Thermal Energy International Inc reports 2,412% EBITDA decline in 2020 while 1.6% Revenue growth
23.09.2020 • About Thermal Energy International Inc (
$TMG) • By InTwits
Thermal Energy International Inc reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: -6.5% in FY2020 vs. 0.3% in FY2019 vs. 3.0% in FY2016
- EBITDA Margin is quite volatile: -6.5% in FY2020, 0.3% in FY2019, 3.1% in FY2018, 4.7% in FY2017, 3.0% in FY2016
- Thermal Energy International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has unprofitable business model: ROIC is -29.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Thermal Energy International Inc's Revenue increased slightly on 1.6%. Revenue growth showed slowdown in FY20Q4 - it was -53.3% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.8 pp from 0.29% to -6.5% in FY2020. During FY2016-FY2020 EBITDA Margin topped in FY2017 at 4.7% and was declining since that time.
Gross Margin decreased slightly on 2.0 pp from 43.8% to 41.8% in FY2020. Gross Margin stuck to a declining trend at -3.9 pp per annum in FY2016-FY2020. SG&A as a % of Revenue decreased on 8.1 pp from 44.8% to 36.6% in FY2020. SG&A as a % of Revenue stuck to a declining trend at -3.7 pp per annum in FY2016-FY2020.
Net Income margin decreased on 6.9 pp from -2.0% to -8.9% in FY2020. During the last 5 years Net Income margin topped in FY2018 at 3.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.3%. The company showed small growth in CAPEX/Revenue of 1.0 pp from 0.29% in FY2017 to 1.3% in FY2020. It's average CAPEX/Revenue for the last three years was 0.65%. During FY2016-FY2020 CAPEX as a % of Revenue bottomed in FY2018 at 0.28% and was growing since that time.
Return on investment
The company operates at negative ROIC (-29.8%) and ROE (-62.5%). ROIC dropped on 24.9 pp from -4.9% to -29.8% in FY2020. ROE dropped on 52.0 pp from -10.4% to -62.5% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 17.0% and was declining since that time. During the last 5 years ROE topped in FY2018 at 16.6% and was declining since that time.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and Debt / EBITDA. Debt increased on 9.7% while cash surged on 14.3%.
Thermal Energy International Inc has no short term refinancing risk: cash is higher than short term debt (1,272.7%).
Financial and operational results
FY ended 31.05.2020
Thermal Energy International Inc ($TMG) key annual financial indicators| mln. CAD | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 12.402 | 13.192 | 17.408 | 21.083 | 21.416 | 1.6% |
| Gross Profit | 6.794 | 7.439 | 8.334 | 9.233 | 8.954 | -3.0% |
| SG&A | 6.421 | 6.790 | 7.732 | 9.439 | 7.848 | -16.9% |
| EBITDA | 0.369 | 0.619 | 0.533 | 0.061 | -1.402 | -2,411.9% |
| Net Income | 0.254 | 0.415 | 0.639 | -0.424 | -1.898 | |
Balance Sheet
|
|---|
| Cash | 1.143 | 2.950 | 3.282 | 4.177 | 4.775 | 14.3% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.372 | 0.375 | 0.9% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 2.634 | 2.922 | 10.9% |
Cash flow
|
|---|
| Capex | 0.057 | 0.038 | 0.050 | 0.073 | 0.281 | 281.7% |
Ratios
|
|---|
| Revenue growth | 82.4% | 6.4% | 32.0% | 21.1% | 1.6% | |
| EBITDA growth | -115.8% | 67.6% | -13.9% | -88.6% | -2,411.9% | |
|
|---|
| Gross Margin | 54.8% | 56.4% | 47.9% | 43.8% | 41.8% | -2.0% |
| EBITDA Margin | 3.0% | 4.7% | 3.1% | 0.3% | -6.5% | -6.8% |
| SG&A, % of revenue | 51.8% | 51.5% | 44.4% | 44.8% | 36.6% | -8.1% |
| Net Income Margin | 2.0% | 3.1% | 3.7% | -2.0% | -8.9% | -6.9% |
| CAPEX, % of revenue | 0.5% | 0.3% | 0.3% | 0.3% | 1.3% | 1.0% |
|
|---|
| ROIC | 11.2% | 17.0% | 12.7% | -4.9% | -29.8% | -24.9% |
| ROE | 8.7% | 12.5% | 16.6% | -10.4% | -62.5% | -52.0% |
| Net Debt/EBITDA | -3.1x | -4.8x | -6.2x | -19.3x | |
Thermal Energy International Inc ($TMG) key quoterly financial indicators
| mln. CAD | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 8 | 6 | 3 | | -27.0% | 51.1% | 86.6% | -53.3% |
| EBITDA | 0 | 1 | 1 | -3 | | - | - | - | -411.4% |
| Net Income | 0 | 0 | 0 | -3 | | - | - | - | -568.2% |
Balance Sheet
|
|---|
| Cash | 6 | 5 | 4 | 5 | | 148.4% | 125.2% | 0.9% | 14.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | 653.2% | 154.9% | -85.4% | 0.9% |
| Long Term Debt | 3 | 3 | 3 | 3 | | -8.3% | 3.1% | - | 10.9% |
Ratios
|
|---|
| Gross Margin | 44.1% | 37.2% | 41.6% | 55.2% | | 11.6% | 1.9% | -4.9% | -2.9% |
| EBITDA Margin | 8.4% | 7.8% | 11.3% | -110.7% | | 9.3% | 9.3% | 36.8% | -127.2% |
| Net Income Margin | 5.0% | 4.7% | 7.5% | -105.8% | | 5.8% | 6.8% | 36.2% | -116.3% |
Peers in Industrial
Below you can find Thermal Energy International Inc benchmarking vs. other companies in Industrial industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Radient Technologies Inc ($RTI) | - | -53.2% | 55.3% | -53.0% | 8,497.8% |
| H2O Innovation Inc ($HEO) | - | 63.3% | 20.4% | 18.4% | 13.3% |
| Cielo Waste Solutions Corp ($CMC) | - | - | - | - | 0.0% |
| |
|---|
| Median (3 companies) | 2.9% | 5.1% | 37.9% | -17.3% | 13.3% |
|---|
| Thermal Energy International Inc ($TMG) | - | 6.4% | 32.0% | 21.1% | 1.6% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| H2O Innovation Inc ($HEO) | 30.7% | 23.1% | 22.2% | 23.0% | 26.9% |
| Radient Technologies Inc ($RTI) | 45.7% | 39.0% | 42.8% | 38.7% | 2.4% |
| Cielo Waste Solutions Corp ($CMC) | - | - | - | 0.0% | 0.0% |
| |
|---|
| Median (3 companies) | 22.9% | 31.1% | 32.5% | 23.0% | 2.4% |
|---|
| Thermal Energy International Inc ($TMG) | 54.8% | 56.4% | 47.9% | 43.8% | 41.8% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Clean Seed Capital Group Ltd ($CSX) | -103.4% | - | - | - | 70.0% |
| H2O Innovation Inc ($HEO) | 6.5% | 1.4% | 3.4% | 5.5% | 3.4% |
| Radient Technologies Inc ($RTI) | -573.5% | -1,328.0% | -1,614.1% | -7,992.3% | -119.7% |
| Cielo Waste Solutions Corp ($CMC) | - | - | - | -75,804.5% | -142,513.9% |
| |
|---|
| Median (4 companies) | 10.1% | -663.3% | -805.4% | -7,992.3% | -58.2% |
|---|
| Thermal Energy International Inc ($TMG) | 3.0% | 4.7% | 3.1% | 0.3% | -6.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cielo Waste Solutions Corp ($CMC) | - | - | - | 212,333.1% | 169,789.6% |
| Radient Technologies Inc ($RTI) | 2.7% | 2.2% | 274.8% | 5,744.2% | 60.1% |
| H2O Innovation Inc ($HEO) | 2.2% | 1.6% | 1.7% | 1.8% | 0.7% |
| Clean Seed Capital Group Ltd ($CSX) | 12.1% | - | - | - | 0.5% |
| |
|---|
| Median (4 companies) | 3.9% | 1.9% | 138.3% | 5,744.2% | 30.4% |
|---|
| Thermal Energy International Inc ($TMG) | 0.5% | 0.3% | 0.3% | 0.3% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Clean Seed Capital Group Ltd ($CSX) | -17.2% | -24.3% | -78.1% | -50.5% | 28.0% |
| H2O Innovation Inc ($HEO) | 5.3% | -7.6% | -1.0% | 1.8% | -3.2% |
| Cielo Waste Solutions Corp ($CMC) | - | -34.7% | -73.9% | -41.6% | -43.3% |
| Radient Technologies Inc ($RTI) | - | -402.1% | -45.9% | -43.0% | -53.0% |
| Organic Potash Corp ($OPC) | - | - | - | - | - |
| |
|---|
| Median (5 companies) | 8.1% | -29.5% | -59.9% | -42.3% | -23.3% |
|---|
| Thermal Energy International Inc ($TMG) | 11.2% | 17.0% | 12.7% | -4.9% | -29.8% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| H2O Innovation Inc ($HEO) | 1.9x | 11.2x | 5.2x | 1.5x | 4.3x |
| Clean Seed Capital Group Ltd ($CSX) | - | - | - | - | -0.1x |
| |
|---|
| Median (2 companies) | 1.8x | 11.2x | 2.7x | 1.5x | 2.1x |
|---|
