Spartan Energy Corp reports 1,153% CAPEX growth and 22.6% Revenue growth
16.03.2017 • About Spartan Energy Corp (
$SPE) • By InTwits
Spartan Energy Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Spartan Energy Corp doesn't have a profitable business model yet: 2016 ROIC is -1.9%
- EBITDA Margin is quite volatile: 51.1% in 2016, -4.3% in 2015, 62.4% in 2014, 38.4% in 2013, 51.7% in 2012
- Spartan Energy Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 167.5%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 855 in 2016, 68.2 in 2015, 252 in 2014, 3.5 in 2013, 4.1 in 2012
- The company has unprofitable business model: ROIC is at -1.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Spartan Energy Corp ($SPE) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10.2 | 13.3 | 135.8 | 130.8 | 160.3 | 22.6% |
| Gross Profit | 6.7 | 9.5 | 94.3 | 75.0 | 88.0 | 17.4% |
| SG&A | 1.9 | 2.0 | 5.6 | 5.6 | 7.2 | 30.0% |
| EBITDA | 5.3 | 5.1 | 84.7 | -5.6 | 82.0 | |
| Net Income | 0.8 | -1.8 | 24.3 | -77.8 | -18.6 | |
Balance Sheet
|
|---|
| Cash | 0.0 | 10.2 | 0.2 | 0.0 | 0.0 | 0.0% |
| Short Term Debt | 11.9 | 0.0 | 74.4 | 85.5 | 222.2 | 159.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 26.8 | |
Cash flow
|
|---|
| Capex | 4.1 | 3.5 | 252.3 | 68.2 | 854.7 | 1,152.8% |
Ratios
|
|---|
| Revenue growth | 16.6% | 29.9% | 923.7% | -3.7% | 22.6% | |
| EBITDA growth | -19,666.7% | -3.5% | 1,562.2% | -106.6% | -1,567.8% | |
| Gross Margin | 65.8% | 71.3% | 69.4% | 57.4% | 54.9% | -2.5% |
| EBITDA Margin | 51.7% | 38.4% | 62.4% | -4.3% | 51.1% | 55.4% |
| Net Income Margin | 8.0% | -13.3% | 17.9% | -59.5% | -11.6% | 47.9% |
| SG&A, % of revenue | 18.3% | 15.3% | 4.1% | 4.3% | 4.5% | 0.3% |
| CAPEX, % of revenue | 39.7% | 26.5% | 185.8% | 52.2% | 533.1% | 480.9% |
| ROIC | 0.8% | -1.6% | 4.9% | -14.2% | -1.9% | 12.2% |
| ROE | 5.2% | -6.0% | 6.7% | -12.1% | -1.9% | 10.2% |
| Net Debt/EBITDA | 2.3x | -2.0x | 0.9x | | 3.0x | 3.0x |
Spartan Energy Corp ($SPE) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 24 | 31 | 43 | 63 | -24.7% | -18.7% | 45.2% | 98.9% |
| EBITDA | 7 | 14 | 29 | 32 | -22.3% | -21.4% | | |
| Net Income | -13 | -7 | 4 | -3 | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | -84.4% | -72.7% | -76.9% | 0.0% |
| Short Term Debt | 3 | 100 | 53 | 222 | -96.7% | 27.0% | -35.9% | 159.9% |
| Long Term Debt | 0 | 0 | 28 | 27 | | | | |
Ratios
|
|---|
| Gross Margin | 46.1% | 59.7% | 51.0% | 58.6% | -4.0% | -6.6% | -5.1% | 3.3% |
| EBITDA Margin | 30.1% | 44.9% | 67.0% | 51.4% | 0.9% | -1.5% | 140.0% | 86.3% |
| Net Income Margin | -53.7% | -21.6% | 9.6% | -5.1% | -16.4% | -4.8% | 123.2% | 77.6% |
Revenue and profitability
Spartan Energy Corp's Revenue surged on 22.6%. Revenue growth showed acceleration in 16Q4 - it increased 98.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.5 pp from 63.8% to 74.3% in 2016.
Gross Margin decreased on 2.5 pp from 57.4% to 54.9% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 47.9 pp from -59.5% to -11.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
Spartan Energy Corp's CAPEX/Revenue was 533% in 2016. CAPEX/Revenue surged on 507 pp from 26.5% in 2013 to 533% in 2016. For the last three years the average CAPEX/Revenue was 257%.The company has spent a lot to CAPEX (1,043% of EBITDA) to fuel its growth.
Return on investment
The company operates at negative ROIC (-1.95%) and ROE (-1.90%). ROIC jumped on 12.2 pp from -14.2% to -1.9% in 2016. ROE jumped on 10.2 pp from -12.1% to -1.9% in 2016.
Leverage (Debt)
Debt level is 3.0x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA jumped3.0x from to 3.0x in 2016. Debt surged on 191% while cash didn't change in 2016.
Management team
Spartan Energy Corp's CEO Richard F Mchardy "Rick" is a founder and has spent 4 years at the company. Spartan Energy Corp's CFO is Adam Macdonald. Adam Macdonald has 4 years tenure at the company.
Appendix 1: Peers in Energy
Below we provide Spartan Energy 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% |
|---|
| Spartan Energy Corp ($SPE) | | 29.9% | 923.7% | -3.7% | 22.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Americas Petrogas Inc ($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% |
|---|
| Spartan Energy Corp ($SPE) | 65.8% | 71.3% | 69.4% | 57.4% | 54.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Granite Oil Corp ($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% |
|---|
| Spartan Energy Corp ($SPE) | 51.7% | 38.4% | 62.4% | -4.3% | 51.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oryx Petroleum Corp Ltd ($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% | 45.0% | 27.6% | 22.9% |
|---|
| Spartan Energy Corp ($SPE) | 39.7% | 26.5% | 185.8% | 52.2% | 533.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Enerplus Corp ($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% |
|---|
| Spartan Energy Corp ($SPE) | 0.8% | -1.6% | 4.9% | -14.2% | -1.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BlackPearl Resources Inc ($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 | 1.5x | 1.4x | 2.6x | 2.6x |
|---|
