Methanex Corp reports 55.9% Net Income decline and 6.6 pp EBITDA Margin decline from 26.0% to 19.4%
27.01.2016 • About Methanex Corp (
$MX) • By InTwits
Methanex Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 19.4% in 2015, 26.0% in 2014, 19.8% in 2013, 3.5% in 2012, 19.2% in 2011
- Methanex Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.4%. At the same time it's in pair with industry average of 6.6%.
- CAPEX is quite volatile: 425 in 2015, 658 in 2014, 579 in 2013, 188 in 2012, 158 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.0x while industry average is 2.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Methanex Corp ($MX) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,608 | 2,543 | 3,024 | 3,223 | 2,226 | -31.0% |
| Gross Profit | 501 | 452 | 659 | 798 | 368 | -53.9% |
| EBITDA | 501 | 90 | 600 | 840 | 433 | -48.5% |
| Net Income | 201 | -68 | 329 | 455 | 201 | -55.9% |
Balance Sheet
|
|---|
| Cash | 351 | 727 | 733 | 952 | 255 | -73.2% |
| Short Term Debt | 258 | 38 | 42 | 194 | 48 | -75.3% |
| Long Term Debt | 708 | 1,156 | 1,127 | 1,528 | 1,488 | -2.6% |
Cash flow
|
|---|
| Capex | 158 | 188 | 579 | 658 | 425 | -35.4% |
Ratios
|
|---|
| Revenue growth | 32.6% | -2.5% | 18.9% | 6.6% | -31.0% | |
| EBITDA growth | 70.3% | -82.0% | 565.2% | 40.0% | -48.5% | |
| Gross Margin | 19.2% | 17.8% | 21.8% | 24.7% | 16.5% | -8.2% |
| EBITDA Margin | 19.2% | 3.5% | 19.8% | 26.0% | 19.4% | -6.6% |
| Net Income Margin | 7.7% | -2.7% | 10.9% | 14.1% | 9.0% | -5.1% |
| CAPEX, % of revenue | 6.0% | 7.4% | 19.1% | 20.4% | 19.1% | -1.3% |
| ROIC | 12.3% | -2.1% | 15.7% | 19.3% | 6.1% | -13.1% |
| ROE | 15.1% | -5.1% | 22.3% | 26.4% | 11.4% | -15.0% |
| Net Debt/EBITDA | 1.2x | 5.2x | 0.7x | 0.9x | 3.0x | 2.0x |
Revenue and profitability
Methanex Corp's Revenue dropped on 31.0% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 7.0% to 9.4% in 2015.
Gross Margin decreased on 8.2 pp from 24.7% to 16.5% in 2015.
Net Income marign decreased on 5.1 pp from 14.1% to 9.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Methanex Corp had CAPEX/Revenue of 19.1%. CAPEX/Revenue surged on 11.7 pp from 7.4% in 2012 to 19.1% in 2015. For the last three years the average CAPEX/Revenue was 19.6%.Methanex Corp invested a big chunk of EBITDA (98.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (6.15%) and ROE (11.44%). ROIC dropped on 13.1 pp from 19.3% to 6.1% in 2015. ROE dropped on 15.0 pp from 26.4% to 11.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.5x. Net Debt / EBITDA jumped on 2.0x from 0.9x to 3.0x in 2015. Debt dropped on 10.8% in 2015 while cash dropped on 73.2% in 2015.
Management team
Methanex Corp's CEO is John Floren. John Floren is a founder and has 5 years tenure at the company. The company's CFO Ian P Cameron has spent 15 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Methanex Corp 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 27.7% | 8.5% | -5.0% | -1.1% | 7.6% |
|---|
| Methanex Corp ($MX) | | -2.5% | 18.9% | 6.6% | -31.0% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 31.2% | 31.8% | 21.4% | 16.2% | 10.1% |
|---|
| Methanex Corp ($MX) | 19.2% | 17.8% | 21.8% | 24.7% | 16.5% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 23.3% | 18.5% | 10.8% | 9.6% | 5.9% |
|---|
| Methanex Corp ($MX) | 19.2% | 3.5% | 19.8% | 26.0% | 19.4% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 24.1% | 26.3% | 25.4% | 16.0% | 8.5% |
|---|
| Methanex Corp ($MX) | 6.0% | 7.4% | 19.1% | 20.4% | 19.1% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 5.4% | 4.9% | -0.1% | -0.3% | -7.1% |
|---|
| Methanex Corp ($MX) | 12.3% | -2.1% | 15.7% | 19.3% | 6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | 4.7x |
| Ur-Energy Inc ($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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (93 companies) | -0.1x | 0.3x | 0.8x | 0.9x | 0.2x |
|---|
| Methanex Corp ($MX) | 1.2x | 5.2x | 0.7x | 0.9x | 3.0x |
