Tourmaline Oil Corp reports 140% Net Income decline and 6.5% Revenue decline
07.03.2017 • About Tourmaline Oil Corp (
$TOU) • By InTwits
Tourmaline Oil Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tourmaline Oil Corp doesn't have a profitable business model yet: 2016 ROIC is 0.2%
- Tourmaline Oil Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 163.3%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 1,981 in 2016, 1,543 in 2015, 2,064 in 2014, 1,393 in 2013, 754 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tourmaline Oil Corp ($TOU) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 425 | 738 | 1,260 | 1,280 | 1,196 | -6.5% |
| SG&A | 15 | 20 | 25 | 25 | 30 | 19.4% |
| EBITDA | 288 | 590 | 1,230 | 897 | 678 | -24.4% |
| Net Income | 16 | 148 | 489 | 80 | -32 | -139.9% |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 263 | 0 | 0 | |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 361 | 594 | 919 | 1,267 | 1,407 | 11.1% |
Cash flow
|
|---|
| Capex | 754 | 1,393 | 2,064 | 1,543 | 1,981 | 28.4% |
Ratios
|
|---|
| Revenue growth | 23.0% | 73.8% | 70.8% | 1.6% | -6.5% | |
| EBITDA growth | 23.8% | 104.8% | 108.5% | -27.0% | -24.4% | |
| EBITDA Margin | 67.9% | 80.0% | 97.6% | 70.1% | 56.7% | -13.4% |
| Net Income Margin | 3.7% | 20.1% | 38.8% | 6.3% | -2.7% | -8.9% |
| SG&A, % of revenue | 3.4% | 2.7% | 2.0% | 2.0% | 2.5% | 0.5% |
| CAPEX, % of revenue | 177.7% | 188.8% | 163.8% | 120.6% | 165.6% | 45.1% |
| ROIC | 1.6% | 6.2% | 14.3% | 3.2% | 0.2% | -3.1% |
| ROE | 0.6% | 4.9% | 12.6% | 1.7% | -0.5% | -2.2% |
| Net Debt/EBITDA | 1.3x | 1.0x | 0.5x | 1.4x | 2.1x | 0.7x |
Tourmaline Oil Corp ($TOU) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 279 | 246 | 299 | 373 | -11.1% | -18.1% | -2.4% | 2.9% |
| EBITDA | 142 | 78 | 208 | 251 | -32.3% | -65.3% | -9.2% | 6.0% |
| Net Income | -38 | -78 | 25 | 60 | -273.2% | | -13.2% | 72.1% |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | -100.0% | | | |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 1,575 | 1,330 | 1,241 | 1,407 | 35.9% | 11.1% | 8.4% | 11.1% |
Ratios
|
|---|
| EBITDA Margin | 50.8% | 31.7% | 69.6% | 67.2% | -15.9% | -43.3% | -5.2% | 2.0% |
| Net Income Margin | -13.8% | -31.7% | 8.3% | 16.0% | -20.8% | -30.0% | -1.0% | 6.4% |
Revenue and profitability
Tourmaline Oil Corp's Revenue decreased on 6.5%. Annual revenue decline showed slowdown in 16Q4 - revenue increased on 2.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 13.4 pp from 70.1% to 56.7% in 2016.
SG&A as a % of Revenue increased slightly on 0.55 pp from 2.0% to 2.5% in 2016.
Net Income marign decreased on 8.9 pp from 6.3% to -2.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
Tourmaline Oil Corp's CAPEX/Revenue was 166% in 2016. Tourmaline Oil Corp's CAPEX/Revenue dropped on 23.2 pp from 189% in 2013 to 166% in 2016. For the last three years the average CAPEX/Revenue was 150%.Battling declining revenue Tourmaline Oil Corp made large investments to CAPEX (292% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (0.15%) and negative ROE (-0.54%). ROIC decreased on 3.1 pp from 3.2% to 0.15% in 2016. ROE decreased on 2.2 pp from 1.7% to -0.54% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.1x and Debt / EBITDA is 2.1x. Net Debt / EBITDA surged on 0.7x from 1.4x to 2.1x in 2016. Debt surged on 11.1% while cash didn't change in 2016.
Management team
Tourmaline Oil Corp's CEO is Michael L Rose. Michael L Rose is a founder and has 10 years tenure at the company. Tourmaline Oil Corp's CFO is Brian G Robinson. Brian G Robinson has 10 years tenure at the company.
Appendix 1: Peers in Energy
Below we provide Tourmaline Oil Corp 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) | | 15.4% | 16.9% | -29.5% | -19.1% |
|---|
| Tourmaline Oil Corp ($TOU) | | 73.8% | 70.8% | 1.6% | -6.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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 (115 companies) | 32.0% | 32.1% | 32.4% | 33.6% | 32.0% |
|---|
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 ($INE) | 111.8% | 110.0% | 82.9% | 83.4% | 83.5% |
| |
|---|
| Median (128 companies) | 25.3% | 34.1% | 28.9% | 8.1% | 27.3% |
|---|
| Tourmaline Oil Corp ($TOU) | 67.9% | 80.0% | 97.6% | 70.1% | 56.7% |
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 ($VII) | 452.8% | 513.1% | 227.4% | 191.2% | 73.5% |
| |
|---|
| Median (129 companies) | 42.3% | 39.0% | 45.0% | 27.6% | 22.9% |
|---|
| Tourmaline Oil Corp ($TOU) | 177.7% | 188.8% | 163.8% | 120.6% | 165.6% |
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 ($IPL) | 9.5% | 8.0% | 7.5% | 9.6% | 8.5% |
| |
|---|
| Median (128 companies) | 3.9% | 5.4% | 5.5% | -8.5% | -1.9% |
|---|
| Tourmaline Oil Corp ($TOU) | 1.6% | 6.2% | 14.3% | 3.2% | 0.2% |
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 ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| |
|---|
| Median (78 companies) | 1.6x | 1.5x | 1.4x | 2.7x | 2.7x |
|---|
| Tourmaline Oil Corp ($TOU) | 1.3x | 1.0x | 0.5x | 1.4x | 2.1x |
