Major Drilling Group International Inc reports 14.5% EBITDA decline and almost no change in EBITDA Margin of 4.0%
04.06.2015 • About Major Drilling Group International Inc (
$MDI) • By InTwits
Major Drilling Group International Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Major Drilling Group International Inc doesn't have a profitable business model yet: FY2015 ROIC is -8.2%
- EBITDA Margin is quite volatile: 4.0% in FY2015, 4.0% in FY2014, 19.4% in FY2013, 22.0% in FY2012, 15.0% in FY2011
- Major Drilling Group International Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.9%. At the same time it's in pair with industry average of 27.2%.
- CAPEX is quite volatile: 14.8 in FY2015, 22.6 in FY2014, 69.0 in FY2013, 81.1 in FY2012, 62.6 in FY2011
- The company has unprofitable business model: ROIC is at -8.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Major Drilling Group International Inc ($MDI) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 482.3 | 797.4 | 695.9 | 354.9 | 305.7 | -13.9% |
| Gross Profit | 120.4 | 251.1 | 220.3 | 104.4 | 65.9 | -36.9% |
| SG&A | 41.0 | 58.0 | 63.8 | 50.1 | 44.9 | -10.3% |
| EBITDA | 72.3 | 175.7 | 134.7 | 14.3 | 12.2 | -14.5% |
| Net Income | 27.6 | 89.7 | 52.1 | -55.3 | -49.6 | -10.4% |
Balance Sheet
|
|---|
| Cash | 16.2 | 37.2 | 82.3 | 74.2 | 44.9 | -39.5% |
| Short Term Debt | 16.3 | 8.7 | 9.1 | 13.6 | 6.8 | -50.0% |
| Long Term Debt | 16.6 | 42.3 | 34.5 | 14.2 | 8.6 | -39.6% |
Cash flow
|
|---|
| Capex | 62.6 | 81.1 | 69.0 | 22.6 | 14.8 | -34.8% |
Ratios
|
|---|
| Revenue growth | 56.7% | 65.3% | -12.7% | -49.0% | -13.9% | |
| EBITDA growth | | 143.2% | -23.3% | -89.4% | -14.5% | |
| Gross Margin | 25.0% | 31.5% | 31.7% | 29.4% | 21.6% | -7.9% |
| EBITDA Margin | 15.0% | 22.0% | 19.4% | 4.0% | 4.0% | -0.0% |
| Net Income Margin | 5.7% | 11.3% | 7.5% | -15.6% | -16.2% | -0.6% |
| SG&A, % of revenue | 8.5% | 7.3% | 9.2% | 14.1% | 14.7% | 0.6% |
| CAPEX, % of revenue | 13.0% | 10.2% | 9.9% | 6.4% | 4.8% | -1.5% |
| ROIC | 11.4% | 28.4% | 14.0% | -6.8% | -8.2% | -1.3% |
| ROE | 8.5% | 22.0% | 10.2% | -10.8% | -10.5% | 0.3% |
| Net Debt/EBITDA | 0.2x | 0.1x | -0.3x | -3.2x | -2.4x | 0.8x |
Revenue and profitability
The company's Revenue dropped on 13.9% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.6 pp from 73.0% to 61.4% in 2015.
Gross Margin decreased on 7.9 pp from 29.4% to 21.6% in FY2015. SG&A as a % of Revenue increased slightly on 0.58 pp from 14.1% to 14.7% in FY2015.
Net Income marign decreased slightly on 0.63 pp from -15.6% to -16.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.8% in FY2015. Major Drilling Group International Inc showed decline in CAPEX/Revenue of 5.3 pp from 10.2% in FY2012 to 4.8% in FY2015. For the last three years the average CAPEX/Revenue was 7.0%.Battling declining revenue Major Drilling Group International Inc made large investments to CAPEX (121% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-8.17%) and ROE (-10.49%). ROIC decreased slightly on 1.3 pp from -6.8% to -8.2% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 1.3x. Net Debt / EBITDA jumped on 0.8x from -3.2x to -2.4x in FY2015. Debt dropped on 44.7% in FY2015 while cash dropped on 39.5% in FY2015.
Appendix 1: Peers in Basic Materials
Below we provide Major Drilling Group International Inc benchmarking against other companies in Basic Materials 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 | 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% |
| Asian Mineral Resources Ltd ($ASN) | | | | 859.1% | |
| Ur-Energy Inc ($URE) | | | | 285.4% | |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 27.7% | 8.0% | -4.8% | -1.1% | 18.5% |
|---|
| Major Drilling Group International Inc ($MDI) | | 65.3% | -12.7% | -49.0% | -13.9% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | |
| |
|---|
| Median (132 companies) | 31.2% | 31.7% | 21.3% | 16.2% | 26.8% |
|---|
| Major Drilling Group International Inc ($MDI) | 25.0% | 31.5% | 31.7% | 29.4% | 21.6% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 23.3% | 18.2% | 10.8% | 9.8% | 8.3% |
|---|
| Major Drilling Group International Inc ($MDI) | 15.0% | 22.0% | 19.4% | 4.0% | 4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | |
| Marlin Gold Mining Ltd ($MLN) | | | | 508.8% | |
| 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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 24.1% | 26.3% | 25.4% | 16.1% | 18.3% |
|---|
| Major Drilling Group International Inc ($MDI) | 13.0% | 10.2% | 9.9% | 6.4% | 4.8% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 5.4% | 4.8% | -0.1% | 0.2% | -2.4% |
|---|
| Major Drilling Group International Inc ($MDI) | 11.4% | 28.4% | 14.0% | -6.8% | -8.2% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (93 companies) | -0.1x | 0.3x | 0.8x | 0.9x | -0.3x |
|---|
| Major Drilling Group International Inc ($MDI) | 0.2x | 0.1x | -0.3x | -3.2x | -2.4x |
