ADF Group Inc Net Income dropped on 120% in 2015 and Revenue dropped on 18.2%
09.04.2015 • About ADF Group Inc (
$DRX) • By InTwits
ADF Group Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- ADF Group Inc doesn't have a profitable business model yet: FY2015 ROIC is -2.4%
- EBITDA Margin is quite volatile: 2.1% in FY2015, 15.3% in FY2014, 2.9% in FY2013, 12.5% in FY2012, 19.8% in FY2011
- ADF Group Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.3%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 13.9 in FY2015, 22.7 in FY2014, 5.0 in FY2013, 1.2 in FY2012, 2.3 in FY2011
- The company has unprofitable business model: ROIC is at -2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
ADF Group Inc ($DRX) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 55.268 | 48.431 | 41.412 | 92.997 | 76.058 | -18.2% |
| Gross Profit | 14.136 | 9.303 | 4.706 | 20.219 | 7.267 | -64.1% |
| SG&A | | | | 9.431 | 9.854 | 4.5% |
| EBITDA | 10.922 | 6.032 | 1.221 | 14.234 | 1.594 | -88.8% |
| Net Income | 5.391 | 1.812 | -1.554 | 7.682 | -1.570 | -120.4% |
Balance Sheet
|
|---|
| Cash | 18.677 | 18.976 | 23.914 | 18.675 | 7.946 | -57.5% |
| Short Term Debt | 2.513 | 2.526 | 2.505 | 1.706 | 0.763 | -55.3% |
| Long Term Debt | 6.151 | 3.676 | 1.157 | 4.315 | 9.374 | 117.2% |
Cash flow
|
|---|
| Capex | 2.302 | 1.230 | 5.004 | 22.683 | 13.860 | -38.9% |
Ratios
|
|---|
| Revenue growth | -15.9% | -12.4% | -14.5% | 124.6% | -18.2% | |
| EBITDA growth | -22.9% | -44.8% | -79.8% | 1,065.8% | -88.8% | |
| Gross Margin | 25.6% | 19.2% | 11.4% | 21.7% | 9.6% | -12.2% |
| EBITDA Margin | 19.8% | 12.5% | 2.9% | 15.3% | 2.1% | -13.2% |
| Net Income Margin | 9.8% | 3.7% | -3.8% | 8.3% | -2.1% | -10.3% |
| SG&A, % of revenue | | | | 10.1% | 13.0% | 2.8% |
| CAPEX, % of revenue | 4.2% | 2.5% | 12.1% | 24.4% | 18.2% | -6.2% |
| ROIC | 8.3% | 2.7% | -2.3% | 10.7% | -2.4% | -13.1% |
| ROE | 5.9% | 1.9% | -1.7% | 7.9% | -1.5% | -9.5% |
| Net Debt/EBITDA | -0.9x | -2.1x | -16.6x | -0.9x | 1.4x | 2.3x |
Revenue and profitability
ADF Group Inc's Revenue dropped on 18.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from -4.3% to 0.47% in FY2015.
Gross Margin dropped on 12.2 pp from 21.7% to 9.6% in FY2015. SG&A as a % of Revenue increased on 2.8 pp from 10.1% to 13.0% in FY2015.
Net Income marign dropped on 10.3 pp from 8.3% to -2.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 18.2% in FY2015. CAPEX/Revenue surged on 15.7 pp from 2.5% in FY2012 to 18.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 18.2%.ADF Group Inc has spent a lot to CAPEX (870% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-2.40%) and ROE (-1.53%). ROIC dropped on 13.1 pp from 10.7% to -2.4% in FY2015. ROE decreased on 9.5 pp from 7.9% to -1.5% in FY2015.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 6.4x Debt / EBITDA. Net Debt / EBITDA jumped on 2.3x from -0.9x to 1.4x in FY2015. Debt surged on 68.4% in FY2015 while cash dropped on 57.5% in FY2015.
Appendix 1: Peers in Basic Materials
Below you can find ADF Group Inc 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 |
|---|
| Northern Sun Mining Corp ($NSC) | -93.3% | 315.4% | -99.4% | 8,924.9% | |
| Turquoise Hill Resources Ltd ($TRQ) | | | -34.0% | 3,268.9% | -5.8% |
| Ur-Energy Inc ($URE) | | | | 285.4% | |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | |
| Detour Gold Corp ($DGC) | | | | 248.1% | |
| |
|---|
| Median (121 companies) | 28.1% | 8.6% | -4.8% | -1.1% | 13.1% |
|---|
| ADF Group Inc ($DRX) | | -12.4% | -14.5% | 124.6% | -18.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | |
| Franco-Nevada Corp ($FNV) | 84.6% | 86.1% | 85.0% | 83.5% | |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | |
| |
|---|
| Median (122 companies) | 31.2% | 32.0% | 22.6% | 16.2% | 28.2% |
|---|
| ADF Group Inc ($DRX) | 25.6% | 19.2% | 11.4% | 21.7% | 9.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | |
| Sandstorm Gold Ltd ($SSL) | 63.8% | 74.3% | 49.9% | 62.1% | |
| Nevsun Resources Ltd ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (126 companies) | 23.4% | 18.6% | 13.0% | 9.8% | 15.4% |
|---|
| ADF Group Inc ($DRX) | 19.8% | 12.5% | 2.9% | 15.3% | 2.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | |
| Imperial Metals Corp ($III) | 28.2% | 69.2% | 185.7% | 280.2% | |
| Golden Minerals Co ($AUM) | 462.4% | 36.9% | 16.8% | 212.8% | |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| HudBay Minerals Inc ($HBM) | 27.7% | 77.7% | 199.9% | 175.5% | |
| |
|---|
| Median (128 companies) | 24.1% | 26.2% | 25.7% | 15.7% | 18.4% |
|---|
| ADF Group Inc ($DRX) | 4.2% | 2.5% | 12.1% | 24.4% | 18.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | |
| Nevsun Resources Ltd ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (131 companies) | 7.1% | 5.6% | 1.6% | 0.8% | 0.6% |
|---|
| ADF Group Inc ($DRX) | 8.3% | 2.7% | -2.3% | 10.7% | -2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | |
| Ur-Energy Inc ($URE) | | | | 55.1x | |
| Katanga Mining Ltd ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (88 companies) | -0.1x | 0.3x | 0.7x | 0.9x | -0.7x |
|---|
| ADF Group Inc ($DRX) | -0.9x | -2.1x | -16.6x | -0.9x | 1.4x |
