Range Resources reports 54.8% revenue growth in FY2018 and 389 pp EBITDA Margin growth from -452% to -62.7%
01 Oct 2018 • About Range Resources (
$RRL) • By InTwits
Range Resources reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -62.7%
- Range Resources motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -199.3% for the sames years
- Range Resources has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.7%. At the same time it's in pair with industry average of 16.4%
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $6m in FY2015, $5m in FY2014
- The company has unprofitable business model: ROIC is -13.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 54.8%. During FY2014-FY2018 Revenue growth bottomed in FY2016 at -46.3% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.00 pp from 12.4% to 11.4% in FY2018.
Gross Margin jumped on 52.5 pp from -108% to -55.6% in FY2018. During the last 5 years Gross Margin bottomed in FY2016 at -110% and was growing since that time. SG&A as a % of Revenue dropped on 30.5 pp from 61.9% to 31.4% in FY2018.
Net Income margin jumped on 510 pp from -644% to -134% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.9%. CAPEX/Revenue dropped on 41.5 pp from 43.4% in FY2015 to 1.9% in FY2018. It's average CAPEX/Revenue for the last three years was 2.6%.
Return on investment
The company operates at negative ROIC (-13.9%) and ROE (-167.0%). ROIC surged on 29.1 pp from -42.9% to -13.9% in FY2018. ROE dropped on 49.1 pp from -118% to -167% in FY2018. During the last 5 years ROE topped in FY2015 at -29.6% and was declining since that time.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2018. Debt surged on 109% while cash dropped on 77.1%.
Range Resources has no short term refinancing risk: cash is higher than short term debt (246.6%).
Financial and operational results
FY ended 30 Jun 2018
Range Resources ($RRL) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 21.186 | 13.153 | 7.062 | 8.435 | 13.059 | 54.8% |
| Gross Profit | -3.627 | -2.859 | -7.800 | -9.119 | -7.266 | |
| SG&A | 14.424 | 9.947 | 3.400 | 5.224 | 4.103 | -21.5% |
| EBITDA | -35.569 | -12.003 | -31.531 | -38.095 | -8.183 | |
| Net Income | -102.542 | -30.279 | -43.875 | -54.363 | -17.530 | |
Balance Sheet
|
|---|
| Cash | 2.977 | 10.530 | 13.001 | 17.254 | 3.946 | -77.1% |
| Short Term Debt | 0.000 | 7.518 | 1.556 | 0.000 | 1.600 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 21.072 | 42.440 | 101.4% |
Cash flow
|
|---|
| Capex | 4.688 | 5.714 | 0.401 | 0.004 | 0.254 | 5,723.7% |
Ratios
|
|---|
| Revenue growth | -18.7% | -37.9% | -46.3% | 19.4% | 54.8% | |
| EBITDA growth | 501.2% | -66.3% | 162.7% | 20.8% | -78.5% | |
|
|---|
| Gross Margin | -17.1% | -21.7% | -110.4% | -108.1% | -55.6% | 52.5% |
| EBITDA Margin | -167.9% | -91.3% | -446.5% | -451.6% | -62.7% | 389.0% |
| SG&A, % of revenue | 68.1% | 75.6% | 48.1% | 61.9% | 31.4% | -30.5% |
| Net Income Margin | -484.0% | -230.2% | -621.3% | -644.5% | -134.2% | 510.2% |
| CAPEX, % of revenue | 22.1% | 43.4% | 5.7% | 0.1% | 1.9% | 1.9% |
|
|---|
| ROIC | -22.7% | -11.2% | -28.1% | -42.9% | -13.9% | 29.1% |
| ROE | -72.8% | -29.6% | -52.5% | -117.8% | -167.0% | -49.1% |
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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Eland Oil & Gas ($ELA) | | 54.8% | -86.9% | 2,804.1% | |
| President Energy ($PPC) | -6.1% | -19.8% | -1.9% | 81.3% | |
| Amerisur Resources ($AMER) | 17.9% | -69.3% | -22.9% | 79.6% | |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | -3.3% | -7.1% | -5.5% | 54.8% | |
| Urals Energy Public Co ($UEN) | -11.5% | -38.8% | 6.8% | 52.1% | |
| |
|---|
| Median (32 companies) | -1.3% | -19.5% | -8.9% | 18.7% | |
|---|
| Range Resources ($RRL) | | -37.9% | -46.3% | 19.4% | 54.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | 99.0% | 98.5% | 98.7% | |
| Serica Energy ($SQZ) | | 67.0% | 30.7% | 60.4% | |
| Oil & Gas Development Co ($OGDC) | 68.5% | 62.7% | 54.0% | 55.3% | |
| Tethys Petroleum Limited ($TPL) | 46.2% | -76.0% | -30.0% | 42.8% | |
| Zoltav Resources Inc ($ZOL) | 32.5% | 30.7% | 41.9% | 36.0% | |
| |
|---|
| Median (21 companies) | 19.6% | 12.6% | 13.7% | 18.2% | |
|---|
| Range Resources ($RRL) | -17.1% | -21.7% | -110.4% | -108.1% | -55.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trinity Exploration & Production ($TRIN) | 25.1% | 30.9% | 13.0% | 77.1% | |
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | 62.5% | 49.7% | 59.3% | |
| Oil & Gas Development Co ($OGDC) | 69.3% | 62.4% | 53.9% | 55.8% | |
| Zoltav Resources Inc ($ZOL) | -16.1% | 25.6% | 42.6% | 49.8% | |
| Serica Energy ($SQZ) | | 61.3% | 24.6% | 47.9% | |
| |
|---|
| Median (32 companies) | 15.9% | 18.8% | 13.3% | 17.9% | |
|---|
| Range Resources ($RRL) | -167.9% | -91.3% | -446.5% | -451.6% | -62.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| President Energy ($PPC) | 10.4% | 142.7% | 147.0% | 69.1% | |
| Tethys Petroleum Limited ($TPL) | 95.2% | 37.5% | 12.0% | 66.0% | |
| Ithaca Energy Inc ($IAE) | 103.5% | 42.8% | 41.6% | 33.9% | |
| Volga Gas ($VGAS) | 14.0% | 45.5% | 12.8% | 33.9% | |
| Amerisur Resources ($AMER) | 21.2% | 72.4% | 65.8% | 33.8% | |
| |
|---|
| Median (32 companies) | 15.6% | 15.4% | 13.1% | 11.7% | |
|---|
| Range Resources ($RRL) | 22.1% | 43.4% | 5.7% | 0.1% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trinity Exploration & Production ($TRIN) | 8.0% | 11.0% | -18.7% | 80.5% | |
| Turkiye Petrol Rafinerileri A.S. ($TPRD) | 5.3% | 25.4% | 16.8% | 25.6% | |
| Societatea Natl De Gaze N Romgaz Sa ($SNGR) | | | 10.9% | 20.3% | |
| Novatek OAO ($NVTK) | 21.2% | 19.4% | 26.6% | 17.7% | |
| Serica Energy ($SQZ) | -5.5% | 19.4% | 5.5% | 16.9% | |
| |
|---|
| Median (36 companies) | 5.3% | 1.3% | 4.7% | 5.5% | |
|---|
| Range Resources ($RRL) | -22.7% | -11.2% | -28.1% | -42.9% | -13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ruspetro ($RPO) | 27.9x | 116.8x | | 22.9x | |
| Ithaca Energy Inc ($IAE) | | | 4.5x | 7.5x | |
| Jkx Oil & Gas ($JKX) | | | | 3.5x | |
| Rosneft OJSC ($ROSN) | 2.8x | 2.3x | 2.3x | 3.1x | |
| Hellenic Petroleum Sa ($HLPD) | | 2.5x | 2.1x | 2.1x | |
| |
|---|
| Median (27 companies) | 1.3x | 1.5x | 0.9x | 0.9x | |
|---|
