Paramount Resources Ltd EBITDA surged on 2,356% in 2016 and EBITDA Margin surged on 42.3 pp from 1.2% to 43.5%
09.03.2017 • About Paramount Resources Ltd (
$POU) • By InTwits
Paramount Resources Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Paramount Resources Ltd doesn't have a profitable business model yet: 2016 ROIC is 1.6%
- EBITDA Margin is quite volatile: 43.5% in 2016, 1.2% in 2015, 43.0% in 2014, 18.0% in 2013, 23.9% in 2012
- Paramount Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 245.3%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 201 in 2016, 494 in 2015, 941 in 2014, 736 in 2013, 624 in 2012
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Paramount Resources Ltd ($POU) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 159.1 | 219.9 | 332.5 | 366.4 | 246.6 | -32.7% |
| Gross Profit | 83.3 | 127.5 | 225.3 | 210.6 | 93.1 | -55.8% |
| SG&A | 18.1 | 19.5 | 23.9 | 23.9 | 25.9 | 8.5% |
| EBITDA | 38.0 | 39.6 | 142.9 | 4.4 | 107.2 | 2,356.2% |
| Net Income | -61.9 | -59.1 | -71.7 | -901.3 | 1,165.3 | |
Balance Sheet
|
|---|
| Cash | 146.7 | 10.7 | 18.3 | 11.9 | 621.9 | 5,107.9% |
| Short Term Debt | 40.7 | 75.6 | 81.5 | 100.9 | 0.0 | -100.0% |
| Long Term Debt | 660.7 | 882.6 | 1,210.4 | 1,750.2 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 623.6 | 736.2 | 941.5 | 494.0 | 201.0 | -59.3% |
Ratios
|
|---|
| Revenue growth | -18.8% | 38.2% | 51.2% | 10.2% | -32.7% | |
| EBITDA growth | -17.4% | 4.2% | 261.2% | -96.9% | 2,356.2% | |
| Gross Margin | 52.4% | 58.0% | 67.8% | 57.5% | 37.8% | -19.7% |
| EBITDA Margin | 23.9% | 18.0% | 43.0% | 1.2% | 43.5% | 42.3% |
| Net Income Margin | -38.9% | -26.9% | -21.6% | -246.0% | 472.5% | 718.5% |
| SG&A, % of revenue | 11.4% | 8.9% | 7.2% | 6.5% | 10.5% | 4.0% |
| CAPEX, % of revenue | 392.0% | 334.8% | 283.2% | 134.8% | 81.5% | -53.3% |
| ROIC | -19.0% | -6.9% | -4.0% | -26.2% | 1.6% | 27.7% |
| ROE | -7.4% | -6.3% | -6.0% | -94.8% | 106.7% | 201.5% |
| Net Debt/EBITDA | 14.6x | 23.9x | 8.9x | 421.5x | -5.8x | -427.3x |
Paramount Resources Ltd ($POU) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 88 | 74 | 52 | 32 | 14.6% | -20.2% | -52.2% | -63.5% |
| Net Income | -46 | -31 | 1,029 | 212 | | | | |
Balance Sheet
|
|---|
| Cash | 18 | 12 | 313 | 622 | -27.8% | -91.8% | 1,371.7% | 5,107.9% |
| Short Term Debt | 101 | 59 | 0 | 0 | 8.4% | -37.3% | -100.0% | -100.0% |
| Long Term Debt | 1,701 | 1,245 | 284 | 0 | 18.8% | -26.6% | -83.1% | -100.0% |
Ratios
|
|---|
| Gross Margin | 50.3% | 23.8% | 27.0% | 52.7% | -8.1% | -34.5% | -30.8% | -2.7% |
| Net Income Margin | -52.0% | -41.1% | 1,993.8% | 658.8% | 39.2% | 23.5% | 2,153.0% | 1,337.9% |
Revenue and profitability
The company's Revenue dropped on 32.7%. Revenue decline showed acceleration in 16Q4 - it was 63.5% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 42.3 pp from 1.2% to 43.5% in 2016.
Gross Margin dropped on 19.7 pp from 57.5% to 37.8% in 2016. SG&A as a % of Revenue increased on 4.0 pp from 6.5% to 10.5% in 2016.
Net Income marign surged on 718 pp from -246% to 473% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 81.5% in 2016. CAPEX/Revenue dropped on 253 pp from 335% in 2013 to 81.5% in 2016. For the last three years the average CAPEX/Revenue was 166%.The company has spent a lot to CAPEX (188% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at good ROE (106.74%) while ROIC is low (1.58%). ROIC jumped on 27.7 pp from -26.2% to 1.6% in 2016. ROE jumped on 202 pp from -94.8% to 107% in 2016.
Leverage (Debt)
The company paid down all the debt in 2016. Cash jumped on 5,108%.
Management team
James H T Riddell "Jim" is a Paramount Resources Ltd's CEO. James H T Riddell "Jim" is a founder and has spent 3 years at the company. Bernard K Lee "Bernie" is a The company's CFO. Bernard K Lee "Bernie" has spent 11 years at the company.
Appendix 1: Peers in Energy
Below we provide Paramount Resources Ltd 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% | -18.0% |
|---|
| Paramount Resources Ltd ($POU) | | 38.2% | 51.2% | 10.2% | -32.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Paramount Resources Ltd ($POU) | 52.4% | 58.0% | 67.8% | 57.5% | 37.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% | 27.3% |
|---|
| Paramount Resources Ltd ($POU) | 23.9% | 18.0% | 43.0% | 1.2% | 43.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 45.0% | 27.6% | 22.9% |
|---|
| Paramount Resources Ltd ($POU) | 392.0% | 334.8% | 283.2% | 134.8% | 81.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% | -8.2% | -1.9% |
|---|
| Paramount Resources Ltd ($POU) | -19.0% | -6.9% | -4.0% | -26.2% | 1.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($PXX) | -0.2x | -0.1x | 0.2x | 3,726.1x | -0.2x |
| 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 ($TET) | 2.6x | 1.8x | 2.3x | 25.5x | 7.3x |
| TransCanada Corp ($TRP) | 5.5x | 5.7x | 5.7x | 22.1x | 9.6x |
| |
|---|
| Median (78 companies) | 1.5x | 1.4x | 1.4x | 2.6x | 2.7x |
|---|
| Paramount Resources Ltd ($POU) | 14.6x | 23.9x | 8.9x | 421.5x | -5.8x |
