Sandstorm Gold Ltd CAPEX surged on 679% in 2015 while Revenue decreased on 6.8%
30.03.2016 • About Sandstorm Gold Ltd (
$SSL) • By InTwits
Sandstorm Gold Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sandstorm Gold Ltd doesn't have a profitable business model yet: 2015 ROIC is -1.4%
- Sandstorm Gold Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 169.3%. At the same time it's a lot of higher than industry average of 29.5%.
- CAPEX is quite volatile: 217 in 2015, 27.9 in 2014, 71.1 in 2013, 85.1 in 2012, 34.0 in 2011
- The company has unprofitable business model: ROIC is at -1.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is 3.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sandstorm Gold Ltd ($SSL) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 29.967 | 55.943 | 59.836 | 56.494 | 52.663 | -6.8% |
| Gross Profit | 16.666 | 29.695 | 20.713 | 14.198 | 3.785 | -73.3% |
| SG&A | 2.528 | 7.235 | 13.732 | 6.984 | 5.690 | -18.5% |
| EBITDA | 19.113 | 41.558 | 29.874 | 35.105 | 29.747 | -15.3% |
| Net Income | 12.489 | 21.927 | -73.752 | 11.515 | -43.056 | -473.9% |
Balance Sheet
|
|---|
| Cash | 13.073 | 127.359 | 98.936 | 90.224 | 5.346 | -94.1% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 83.500 | |
Cash flow
|
|---|
| Capex | 33.973 | 85.080 | 71.092 | 27.907 | 217.345 | 678.8% |
Ratios
|
|---|
| Revenue growth | 851.9% | 86.7% | 7.0% | -5.6% | -6.8% | |
| EBITDA growth | -10,544.3% | 117.4% | -28.1% | 17.5% | -15.3% | |
| Gross Margin | 55.6% | 53.1% | 34.6% | 25.1% | 7.2% | -17.9% |
| EBITDA Margin | 63.8% | 74.3% | 49.9% | 62.1% | 56.5% | -5.7% |
| Net Income Margin | 41.7% | 39.2% | -123.3% | 20.4% | -81.8% | -102.1% |
| SG&A, % of revenue | 8.4% | 12.9% | 22.9% | 12.4% | 10.8% | -1.6% |
| CAPEX, % of revenue | 113.4% | 152.1% | 118.8% | 49.4% | 412.7% | 363.3% |
| ROIC | 9.5% | 11.0% | 1.5% | 1.7% | -1.4% | -3.2% |
| ROE | 8.8% | 9.0% | -20.9% | 2.9% | -10.4% | -13.4% |
| Net Debt/EBITDA | -0.7x | -3.1x | -3.3x | -2.6x | 2.6x | 5.2x |
Revenue and profitability
Sandstorm Gold Ltd's Revenue decreased on 6.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 59.8% to 69.2% in 2015.
Gross Margin dropped on 17.9 pp from 25.1% to 7.2% in 2015. SG&A as a % of Revenue decreased slightly on 1.6 pp from 12.4% to 10.8% in 2015.
Net Income marign dropped on 102 pp from 20.4% to -81.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
Sandstorm Gold Ltd's CAPEX/Revenue was 413% in 2015. The company's CAPEX/Revenue jumped on 261 pp from 152% in 2012 to 413% in 2015. Average CAPEX/Revenue for the last three years was 194%.Battling declining revenue Sandstorm Gold Ltd made large investments to CAPEX (731% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-1.44%) and ROE (-10.45%). ROIC decreased on 3.2 pp from 1.7% to -1.4% in 2015. ROE dropped on 13.4 pp from 2.9% to -10.4% in 2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA jumped on 5.2x from -2.6x to 2.6x in 2015. Debt jumped while cash dropped on 94.1% in 2015.
Management team
Nolan Allan Watson is a the company's CEO. Nolan Allan Watson is a founder and has spent 10 years at the company. The company's CFO Erfan Kazemi has spent 7 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find Sandstorm Gold Ltd benchmarking vs. other companies in Basic Materials 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | | 97.4% | -90.6% | -97.6% | 84,715.6% |
| Golden Minerals Co ($AUM) | | 1,320.8% | -59.1% | -97.8% | 3,334.5% |
| Jemi Fibre Corp ($JFI) | | | | -27.3% | 375.3% |
| Osisko Gold Royalties Ltd ($OR) | | | | | 164.4% |
| VMS Ventures Inc ($VMS) | | | | | 139.7% |
| |
|---|
| Median (127 companies) | -20.4% | 8.0% | -5.1% | -0.8% | -1.7% |
|---|
| Sandstorm Gold Ltd ($SSL) | | 86.7% | 7.0% | -5.6% | -6.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | 80.3% |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | 60.9% |
| Trevali Mining Corp ($TV) | | | | 49.0% | 59.3% |
| |
|---|
| Median (121 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 15.5% |
|---|
| Sandstorm Gold Ltd ($SSL) | 55.6% | 53.1% | 34.6% | 25.1% | 7.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | | 72.8% |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | 65.8% |
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | 60.8% |
| Lucara Diamond Corp ($LUC) | | 7.6% | 57.3% | 57.5% | 60.0% |
| |
|---|
| Median (127 companies) | 22.0% | 18.4% | 11.3% | 9.7% | 6.6% |
|---|
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | 56.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Silver Wheaton Corp ($SLW) | 19.4% | 75.5% | 286.8% | 22.5% | 279.2% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | 230.0% |
| Avino Silver & Gold Mines Ltd ($ASM) | | 211.7% | 5.6% | 89.8% | 163.3% |
| Amerigo Resources Ltd ($ARG) | 12.9% | 13.0% | 9.3% | 9.8% | 99.6% |
| Katanga Mining Ltd ($KAT) | 48.4% | 95.8% | 86.8% | 53.7% | 81.0% |
| |
|---|
| Median (127 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 15.7% |
|---|
| Sandstorm Gold Ltd ($SSL) | 113.4% | 152.1% | 118.8% | 49.4% | 412.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | 39.6% |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| Supremex Inc ($SXP) | 13.9% | 14.1% | 18.5% | 16.5% | 23.4% |
| Claude Resources Inc ($CRJ) | 7.1% | 4.5% | -5.6% | 3.6% | 19.3% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | 18.2% |
| |
|---|
| Median (129 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -4.6% |
|---|
| Sandstorm Gold Ltd ($SSL) | 9.5% | 11.0% | 1.5% | 1.7% | -1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | 67.5x |
| Barkerville Gold Mines Ltd ($BGM) | | | | | 38.8x |
| Copper Mountain Mining Corp ($CUM) | 17.2x | 3.9x | 5.0x | 5.4x | 30.6x |
| Resolute Forest Products Inc ($RFP) | 0.6x | 1.3x | 1.1x | 3.8x | 29.6x |
| Fortress Paper Ltd ($FTP) | 92.5x | | | | 18.8x |
| |
|---|
| Median (82 companies) | -0.0x | 0.3x | 0.9x | 0.9x | 1.3x |
|---|
| Sandstorm Gold Ltd ($SSL) | -0.7x | -3.1x | -3.3x | -2.6x | 2.6x |
