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Orbit Garant Drilling Inc Debt surged on 39.8% and Net Debt / EBITDA surged on 1.1x from 3.0x to 4.1x

28.09.2020 • About Orbit Garant Drilling Inc ($OGD) • By InTwits

Orbit Garant Drilling Inc reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 6.4% in FY2020, 5.9% in FY2019, 8.5% in FY2018, 2.2% in FY2017, 10.3% in FY2016
  • Orbit Garant Drilling Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.1%. At the same time it's a lot of higher than industry average of 5.4%.
  • CAPEX is quite volatile: 2 CADm in FY2020, 7 CADm in FY2019, 1 CADm in FY2018, 15 CADm in FY2017, 36 CADm in FY2016
  • The company has unprofitable business model: ROIC is -2.4%
  • It operates with high leverage: Net Debt/EBITDA is 4.1x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Orbit Garant Drilling Inc's Revenue decreased on 9.8%. Revenue decline showed acceleration in FY20Q4 - it was 54.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 6.6% to 5.0% in FY2020.

Gross Margin decreased slightly on 1.3 pp from 10.7% to 9.4% in FY2020. SG&A as a % of Revenue decreased slightly on 0.64 pp from 10.5% to 9.9% in FY2020.

Net Income margin decreased on 3.1 pp from -2.3% to -5.3% in FY2020.

Investments (CAPEX, working capital and M&A)


Orbit Garant Drilling Inc's CAPEX/Revenue was 7.6% in FY2020. CAPEX/Revenue increased slightly on 1.4 pp from 6.2% in FY2017 to 7.6% in FY2020. For the last three years the average CAPEX/Revenue was 6.0%. The company has spent a lot to CAPEX (119% of EBITDA) which didn't stop revenue from falling.

Return on investment


The company operates at negative ROIC (-2.4%) and ROE (-10.2%). ROIC decreased slightly on 1.4 pp from -1.0% to -2.4% in FY2020. ROE decreased on 5.7 pp from -4.5% to -10.2% in FY2020.

Leverage (Debt)


Debt level is 4.1x Net Debt / EBITDA and 4.7x Debt / EBITDA. Net Debt / EBITDA jumped on 1.1x from 3.0x to 4.1x in FY2020. Debt jumped on 39.8% while cash jumped on 101%.

Orbit Garant Drilling Inc has no short term refinancing risk: cash is higher than short term debt (101.3%).

Financial and operational results


FY ended 30.06.2020

Orbit Garant Drilling Inc ($OGD) key annual financial indicators

mln. CAD201620172018201920202020/2019
P&L
Revenue107.5125.2173.1152.8137.8-9.8%
Gross Profit10.28.021.516.312.9-20.5%
SG&A14.314.715.816.113.6-15.3%
EBITDA11.12.714.79.08.8-2.2%
Net Income-0.2-5.94.5-3.5-7.4
Balance Sheet
Cash2.31.64.62.55.0101.5%
Short Term Debt0.914.90.81.44.9252.4%
Long Term Debt8.42.119.228.236.429.2%
Cash flow
Capex6.67.88.68.310.525.8%
Ratios
Revenue growth36.2%16.4%38.3%-11.7%-9.8%
EBITDA growth533.7%-75.6%443.3%-38.9%-2.2%

Gross Margin9.5%6.4%12.4%10.7%9.4%-1.3%
EBITDA Margin10.3%2.2%8.5%5.9%6.4%0.5%
SG&A, % of revenue13.3%11.8%9.1%10.5%9.9%-0.6%
Net Income Margin-0.2%-4.7%2.6%-2.3%-5.3%-3.1%
CAPEX, % of revenue6.1%6.2%5.0%5.4%7.6%2.2%

ROIC0.3%-7.8%6.4%-1.0%-2.4%-1.4%
ROE-0.3%-7.7%5.9%-4.5%-10.2%-5.7%
Net Debt/EBITDA0.6x5.7x1.0x3.0x4.1x1.1x

Orbit Garant Drilling Inc ($OGD) key quoterly financial indicators

mln. CADFY20Q1FY20Q2FY20Q3FY20Q4 YoY change
P&L
Revenue43383620 16.1%13.6%-3.8%-54.4%
EBITDA5102 52.0%116.8%-93.7%-34.5%
Net Income1-2-3-3 206.4%---
Balance Sheet
Cash4125 -11.6%-28.6%-30.4%101.5%
Short Term Debt2555 176.1%692.6%297.6%252.4%
Long Term Debt35373836 66.8%31.7%35.3%29.2%
Ratios
Gross Margin16.0%6.3%3.5%11.5% 1.1%-2.4%-4.7%0.9%
EBITDA Margin 12.1% 2.8% 0.3% 11.7% 2.9%1.3%-4.0%3.6%
Net Income Margin 2.5% -6.2% -9.4% -13.5% 1.6%-1.3%-5.6%-11.7%

Peers in Basic Materials


Below we provide Orbit Garant Drilling Inc benchmarking against other companies in Basic Materials 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 FY2016 FY2017 FY2018 FY2019 FY2020
Archon Minerals Ltd ($ACS)----13.3%127.6%
Monument Mining Ltd ($MMY)--33.4%22.5%9.1%42.8%
Rochester Resources Ltd ($RCT)-0.0%16.7%-19.2%13.2%
Graphene 3D Lab Inc ($GGG)-43.6%-21.2%8.3%-1.3%
Monarques Gold Corp ($MQR)---5.1%-78.9%
 
Median (5 companies)6.2%-16.7%6.5%-4.1%13.2%
Orbit Garant Drilling Inc ($OGD)-16.4%38.3%-11.7%-9.8%


Top companies by Gross margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Monarques Gold Corp ($MQR)--4.8%13.7%61.8%
Monument Mining Ltd ($MMY)23.4%23.7%42.3%43.9%43.2%
Graphene 3D Lab Inc ($GGG)23.4%43.5%67.9%62.6%21.9%
Rochester Resources Ltd ($RCT)-43.8%2.3%15.9%-18.2%1.4%
 
Median (4 companies)23.4%23.7%29.1%28.8%32.6%
Orbit Garant Drilling Inc ($OGD)9.5%6.4%12.4%10.7%9.4%


Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Archon Minerals Ltd ($ACS)---28.3%-12.1%63.2%
Monument Mining Ltd ($MMY)26.6%-10.7%17.9%33.8%33.6%
Rochester Resources Ltd ($RCT)-148.8%-13.5%-32.9%-31.9%-10.3%
Monarques Gold Corp ($MQR)----3.3%-49.0%
Graphene 3D Lab Inc ($GGG)-273.9%-80.7%-106.2%-52.5%-87.7%
 
Median (5 companies)22.6%-47.1%-32.9%-22.0%-10.3%
Orbit Garant Drilling Inc ($OGD)10.3%2.2%8.5%5.9%6.4%


Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Monarques Gold Corp ($MQR)--20.8%29.9%43.9%
Monument Mining Ltd ($MMY)43.3%46.0%35.1%37.2%18.3%
Rochester Resources Ltd ($RCT)5.0%4.3%2.8%3.8%2.9%
Archon Minerals Ltd ($ACS)--0.0%0.0%0.0%
Graphene 3D Lab Inc ($GGG)8.3%0.8%7.8%1.8%0.0%
 
Median (5 companies)17.9%25.2%14.3%16.9%2.9%
Orbit Garant Drilling Inc ($OGD)6.1%6.2%5.0%5.4%7.6%


Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Archon Minerals Ltd ($ACS)-111.6%-20.4%-3.5%-1.2%13.7%
Monument Mining Ltd ($MMY)1.0%-2.6%-0.4%1.2%2.0%
Teras Resources Inc ($TRA)-2.9%-3.4%-3.3%-3.9%-3.1%
Cadillac Ventures Inc ($CDC)-2.9%-3.6%-2.5%-2.5%-3.6%
Lion One Metals Ltd ($LIO)-4.1%-4.5%-3.6%-3.4%-4.0%
 
Median (32 companies)1.3%-27.8%-33.8%-35.1%-21.4%
Orbit Garant Drilling Inc ($OGD)0.3%-7.8%6.4%-1.0%-2.4%


Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Archon Minerals Ltd ($ACS)----7.6x
Monument Mining Ltd ($MMY)-3.3x--4.4x-1.3x-1.0x
 
Median (2 companies)0.6x--4.4x-1.3x3.3x
Orbit Garant Drilling Inc ($OGD)0.6x5.7x1.0x3.0x4.1x