Ithaca Energy Inc reports 59.5% CAPEX decline and 2.0% Revenue decline
23 Mar 2016 • About Ithaca Energy Inc (
$IAE) • By InTwits
Ithaca Energy Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ithaca Energy Inc doesn't have a profitable business model yet: 2015 ROIC is -22.0%
- The company operates at negative EBITDA Margin: -43.7%
- EBITDA Margin is quite volatile: -43.7% in 2015, -78.0% in 2014, 38.8% in 2013, 49.3% in 2012, 45.4% in 2011
- Ithaca Energy Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -10.9% for the sames years0
- Ithaca Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 97.0%. At the same time it's a lot of higher than industry average of 27.7%.
- CAPEX is quite volatile: 165 in 2015, 406 in 2014, 356 in 2013, 166 in 2012, 207 in 2011
- The company has unprofitable business model: ROIC is at -22.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 9.8x while industry average is 10.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ithaca Energy Inc ($IAE) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 129.1 | 174.4 | 426.8 | 392.6 | 384.9 | -2.0% |
| Gross Profit | 34.0 | 39.3 | 99.8 | -11.3 | 152.2 | -1,449.9% |
| SG&A | 6.0 | 5.2 | 20.9 | 13.9 | 9.9 | -28.7% |
| EBITDA | 58.7 | 86.0 | 165.6 | -306.4 | -168.3 | -45.1% |
| Net Income | 35.9 | 93.4 | 144.7 | -24.5 | -121.0 | 393.2% |
Balance Sheet
|
|---|
| Cash | 95.5 | 31.4 | 63.4 | 19.4 | 11.5 | -40.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 1.5 | 1.6 | 3.9% |
| Long Term Debt | 0.0 | 0.0 | 432.2 | 784.9 | 694.5 | -11.5% |
Cash flow
|
|---|
| Capex | 206.9 | 165.9 | 355.9 | 406.4 | 164.8 | -59.5% |
Ratios
|
|---|
| Revenue growth | -1.2% | 35.0% | 144.8% | -8.0% | -2.0% | |
| EBITDA growth | -31.6% | 46.6% | 92.4% | -285.0% | -45.1% | |
| Gross Margin | 26.3% | 22.5% | 23.4% | -2.9% | 39.5% | 42.4% |
| EBITDA Margin | 45.4% | 49.3% | 38.8% | -78.0% | -43.7% | 34.3% |
| Net Income Margin | 27.8% | 53.6% | 33.9% | -6.2% | -31.4% | -25.2% |
| SG&A, % of revenue | 4.6% | 3.0% | 4.9% | 3.5% | 2.6% | -1.0% |
| CAPEX, % of revenue | 160.2% | 95.1% | 83.4% | 103.5% | 42.8% | -60.7% |
| ROIC | 5.0% | 4.6% | 0.7% | -34.0% | -22.0% | 12.0% |
| ROE | 7.4% | 16.8% | 19.8% | -2.9% | -14.8% | -11.9% |
| Net Debt/EBITDA | -1.6x | -0.4x | 2.2x | | | 0.0x |
Revenue and profitability
The company's Revenue decreased slightly on 2.0% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 34.3 pp from -78.0% to -43.7% in 2015.
Gross Margin surged on 42.4 pp from -2.9% to 39.5% in 2015. SG&A as a % of Revenue decreased slightly on 0.97 pp from 3.5% to 2.6% in 2015.
Net Income marign dropped on 25.2 pp from -6.2% to -31.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Ithaca Energy Inc had CAPEX/Revenue of 42.8%. CAPEX/Revenue dropped on 52.3 pp from 95.1% in 2012 to 42.8% in 2015. It's average level of CAPEX/Revenue for the last three years was 76.6%.
Return on investment
The company operates at negative ROIC (-21.98%) and ROE (-14.77%). ROIC jumped on 12.0 pp from -34.0% to -22.0% in 2015. ROE dropped on 11.9 pp from -2.9% to -14.8% in 2015.
Leverage (Debt)
Debt level is 9.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt dropped on 11.5% in 2015 while cash dropped on 40.4% in 2015.
Management team
The company's CEO Leslie James Thomas is a founder and has spent 5 years at the company. The company's CFO Graham Forbes has spent 8 years at the company.
Appendix 1: Peers in Oil & Gas Producers
Below you can find Ithaca Energy Inc benchmarking vs. other companies in Oil & Gas Producers 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 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cadogan Petroleum ($CAD) | 38.9% | -46.1% | 0.3% | 764.9% | |
| Parkmead Group(The) ($PMG) | | -21.3% | 38.0% | 505.8% | -24.4% |
| Caza Oil & Gas Inc ($CAZA) | 83.1% | 21.5% | 67.0% | 178.3% | |
| Nighthawk Energy ($HAWK) | -57.5% | 75.5% | 1,533.7% | 81.8% | |
| Iofina ($IOF) | 13.4% | 17.1% | 2.9% | 29.7% | |
| |
|---|
| Median (35 companies) | 30.9% | 12.8% | 3.6% | 0.5% | -19.1% |
|---|
| Ithaca Energy Inc ($IAE) | | 35.0% | 144.8% | -8.0% | -2.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bankers Petroleum Ltd ($BNK) | 77.9% | 77.5% | 81.1% | 80.8% | 72.2% |
| Oil & Gas Development Co ($OGDC) | 66.0% | 69.9% | 70.9% | 68.5% | 62.7% |
| Nighthawk Energy ($HAWK) | 14.5% | 38.8% | 66.8% | 58.1% | |
| Tethys Petroleum Limited ($TPL) | -4.2% | 14.7% | 28.9% | 46.2% | |
| Volga Gas ($VGAS) | 45.5% | | | 42.9% | |
| |
|---|
| Median (22 companies) | 15.7% | 16.5% | 19.2% | 17.4% | 9.5% |
|---|
| Ithaca Energy Inc ($IAE) | 26.3% | 22.5% | 23.4% | -2.9% | 39.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Great Eastern Energy Corp ($GEEC) | 48.7% | 61.2% | 64.1% | 70.4% | 66.5% |
| Oil & Gas Development Co ($OGDC) | 67.6% | 73.7% | 65.9% | 69.3% | 62.4% |
| Bankers Petroleum Ltd ($BNK) | 51.4% | 53.3% | 59.4% | 68.3% | 38.5% |
| Jubilant Energy N.V. ($JUB) | -250.4% | 23.7% | 60.9% | 67.6% | 28.7% |
| Nighthawk Energy ($HAWK) | -358.5% | -80.7% | 72.2% | 57.7% | |
| |
|---|
| Median (36 companies) | 9.3% | 16.2% | 17.4% | 18.2% | 21.8% |
|---|
| Ithaca Energy Inc ($IAE) | 45.4% | 49.3% | 38.8% | -78.0% | -43.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($JUB) | 301.5% | 322.7% | 481.7% | 208.5% | 5.9% |
| Caza Oil & Gas Inc ($CAZA) | 430.1% | 249.9% | 352.9% | 177.4% | |
| Tethys Petroleum Limited ($TPL) | 182.8% | 52.0% | 64.4% | 95.2% | |
| Ruspetro ($RPO) | 83.5% | 139.8% | 55.2% | 77.2% | |
| Zoltav Resources Inc ($ZOL) | | | | 65.8% | |
| |
|---|
| Median (37 companies) | 13.9% | 17.5% | 21.1% | 15.9% | 16.8% |
|---|
| Ithaca Energy Inc ($IAE) | 160.2% | 95.1% | 83.4% | 103.5% | 42.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oil & Gas Development Co ($OGDC) | 41.2% | 46.7% | 40.4% | 39.7% | 24.3% |
| Haike Chemical Group Ltd ($HAIK) | 7.7% | 0.7% | 1.0% | 31.4% | |
| Nighthawk Energy ($HAWK) | -5.1% | -3.9% | 19.6% | 23.1% | |
| Novatek OAO ($NVTK) | 47.4% | 21.7% | 29.0% | 21.2% | 19.4% |
| Bankers Petroleum Ltd ($BNK) | 19.7% | 17.4% | 20.8% | 20.8% | -0.2% |
| |
|---|
| Median (38 companies) | 7.7% | 7.1% | 7.0% | 5.7% | 2.5% |
|---|
| Ithaca Energy Inc ($IAE) | 5.0% | 4.6% | 0.7% | -34.0% | -22.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jubilant Energy N.V. ($JUB) | | 77.9x | 38.8x | 44.6x | 192.7x |
| Ruspetro ($RPO) | | 369.1x | 34.8x | 27.9x | |
| Bg Group ($BG.) | 1.2x | 1.3x | 1.7x | 11.7x | 1.5x |
| President Energy ($PPC) | | | | 9.9x | |
| Edge Resources Inc ($EDG) | | | | 8.0x | 7.6x |
| |
|---|
| Median (28 companies) | 0.5x | 0.5x | 0.7x | 1.3x | 1.9x |
|---|
