Ithaca Energy Inc reports 106 pp EBITDA Margin growth from -43.7% to 62.2% in 2016 while 42.2% Revenue decline
23 Mar 2017 • About Ithaca Energy Inc (
$IAE) • By InTwits
Ithaca Energy Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 62.2% in 2016, -43.7% in 2015, -78.0% in 2014, 38.8% in 2013, 49.3% in 2012
- Ithaca Energy Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -5.3% for the sames years0
- Ithaca Energy Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 73.3%. At the same time it's a lot of higher than industry average of 20.4%.
- CAPEX is quite volatile: 92.6 in 2016, 165 in 2015, 406 in 2014, 356 in 2013, 166 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ithaca Energy Inc ($IAE) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 174.4 | 426.8 | 392.6 | 384.9 | 222.6 | -42.2% |
| Gross Profit | 39.3 | 99.8 | -11.3 | 152.2 | 76.6 | -49.7% |
| SG&A | 5.2 | 20.9 | 13.9 | 9.9 | 5.4 | -45.8% |
| EBITDA | 86.0 | 165.6 | -306.4 | -168.3 | 138.4 | -182.2% |
| Net Income | 93.4 | 144.7 | -24.5 | -121.0 | -53.8 | -55.5% |
Balance Sheet
|
|---|
| Cash | 31.4 | 63.4 | 19.4 | 11.5 | 27.2 | 135.6% |
| Short Term Debt | 0.0 | 0.0 | 1.5 | 1.6 | 1.7 | 3.0% |
| Long Term Debt | 0.0 | 432.2 | 784.9 | 694.5 | 645.3 | -7.1% |
Cash flow
|
|---|
| Capex | 165.9 | 355.9 | 406.4 | 164.8 | 92.6 | -43.8% |
Ratios
|
|---|
| Revenue growth | 35.0% | 144.8% | -8.0% | -2.0% | -42.2% | |
| EBITDA growth | 46.6% | 92.4% | -285.0% | -45.1% | -182.2% | |
| Gross Margin | 22.5% | 23.4% | -2.9% | 39.5% | 34.4% | -5.1% |
| EBITDA Margin | 49.3% | 38.8% | -78.0% | -43.7% | 62.2% | 105.9% |
| Net Income Margin | 53.6% | 33.9% | -6.2% | -31.4% | -24.2% | 7.3% |
| SG&A, % of revenue | 3.0% | 4.9% | 3.5% | 2.6% | 2.4% | -0.2% |
| CAPEX, % of revenue | 95.1% | 83.4% | 103.5% | 42.8% | 41.6% | -1.2% |
| ROIC | 4.6% | 0.7% | -34.0% | -22.0% | 6.3% | 28.3% |
| ROE | 16.8% | 19.8% | -2.9% | -14.8% | -7.0% | 7.8% |
| Net Debt/EBITDA | -0.4x | 2.2x | | | 4.5x | 4.5x |
Revenue and profitability
The company's Revenue dropped on 42.2% in 2016. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 106 pp from -43.7% to 62.2% in 2016.
Gross Margin decreased on 5.1 pp from 39.5% to 34.4% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 7.3 pp from -31.4% to -24.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
Ithaca Energy Inc's CAPEX/Revenue was 41.6% in 2016. The company's CAPEX/Revenue dropped on 41.8 pp from 83.4% in 2013 to 41.6% in 2016. It's average level of CAPEX/Revenue for the last three years was 62.6%.Battling declining revenue the company invested a large share of EBITDA (66.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (6.34%) and negative ROE (-7.00%). ROIC surged on 28.3 pp from -22.0% to 6.3% in 2016. ROE increased on 7.8 pp from -14.8% to -7.0% in 2016.
Leverage (Debt)
Debt level is 4.5x Net Debt / EBITDA and 4.7x Debt / EBITDA. Net Debt / EBITDA surged4.5x from to 4.5x in 2016. Debt decreased on 7.1% in 2016 while cash surged on 136% in 2016.
Management team
Leslie James Thomas is a the company's CEO. Leslie James Thomas is a founder and has spent 5 years at the company. Ithaca Energy Inc's CFO Graham Forbes has spent 8 years at the company.
Appendix 1: Peers in Oil & Gas Producers
Below we provide Ithaca Energy Inc 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) | | 41.3% | 20.0% | 32.9% | 13.1% |
| AO Tatneft ($ATAD) | | 2.5% | 4.7% | 16.0% | |
| |
|---|
| Median (38 companies) | 26.1% | 3.6% | 0.5% | -20.1% | -10.6% |
|---|
| Ithaca Energy Inc ($IAE) | | 144.8% | -8.0% | -2.0% | -42.2% |
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 ($CAZA) | 0.1% | 30.5% | 40.8% | 44.8% | |
| |
|---|
| Median (23 companies) | 16.5% | 19.2% | 17.4% | 11.6% | 11.2% |
|---|
| Ithaca Energy Inc ($IAE) | 22.5% | 23.4% | -2.9% | 39.5% | 34.4% |
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 ($CAZA) | -50.7% | -3.0% | 47.7% | 49.8% | |
| |
|---|
| Median (39 companies) | 16.2% | 17.4% | 16.5% | 21.8% | 13.6% |
|---|
| Ithaca Energy Inc ($IAE) | 49.3% | 38.8% | -78.0% | -43.7% | 62.2% |
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) ($PMG) | 6.4% | 85.4% | 39.8% | 67.4% | 6.1% |
| Bankers Petroleum Ltd ($BNK) | 64.1% | 50.0% | 58.7% | 47.3% | |
| Volga Gas ($VGAS) | | | 14.0% | 45.5% | |
| |
|---|
| Median (39 companies) | 17.5% | 21.1% | 15.8% | 15.5% | 9.5% |
|---|
| Ithaca Energy Inc ($IAE) | 95.1% | 83.4% | 103.5% | 42.8% | 41.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 13.6% | 5.8% | 5.3% | 25.4% | 17.4% |
| Oil & Gas Development Co ($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% | 26.6% |
| Serica Energy ($SQZ) | -6.2% | -5.1% | -5.5% | 19.4% | |
| |
|---|
| Median (39 companies) | 5.5% | 6.4% | 5.3% | 1.8% | 9.1% |
|---|
| Ithaca Energy Inc ($IAE) | 4.6% | 0.7% | -34.0% | -22.0% | 6.3% |
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 | 2.7x |
| |
|---|
| Median (31 companies) | 0.5x | 0.7x | 1.3x | 1.5x | 1.8x |
|---|
