27.1% in FY2016.
Gross Margin increased slightly on 1.9 pp from 86.7% to 88.6% in 2016. SG&A as a % of Revenue decreased on 3.8 pp from 10.6% to 6.7% in 2016.
Net Income marign jumped on 67.0 pp from -74.8% to -7.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 46.8% in 2016. The company showed big decline in CAPEX/Revenue of 13.1 pp from 60.0% in 2013 to 46.8% in 2016. It's average level of CAPEX/Revenue for the last three years was 29.4%.Polaris Infrastructure Inc invested a large share of EBITDA (57.5%) to CAPEX.
Return on investment
The company operates at low but positive ROIC (5.53%) and negative ROE (-2.14%). ROIC jumped on 12.6 pp from -7.0% to 5.5% in 2016. ROE jumped on 20.1 pp from -22.3% to -2.1% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.9x and Debt / EBITDA is 4.0x. Net Debt / EBITDA jumped2.9x from to 2.9x in 2016. Debt decreased slightly on 1.9% while cash dropped on 25.7%.
Appendix 1: Peers in Energy
Below you can find Polaris Infrastructure 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 ($OEG) | | | 6,002.6% | 231.5% | 57.4% |
| |
|---|
| Median (116 companies) | | 15.4% | 17.0% | -29.5% | -19.1% |
|---|
| Polaris Infrastructure Inc ($PIF) | | 64.7% | 4.3% | 4.1% | 9.0% |
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% |
| Freehold Royalties Ltd ($FRU) | 90.4% | 89.0% | 90.2% | 86.3% | 86.3% |
| |
|---|
| Median (114 companies) | 32.0% | 32.1% | 32.4% | 33.6% | 31.5% |
|---|
| Polaris Infrastructure Inc ($PIF) | 39.9% | 33.6% | 32.0% | 86.7% | 88.6% |
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 ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 9.0% | 27.3% |
|---|
| Polaris Infrastructure Inc ($PIF) | 35.5% | 66.4% | 71.2% | -5.4% | 81.5% |
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 ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.6% | 27.6% | 22.9% |
|---|
| Polaris Infrastructure Inc ($PIF) | 147.4% | 60.0% | 9.1% | 32.1% | 46.8% |
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 ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.9% | 5.8% | 5.7% | -8.5% | -1.9% |
|---|
| Polaris Infrastructure Inc ($PIF) | -0.6% | 1.3% | 1.9% | -7.0% | 5.5% |
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) | 1.5x | 1.4x | 1.4x | 2.6x | 2.6x |
|---|
