Range Resources CAPEX dropped on 93.0% in 2016 and Revenue dropped on 46.3%
03 Oct 2016 • About Range Resources (
$RRL) • By InTwits
Range Resources reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Range Resources doesn't have a profitable business model yet: FY2016 ROIC is -28.1%
- The company operates at negative EBITDA Margin: -446.5%
- Range Resources motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -113.5% for the sames years0
- Range Resources has high CAPEX intensity: 5 year average CAPEX/Revenue was 45.2%. At the same time it's a lot of higher than industry average of 22.1%.
- CAPEX is quite volatile: 0.40 in FY2016, 5.7 in FY2015, 4.7 in FY2014, 12.3 in FY2013, 26.9 in FY2012
- The company has unprofitable business model: ROIC is at -28.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Range Resources ($RRL) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 24.998 | 26.074 | 21.186 | 13.153 | 7.062 | -46.3% |
| Gross Profit | -1.305 | 4.471 | -3.627 | -2.859 | -7.800 | 172.8% |
| SG&A | 0.524 | 13.340 | 14.424 | 9.947 | 3.400 | -65.8% |
| EBITDA | -19.953 | -5.916 | -35.569 | -12.003 | -31.531 | 162.7% |
| Net Income | -31.095 | -20.304 | -102.542 | -30.279 | -43.875 | 44.9% |
Balance Sheet
|
|---|
| Cash | 10.579 | 1.732 | 2.977 | 10.530 | 13.001 | 23.5% |
| Short Term Debt | 0.000 | 11.026 | 0.000 | 7.518 | 1.556 | -79.3% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 26.885 | 12.261 | 4.688 | 5.714 | 0.401 | -93.0% |
Ratios
|
|---|
| Revenue growth | 721.3% | 4.3% | -18.7% | -37.9% | -46.3% | |
| EBITDA growth | 39.5% | -70.3% | 501.2% | -66.3% | 162.7% | |
| Gross Margin | -5.2% | 17.1% | -17.1% | -21.7% | -110.4% | -88.7% |
| EBITDA Margin | -79.8% | -22.7% | -167.9% | -91.3% | -446.5% | -355.2% |
| Net Income Margin | -124.4% | -77.9% | -484.0% | -230.2% | -621.3% | -391.1% |
| SG&A, % of revenue | 2.1% | 51.2% | 68.1% | 75.6% | 48.1% | -27.5% |
| CAPEX, % of revenue | 107.5% | 47.0% | 22.1% | 43.4% | 5.7% | -37.8% |
| ROIC | -14.3% | -6.5% | -22.7% | -11.2% | -28.1% | -16.9% |
| ROE | -17.1% | -12.1% | -72.8% | -29.6% | -52.5% | -22.8% |
Revenue and profitability
Range Resources's Revenue dropped on 46.3% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 45.7 pp from -71.9% to -26.2% in FY2016.
Gross Margin dropped on 88.7 pp from -21.7% to -110% in FY2016. SG&A as a % of Revenue dropped on 27.5 pp from 75.6% to 48.1% in FY2016.
Net Income marign dropped on 391 pp from -230% to -621% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Range Resources had CAPEX/Revenue of 5.7%. The company showed big decline in CAPEX/Revenue of 41.3 pp from 47.0% in FY2013 to 5.7% in FY2016. Average CAPEX/Revenue for the last three years was 23.8%.
Return on investment
The company operates at negative ROIC (-28.09%) and ROE (-52.46%). ROIC dropped on 16.9 pp from -11.2% to -28.1% in FY2016. ROE dropped on 22.8 pp from -29.6% to -52.5% in FY2016.
Leverage (Debt)
Debt level is -2.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt dropped on 79.3% in FY2016 while cash jumped on 23.5% in FY2016.
Appendix 1: Peers in Oil & Gas Producers
Below you can find Range Resources 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 | 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 ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 12.5% | 3.6% | 0.5% | -19.5% | -22.0% |
|---|
| Range Resources ($RRL) | | 4.3% | -18.7% | -37.9% | -46.3% |
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 ($OGDC) | 69.9% | 70.9% | 68.5% | 62.7% | 54.0% |
| Nighthawk Energy ($HAWK) | 38.8% | 66.8% | 58.1% | 49.8% | |
| Caza Oil & Gas Inc ($CAZA) | 0.1% | 30.5% | 40.8% | 44.8% | |
| |
|---|
| Median (23 companies) | 18.3% | 21.7% | 17.4% | 12.6% | 54.0% |
|---|
| Range Resources ($RRL) | -5.2% | 17.1% | -17.1% | -21.7% | -110.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Great Eastern Energy Corp ($GEEC) | 61.2% | 64.1% | 70.4% | 66.5% | 50.0% |
| Oil & Gas Development Co ($OGDC) | 73.7% | 65.9% | 69.3% | 62.4% | 55.0% |
| Serica Energy ($SQZ) | | | | 61.3% | |
| Circle Oil ($COP) | 53.5% | 54.8% | 51.1% | 53.0% | |
| Caza Oil & Gas Inc ($CAZA) | -50.7% | -3.0% | 47.7% | 49.8% | |
| |
|---|
| Median (39 companies) | 17.2% | 20.6% | 16.5% | 21.8% | 52.5% |
|---|
| Range Resources ($RRL) | -79.8% | -22.7% | -167.9% | -91.3% | -446.5% |
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 ($VGAS) | | | 14.0% | 45.5% | |
| |
|---|
| Median (39 companies) | 17.5% | 21.1% | 15.8% | 15.5% | 14.1% |
|---|
| Range Resources ($RRL) | 107.5% | 47.0% | 22.1% | 43.4% | 5.7% |
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% | 14.1% |
| AO Tatneft ($ATAD) | 19.2% | 19.1% | 17.8% | 19.7% | |
| Novatek OAO ($NVTK) | 21.7% | 29.0% | 21.2% | 19.4% | |
| Serica Energy ($SQZ) | -6.2% | -5.1% | -5.5% | 19.4% | |
| |
|---|
| Median (39 companies) | 5.8% | 6.4% | 5.3% | 1.8% | 10.1% |
|---|
| Range Resources ($RRL) | -14.3% | -6.5% | -22.7% | -11.2% | -28.1% |
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 (31 companies) | 0.5x | 0.7x | 1.3x | 1.5x | 3.1x |
|---|
