Wescan Energy Corp revenue dropped on 23.5% and EBITDA Margin dropped on 22.9 pp from -4.4% to -27.3%
11.09.2020 • About Wescan Energy Corp (
$WCE) • By InTwits
Wescan Energy Corp reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -27.3%
- Wescan Energy Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -8.4%
- Wescan Energy Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 93.4%.
- CAPEX is quite volatile: 0 CADm in FY2020, 0 CADm in FY2019, 0 CADm in FY2018, 0 CADm in FY2017, 0 CADm in FY2016
- The company has unprofitable business model: ROIC is -28.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Wescan Energy Corp's Revenue dropped on 23.5%. Revenue decline showed acceleration in FY20Q4 - it was 43.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 80.7 pp from -265% to -184% in FY2020. During FY2016-FY2020 EBITDA Margin topped in FY2017 at 9.9% and was declining since that time.
SG&A as a % of Revenue surged on 13.0 pp from 31.3% to 44.3% in FY2020.
Net Income margin dropped on 194 pp from -35.3% to -229% in FY2020. Net Income margin declined at -121 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Wescan Energy Corp had CAPEX/Revenue of 0.25%. The company showed small CAPEX/Revenue decline of 1.8 pp from 2.0% in FY2017 to 0.25% in FY2020.
Return on investment
The company operates at negative ROIC (-28.3%) and ROE (-145.8%). ROIC dropped on 15.1 pp from -13.2% to -28.3% in FY2020. ROE dropped on 129 pp from -16.5% to -146% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at -9.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt decreased on 9.7% while cash dropped on 21.1%.
Wescan Energy Corp has short term refinancing risk: cash is only 60.2% of short term debt.
Financial and operational results
FY ended 31.03.2020
Wescan Energy Corp ($WCE) key annual financial indicators| mln. CAD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1.036 | 1.462 | 1.536 | 1.679 | 1.285 | -23.5% |
| SG&A | 0.368 | 0.390 | 0.517 | 0.526 | 0.570 | 8.2% |
| EBITDA | -0.294 | 0.145 | -0.014 | -0.074 | -0.350 | |
| Net Income | 3.155 | 1.602 | -0.629 | -0.592 | -2.948 | |
Balance Sheet
|
|---|
| Cash | 0.255 | 0.242 | 0.400 | 0.528 | 0.417 | -21.1% |
| Short Term Debt | 1.551 | 1.325 | 0.950 | 0.768 | 0.693 | -9.7% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.168 | 0.030 | 0.000 | 0.000 | 0.003 | |
Ratios
|
|---|
| Revenue growth | 2,291.1% | 41.1% | 5.0% | 9.4% | -23.5% | |
| EBITDA growth | -26.0% | -149.3% | -109.3% | 447.9% | 373.6% | |
|
|---|
| EBITDA Margin | -28.4% | 9.9% | -0.9% | -4.4% | -27.3% | -22.9% |
| SG&A, % of revenue | 35.5% | 26.7% | 33.6% | 31.3% | 44.3% | 13.0% |
| Net Income Margin | 304.4% | 109.6% | -40.9% | -35.3% | -229.4% | -194.1% |
| CAPEX, % of revenue | 16.2% | 2.0% | 0.0% | 0.0% | 0.3% | |
|
|---|
| ROIC | -39.2% | -9.3% | -12.4% | -13.2% | -28.3% | -15.1% |
| ROE | | 49.7% | -16.3% | -16.5% | -145.8% | -129.3% |
| Net Debt/EBITDA | | 7.5x | | | |
Wescan Energy Corp ($WCE) key quoterly financial indicators
| mln. CAD | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 0 | 0 | 0 | 0 | | -19.1% | -33.9% | 20.7% | -43.0% |
| EBITDA | -0 | -0 | -0 | -0 | | -104.9% | -122.1% | - | - |
| Net Income | -0 | -0 | -0 | -2 | | - | -3,898.1% | - | - |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 0 | 0 | | 3.9% | -27.7% | -28.9% | -21.1% |
| Short Term Debt | 1 | 0 | 1 | 1 | | -12.5% | -92.1% | -9.8% | -9.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
Ratios
|
|---|
| EBITDA Margin | -0.8% | -10.1% | -23.4% | -116.3% | | -14.5% | -40.2% | 62.7% | -87.8% |
| Net Income Margin | -31.8% | -47.8% | -53.1% | -1,204.9% | | -14.4% | -48.6% | 74.5% | -1,150.7% |
Peers in Energy
Below we provide Wescan Energy Corp benchmarking against other companies in Energy industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| KFG Resources Ltd ($KFG) | - | -17.5% | -0.5% | 4.5% | -23.7% |
| Tamarack Valley Energy Ltd ($TVE) | - | - | 31.3% | -3.0% | -30.4% |
| Arctic Hunter Energy Inc ($AHU) | - | 564.3% | 57.9% | -37.7% | -47.8% |
| Strata-X Energy Ltd ($SXE) | - | 24.6% | -67.8% | -37.2% | -81.0% |
| |
|---|
| Median (4 companies) | -19.0% | 23.9% | -0.5% | -3.0% | -39.1% |
|---|
| Wescan Energy Corp ($WCE) | - | 41.1% | 5.0% | 9.4% | -23.5% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tamarack Valley Energy Ltd ($TVE) | - | 68.4% | 72.6% | 72.9% | 62.5% |
| Arctic Hunter Energy Inc ($AHU) | -104.8% | 33.2% | 47.6% | 17.3% | 25.6% |
| Pennine Petroleum Corp ($PNN) | -19.9% | -12.7% | -20.0% | -2.9% | - |
| |
|---|
| Median (3 companies) | 31.5% | 33.2% | 47.6% | 17.3% | 44.0% |
|---|
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| KFG Resources Ltd ($KFG) | -14.1% | -19.6% | 8.4% | -3.5% | -28.6% |
| Tamarack Valley Energy Ltd ($TVE) | - | 54.6% | 72.9% | 38.5% | -115.9% |
| Arctic Hunter Energy Inc ($AHU) | -1,288.0% | -221.2% | -180.7% | -214.6% | -354.0% |
| Strata-X Energy Ltd ($SXE) | -2,196.8% | -399.1% | -1,113.2% | -31,805.9% | -19,396.4% |
| |
|---|
| Median (4 companies) | 25.6% | -221.2% | -180.7% | -214.6% | -234.9% |
|---|
| Wescan Energy Corp ($WCE) | -28.4% | 9.9% | -0.9% | -4.4% | -27.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Strata-X Energy Ltd ($SXE) | 452.6% | 48.4% | 1,075.3% | 754.1% | 3,886.6% |
| Tamarack Valley Energy Ltd ($TVE) | - | 73.9% | 66.2% | 54.0% | 44.9% |
| KFG Resources Ltd ($KFG) | 34.8% | 0.1% | 6.3% | 12.7% | 0.5% |
| Arctic Hunter Energy Inc ($AHU) | 10.7% | 9.2% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | 24.6% | 48.4% | 66.2% | 12.7% | 22.7% |
|---|
| Wescan Energy Corp ($WCE) | 16.2% | 2.0% | 0.0% | 0.0% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tamarack Valley Energy Ltd ($TVE) | - | -0.9% | 7.1% | -3.9% | -45.7% |
| Strata-X Energy Ltd ($SXE) | -24.5% | -7.7% | -13.7% | -182.7% | -128.3% |
| KFG Resources Ltd ($KFG) | -46.7% | -50.8% | -11.8% | -22.4% | -131.6% |
| Arctic Hunter Energy Inc ($AHU) | -576.3% | -119.1% | -93.7% | -92.3% | -541.5% |
| Eurogas International Inc ($EI) | - | - | - | - | - |
| |
|---|
| Median (7 companies) | -2.2% | -50.8% | -13.7% | -53.8% | -130.0% |
|---|
| Wescan Energy Corp ($WCE) | -39.2% | -9.3% | -12.4% | -13.2% | -28.3% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Tamarack Valley Energy Ltd ($TVE) | - | 1.2x | 0.6x | 1.6x | - |
| |
|---|
| Median (1 company) | 2.7x | 1.2x | -2.7x | 1.6x | - |
|---|
