Great Eastern Energy Corp reports 123% Net Income decline and 16.5 pp EBITDA Margin decline from 66.5% to 50.0%
25 Jul 2016 • About Great Eastern Energy Corp (
$GEEC) • By InTwits
Great Eastern Energy Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Great Eastern Energy Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 73.0%. At the same time it's a lot of higher than industry average of 23.3%.
- CAPEX is quite volatile: 0.63 in FY2016, 5.6 in FY2015, 21.4 in FY2014, 31.5 in FY2013, 41.2 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Great Eastern Energy Corp ($GEEC) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 23.366 | 29.137 | 33.793 | 37.314 | 29.363 | -21.3% |
| SG&A | | | 0.197 | 0.184 | 0.194 | 5.9% |
| EBITDA | 14.297 | 18.686 | 23.798 | 24.802 | 14.671 | -40.8% |
| Net Income | -2.749 | 7.420 | 10.196 | 11.350 | -2.622 | -123.1% |
Balance Sheet
|
|---|
| Cash | 3.036 | 4.244 | 0.508 | 0.768 | 0.132 | -82.8% |
| Short Term Debt | 10.524 | 18.467 | 14.192 | 21.645 | 19.602 | -9.4% |
| Long Term Debt | 78.616 | 90.326 | 99.554 | 73.408 | 73.698 | 0.4% |
Cash flow
|
|---|
| Capex | 41.179 | 31.543 | 21.424 | 5.577 | 0.634 | -88.6% |
Ratios
|
|---|
| Revenue growth | 73.9% | 24.7% | 16.0% | 10.4% | -21.3% | |
| EBITDA growth | 118.6% | 30.7% | 27.4% | 4.2% | -40.8% | |
| EBITDA Margin | 61.2% | 64.1% | 70.4% | 66.5% | 50.0% | -16.5% |
| Net Income Margin | -11.8% | 25.5% | 30.2% | 30.4% | -8.9% | -39.3% |
| SG&A, % of revenue | | | 0.6% | 0.5% | 0.7% | 0.2% |
| CAPEX, % of revenue | 176.2% | 108.3% | 63.4% | 14.9% | 2.2% | -12.8% |
| ROIC | 7.1% | 8.9% | 10.7% | 11.2% | 6.0% | -5.2% |
| ROE | -3.7% | 9.8% | 12.9% | 13.5% | -3.1% | -16.6% |
| Net Debt/EBITDA | 6.0x | 5.6x | 4.8x | 3.8x | 6.4x | 2.5x |
Revenue and profitability
Great Eastern Energy Corp's Revenue dropped on 21.3% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 7.2% to 8.1% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign dropped on 39.3 pp from 30.4% to -8.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Great Eastern Energy Corp had CAPEX/Revenue of 2.2%. The company showed big decline in CAPEX/Revenue of 106 pp from 108% in FY2013 to 2.2% in FY2016. It's average CAPEX/Revenue for the last three years was 26.8%.
Return on investment
The company operates at low but positive ROIC (6.01%) and negative ROE (-3.11%). ROIC decreased on 5.2 pp from 11.2% to 6.0% in FY2016. ROE dropped on 16.6 pp from 13.5% to -3.1% in FY2016.
Leverage (Debt)
Debt level is 6.4x Net Debt / EBITDA and 6.4x Debt / EBITDA. Net Debt / EBITDA jumped on 2.5x from 3.8x to 6.4x in FY2016. Debt decreased slightly on 1.8% in FY2016 while cash dropped on 82.8% in FY2016.
Appendix 1: Peers in Oil & Gas Producers
Below we provide Great Eastern Energy Corp benchmarking against other companies in Oil & Gas Producers 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 |
|---|
| Cadogan Petroleum ($CAD) | -46.1% | 0.3% | 764.9% | 131.2% | |
| Eland Oil & Gas ($ELA) | | | | 54.8% | |
| Zoltav Resources Inc ($ZOL) | | | | 40.6% | |
| Novatek OAO ($NVTK) | 19.8% | 41.3% | 20.0% | 32.9% | |
| AO Tatneft ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 12.8% | 3.6% | -0.8% | -20.1% | |
|---|
| Great Eastern Energy Corp ($GEEC) | | 24.7% | 16.0% | 10.4% | -21.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bankers Petroleum Ltd ($BNK) | 77.5% | 81.1% | 80.8% | 72.2% | |
| Serica Energy ($SQZ) | | | | 67.0% | |
| Oil & Gas Development Co ($OGDC) | 69.9% | 70.9% | 68.5% | 62.7% | |
| Nighthawk Energy ($HAWK) | 38.8% | 66.8% | 58.1% | 49.8% | |
| Caza Oil & Gas Inc ($CAZA) | 0.1% | 30.5% | 40.8% | 44.8% | |
| |
|---|
| Median (24 companies) | 17.7% | 20.0% | 15.1% | 12.1% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oil & Gas Development Co ($OGDC) | 73.7% | 65.9% | 69.3% | 62.4% | |
| Serica Energy ($SQZ) | | | | 61.3% | |
| Circle Oil ($COP) | 53.5% | 54.8% | 51.1% | 53.0% | |
| Caza Oil & Gas Inc ($CAZA) | -50.7% | -3.0% | 47.7% | 49.8% | |
| Nighthawk Energy ($HAWK) | -80.7% | 72.2% | 57.7% | 48.9% | |
| |
|---|
| Median (39 companies) | 16.2% | 17.4% | 15.3% | 15.8% | |
|---|
| Great Eastern Energy Corp ($GEEC) | 61.2% | 64.1% | 70.4% | 66.5% | 50.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| President Energy ($PPC) | 51.5% | 24.6% | 10.4% | 142.7% | |
| Ruspetro ($RPO) | 139.8% | 55.2% | 77.2% | 80.3% | |
| Parkmead Group(The) ($PMG) | 6.4% | 85.4% | 39.8% | 67.4% | |
| Bankers Petroleum Ltd ($BNK) | 64.1% | 50.0% | 58.7% | 47.3% | |
| Volga Gas ($VGAS) | | | 14.0% | 45.5% | |
| |
|---|
| Median (39 companies) | 17.5% | 21.1% | 15.8% | 16.5% | |
|---|
| Great Eastern Energy Corp ($GEEC) | 176.2% | 108.3% | 63.4% | 14.9% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 13.6% | 5.8% | 5.3% | 25.4% | |
| Oil & Gas Development Co ($OGDC) | 46.7% | 40.4% | 39.7% | 24.3% | |
| AO Tatneft ($ATAD) | 19.2% | 19.1% | 17.8% | 19.7% | |
| Novatek OAO ($NVTK) | 21.7% | 29.0% | 21.2% | 19.4% | |
| Serica Energy ($SQZ) | -6.2% | -5.1% | -5.5% | 19.4% | |
| |
|---|
| Median (39 companies) | 4.2% | 4.1% | 5.2% | 0.8% | |
|---|
| Great Eastern Energy Corp ($GEEC) | 7.1% | 8.9% | 10.7% | 11.2% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Energy N.V. ($JUB) | 77.9x | 38.8x | 44.6x | 192.7x | |
| Ruspetro ($RPO) | 369.1x | 34.8x | 27.9x | 116.8x | |
| Iofina ($IOF) | -5,718.9x | | | 32.8x | |
| Edge Resources Inc ($EDG) | | | 8.0x | 7.6x | |
| BP ($BP.A) | 1.1x | 0.6x | 1.3x | 4.0x | |
| |
|---|
| Median (30 companies) | 0.4x | 0.7x | 1.3x | 1.5x | |
|---|
| Great Eastern Energy Corp ($GEEC) | 6.0x | 5.6x | 4.8x | 3.8x | 6.4x |
