Rochester Resources Ltd reports 277% EBITDA decline and 36.5 pp EBITDA Margin decline from 11.4% to -25.1%
25.09.2015 • About Rochester Resources Ltd (
$RCT) • By InTwits
Rochester Resources Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rochester Resources Ltd doesn't have a profitable business model yet: FY2015 ROIC is -47.5%
- EBITDA Margin is declining: -25.1% in FY2015 vs. 11.4% in FY2014 vs. 19.2% in FY2011
- EBITDA Margin is quite volatile: -25.1% in FY2015, 11.4% in FY2014, 15.8% in FY2013, 29.3% in FY2012, 19.2% in FY2011
- Rochester Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.5%. At the same time it's in pair with industry average of 28.6%.
- CAPEX is quite volatile: 0.76 in FY2015, 0.92 in FY2014, 3.8 in FY2013, 2.1 in FY2012, 5.5 in FY2011
- The company has unprofitable business model: ROIC is at -47.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rochester Resources Ltd ($RCT) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 9.196 | 11.635 | 12.495 | 13.295 | 10.712 | -19.4% |
| Gross Profit | 1.863 | 3.062 | 1.629 | 0.523 | -4.031 | -870.9% |
| SG&A | | | | | 0.806 | |
| EBITDA | 1.765 | 3.413 | 1.974 | 1.519 | -2.688 | -276.9% |
| Net Income | -9.141 | 1.883 | -0.322 | -1.151 | -9.695 | 742.2% |
Balance Sheet
|
|---|
| Cash | 0.283 | 0.272 | 0.085 | 0.020 | 0.021 | 4.6% |
| Short Term Debt | 0.051 | 0.028 | 1.500 | 4.588 | 4.596 | 0.2% |
| Long Term Debt | 0.000 | 0.000 | 3.885 | 0.100 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 5.486 | 2.137 | 3.826 | 0.922 | 0.762 | -17.4% |
Ratios
|
|---|
| Revenue growth | 10.0% | 26.5% | 7.4% | 6.4% | -19.4% | |
| EBITDA growth | -163.8% | 93.3% | -42.2% | -23.0% | -276.9% | |
| Gross Margin | 20.3% | 26.3% | 13.0% | 3.9% | -37.6% | -41.6% |
| EBITDA Margin | 19.2% | 29.3% | 15.8% | 11.4% | -25.1% | -36.5% |
| Net Income Margin | -99.4% | 16.2% | -2.6% | -8.7% | -90.5% | -81.9% |
| SG&A, % of revenue | | | | | 7.5% | 7.5% |
| CAPEX, % of revenue | 59.7% | 18.4% | 30.6% | 6.9% | 7.1% | 0.2% |
| ROIC | 4.9% | 15.6% | 2.7% | -1.8% | -47.5% | -45.6% |
| ROE | -46.4% | 11.4% | -2.2% | -10.4% | -171.0% | -160.6% |
| Net Debt/EBITDA | -0.1x | -0.1x | 2.7x | 3.1x | | -3.1x |
Revenue and profitability
The company's Revenue dropped on 19.4% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 36.5 pp from 11.4% to -25.1% in FY2015.
Gross Margin dropped on 41.6 pp from 3.9% to -37.6% in FY2015.
Net Income marign dropped on 81.9 pp from -8.7% to -90.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 7.1%. Rochester Resources Ltd showed big decline in CAPEX/Revenue of 11.3 pp from 18.4% in FY2012 to 7.1% in FY2015. Average CAPEX/Revenue for the last three years was 14.9%.
Return on investment
The company operates at negative ROIC (-47.45%) and ROE (-171.02%). ROIC dropped on 45.6 pp from -1.8% to -47.5% in FY2015. ROE dropped on 161 pp from -10.4% to -171% in FY2015.
Leverage (Debt)
Debt level is -3.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 3.1x from 3.1x to in FY2015. Debt decreased slightly on 2.0% in FY2015 while cash increased on 4.6% in FY2015.
Appendix 1: Peers in Basic Materials
Below you can find Rochester Resources 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 |
|---|
| 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 27.9% | 8.0% | -5.0% | -1.1% | 17.2% |
|---|
| Rochester Resources Ltd ($RCT) | | 26.5% | 7.4% | 6.4% | -19.4% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 31.2% | 31.8% | 21.9% | 17.2% | 22.6% |
|---|
| Rochester Resources Ltd ($RCT) | 20.3% | 26.3% | 13.0% | 3.9% | -37.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 23.3% | 18.2% | 10.8% | 9.6% | 3.2% |
|---|
| Rochester Resources Ltd ($RCT) | 19.2% | 29.3% | 15.8% | 11.4% | -25.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | 123.7% | 38.5% | 49.9% | 7,166.9% | 3.2% |
| Marlin Gold Mining Ltd ($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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 23.9% | 26.3% | 25.1% | 16.1% | 12.1% |
|---|
| Rochester Resources Ltd ($RCT) | 59.7% | 18.4% | 30.6% | 6.9% | 7.1% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 7.0% | 4.8% | -0.1% | 0.2% | -5.7% |
|---|
| Rochester Resources Ltd ($RCT) | 4.9% | 15.6% | 2.7% | -1.8% | -47.5% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (93 companies) | -0.0x | 0.3x | 0.7x | 0.9x | -0.3x |
|---|
| Rochester Resources Ltd ($RCT) | -0.1x | -0.1x | 2.7x | 3.1x | |
