Vår Energi (OB:VAR) - Share price, News & Analysis

Q: What is the Fair Price of VAR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VAR (NOK34.63) is trading below our estimate of [[fair value]] (NOK48.99)

VAR fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	3/6
Financial Health	2/6
Dividends	4/6

VAR Stock Overview

Var Energi AS, an independent upstream oil and gas company, explores for, develops, and produces hydrocarbons.

Rewards

Trading at 29.3% below our estimate of its fair value

Became profitable this year

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Earnings are forecast to decline by an average of 7% per year for the next 3 years

Has a high level of debt

Unstable dividend track record

Vår Energi Competitors

Aker BP

OB:AKRBP

kr195.2b

DNO

OB:DNO

kr11.8b

RAK Petroleum

OB:RAKP

kr5.9b

BW Energy

OB:BWE

kr5.4b

Price History & Performance

Summary of all time highs, changes and price drops for Vår Energi
Historical stock prices
Current Share Price	kr34.63
52 Week High	kr47.20
52 Week Low	kr25.56
Beta	0
1 Month Change	-20.77%
3 Month Change	-7.51%
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	24.91%

Recent News & Updates

Aug 03

The Strong Earnings Posted By Vår Energi (OB:VAR) Are A Good Indication Of The Strength Of The Business

Vår Energi AS ( OB:VAR ) just reported healthy earnings but the stock price didn't move much. We think that investors...

Jul 29

Earnings Miss: Vår Energi AS Missed EPS By 88% And Analysts Are Revising Their Forecasts

Vår Energi AS ( OB:VAR ) just released its latest quarterly report and things are not looking great. It wasn't a great...

Shareholder Returns

	VAR	NO Oil and Gas	NO Market
7D	-3.5%	-1.3%	-5.1%
1Y	n/a	53.3%	-4.5%

Return vs Industry: Insufficient data to determine how VAR performed against the Norwegian Oil and Gas industry.

Return vs Market: Insufficient data to determine how VAR performed against the Norwegian Market.

Price Volatility

Is VAR's price volatile compared to industry and market?
VAR volatility
VAR Average Weekly Movement	6.7%
Oil and Gas Industry Average Movement	7.4%
Market Average Movement	6.6%
10% most volatile stocks in NO Market	11.4%
10% least volatile stocks in NO Market	3.7%

Stable Share Price: VAR is not significantly more volatile than the rest of Norwegian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: VAR's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1965	900	Torger Rod	https://www.varenergi.no

Var Energi AS, an independent upstream oil and gas company, explores for, develops, and produces hydrocarbons. The company operates four fields on the Norwegian continental shelf, including the Goliat, Marulk, Balder, and Ringhorne and Ringhorne East fields located in the Barents, the Norwegian, and the North Sea, as well as holds ownership interests in 32 producing partner-operated fields on the Norwegian continental shelf. It has reserves of 1,147 million barrels of oil equivalent on the Norwegian continental shelf.

Vår Energi Fundamentals Summary

How do Vår Energi's earnings and revenue compare to its market cap?
VAR fundamental statistics
Market Cap	kr86.44b
Earnings (TTM)	kr8.86b
Revenue (TTM)	kr94.50b

9.8x

P/E Ratio

0.9x

P/S Ratio

Is VAR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VAR income statement (TTM)
Revenue	US$8.80b
Cost of Revenue	US$1.35b
Gross Profit	US$7.45b
Other Expenses	US$6.63b
Earnings	US$825.60m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 25, 2022

Earnings per share (EPS)	0.33
Gross Margin	84.66%
Net Profit Margin	9.38%
Debt/Equity Ratio	213.0%

How did VAR perform over the long term?

See historical performance and comparison

Dividends

12.4%

Current Dividend Yield

58%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is VAR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VAR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VAR. This is calculated by dividing VAR's market cap by their current preferred multiple.
What is VAR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$8.05b

VAR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	1.5x
PEG Ratio	-1.4x

Price to Earnings Ratio vs Peers

How does VAR's PE Ratio compare to its peers?

VAR PE Ratio vs Peers

The above table shows the PE ratio for VAR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8x
AKRBP Aker BP	14.1x	-6.6%	kr195.2b
DNO DNO	3.6x	-19.3%	kr11.8b
RAKP RAK Petroleum	3.6x	n/a	kr5.9b
BWE BW Energy	10.6x	29.5%	kr5.4b
VAR Vår Energi	9.8x	-7.0%	kr86.4b

Price-To-Earnings vs Peers: VAR is expensive based on its Price-To-Earnings Ratio (9.8x) compared to the peer average (8x).

Price to Earnings Ratio vs Industry

How does VAR's PE Ratio compare vs other companies in the European Oil and Gas Industry?

Price-To-Earnings vs Industry: VAR is expensive based on its Price-To-Earnings Ratio (9.8x) compared to the European Oil and Gas industry average (5.4x)

Price to Earnings Ratio vs Fair Ratio

What is VAR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VAR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.8x
Fair PE Ratio	10.3x

Price-To-Earnings vs Fair Ratio: VAR is good value based on its Price-To-Earnings Ratio (9.8x) compared to the estimated Fair Price-To-Earnings Ratio (10.3x).

Share Price vs Fair Value

What is the Fair Price of VAR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VAR (NOK34.63) is trading below our estimate of fair value (NOK48.99)

Significantly Below Fair Value: VAR is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Vår Energi forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-7.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VAR's earnings are forecast to decline over the next 3 years (-7% per year).

Earnings vs Market: VAR's earnings are forecast to decline over the next 3 years (-7% per year).

High Growth Earnings: VAR's earnings are forecast to decline over the next 3 years.

Revenue vs Market: VAR's revenue is expected to decline over the next 3 years (-6.5% per year).

High Growth Revenue: VAR's revenue is forecast to decline over the next 3 years (-6.5% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VAR's Return on Equity is forecast to be very high in 3 years time (42.4%).

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Past Performance

How has Vår Energi performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

20.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VAR has high quality earnings.

Growing Profit Margin: VAR became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: VAR's earnings have grown significantly by 20.3% per year over the past 5 years.

Accelerating Growth: VAR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: VAR has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (27.2%).

Return on Equity

High ROE: Whilst VAR's Return on Equity (52.97%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Vår Energi's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VAR's short term assets ($2.0B) do not cover its short term liabilities ($3.4B).

Long Term Liabilities: VAR's short term assets ($2.0B) do not cover its long term liabilities ($13.7B).

Debt to Equity History and Analysis

Debt Level: VAR's net debt to equity ratio (155.8%) is considered high.

Reducing Debt: Insufficient data to determine if VAR's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: VAR's debt is well covered by operating cash flow (177.5%).

Interest Coverage: VAR's interest payments on its debt are well covered by EBIT (138.8x coverage).

Balance Sheet

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Dividend

What is Vår Energi current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

12.40%

Current Dividend Yield

Dividend Yield vs Market

Vår Energi Dividend Yield vs Market

How does Vår Energi dividend yield compare to the market?
Segment	Dividend Yield
Company (Vår Energi)	12.4%
Market Bottom 25% (NO)	3.8%
Market Top 25% (NO)	8.0%
Industry Average (Oil and Gas)	6.9%
Analyst forecast in 3 Years (Vår Energi)	12.1%

Notable Dividend: VAR's dividend (12.4%) is higher than the bottom 25% of dividend payers in the Norwegian market (3.8%).

High Dividend: VAR's dividend (12.4%) is in the top 25% of dividend payers in the Norwegian market (7.97%)

Stability and Growth of Payments

Stable Dividend: Too early to tell whether VAR's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if VAR's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (57.6%), VAR's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30.6%), VAR's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

CEO

Torger Rod

no data

Tenure

Mr. Torger Rod serves as Chief Executive Officer of Vår Energi AS. Mr. Torger Rød came to Vår Energi from the position as Head of Safety and Security in Equinor. He has spent many years working with Equino...

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

What is the ownership structure of VAR?
Owner Type	Number of Shares	Ownership Percentage
Institutions	128,206,067	5.1%
General Public	275,948,589	11.1%
Private Companies	517,635,559	20.7%
Public Companies	1,574,616,035	63.1%

Dilution of Shares: VAR only recently listed within the past 12 months.

Top Shareholders

Top 25 shareholders own 88.91% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
63.08%	Eni S.p.A.	1,574,616,035	$54.5b	-9.7%	no data
20.74%	Point Resources Holding AS	517,635,559	$17.9b	-31.23%	no data
3.09%	Capital Research and Management Company	77,220,589	$2.7b	0%	0.02%
1.02%	DNB Asset Management AS	25,366,922	$878.3m	-1.87%	0.31%
0.28%	The Vanguard Group, Inc.	7,056,610	$244.3m	0%	no data
0.11%	IG Investment Management, Ltd.	2,752,900	$95.3m	0%	0.03%
0.1%	Mackenzie Financial Corporation	2,485,340	$86.1m	0.35%	0.01%
0.079%	KLP Kapitalforvaltning AS	1,973,000	$68.3m	6.65%	0.04%
0.056%	Franklin Resources, Inc.	1,393,845	$48.3m	-49.66%	no data
0.051%	UBS Asset Management	1,269,800	$44.0m	0%	no data
0.049%	Lightman Investment Management Limited	1,230,000	$42.6m	0%	2.07%
0.044%	Alken Asset Management LLP	1,090,465	$37.8m	0%	0.63%
0.042%	Pictet Asset Management Limited	1,041,607	$36.1m	0%	no data
0.034%	Skagen AS	837,500	$29.0m	0%	0.04%
0.021%	Canada Life Investment Management Ltd.	529,400	$18.3m	0%	0.15%
0.017%	Danske Bank A/S, Asset Management Arm	420,500	$14.6m	9.42%	0.02%
0.016%	First Trust Advisors LP	405,729	$14.0m	-0.87%	no data
0.016%	Wellington Management Group LLP	400,946	$13.9m	0%	no data
0.014%	DNCA Finance	350,000	$12.1m	0%	0.01%
0.012%	Sissener AS	300,000	$10.4m	0%	0.42%
0.011%	AXA Towarzystwo Funduszy Inwestycyjnych S.A.	265,700	$9.2m	0%	0.46%
0.01%	Victory Capital Management Inc.	249,538	$8.6m	0%	no data
0.0096%	Credit Suisse Asset Management (Switzerland)	240,144	$8.3m	0%	no data
0.0076%	Warburg Invest Kapitalanlagegesellschaft mbH	189,475	$6.6m	-35.85%	0.05%
0.0065%	J.P. Morgan Asset Management, Inc.	162,017	$5.6m	-32.89%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
0AAY	LSE (London Stock Exchange)	Yes	Ordinary Shares	GB	NOK	Feb 2022
VAR	OB (Oslo Bors)	Yes	Ordinary Shares	NO	NOK	Feb 2022
J4V	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Feb 2022
VARO	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Ordinary Shares	GB	NOK	Feb 2022

Data	Last Updated (UTC time)
Company Analysis	2022/09/29 00:00
End of Day Share Price	2022/09/29 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31