Majestic Gold Corp revenue increased on 7.7% in 2015 and EBITDA Margin increased slightly on 1.4 pp from -12.1% to -10.8%
28.01.2016 • About Majestic Gold Corp (
$MJS) • By InTwits
Majestic Gold Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Majestic Gold Corp doesn't have a profitable business model yet: FY2015 ROIC is -6.1%
- The company operates at negative EBITDA Margin: -10.8%
- Majestic Gold Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -7.2% for the sames years0
- Majestic Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 45.1%. At the same time it's a lot of higher than industry average of 28.2%.
- CAPEX is quite volatile: 0.48 in FY2015, 2.2 in FY2014, 0.86 in FY2013, 35.2 in FY2012, 10.7 in FY2011
- The company has unprofitable business model: ROIC is at -6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Majestic Gold Corp ($MJS) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10.510 | 31.909 | 26.816 | 25.784 | 27.761 | 7.7% |
| Gross Profit | 2.270 | 11.917 | 6.470 | 0.183 | -2.242 | -1,328.2% |
| SG&A | | | | | 4.099 | |
| EBITDA | -8.557 | 5.868 | 0.001 | -3.132 | -2.988 | -4.6% |
| Net Income | -10.888 | -2.325 | -5.531 | -6.831 | -5.966 | -12.7% |
Balance Sheet
|
|---|
| Cash | 14.076 | 24.567 | 16.850 | 9.877 | 9.354 | -5.3% |
| Short Term Debt | 1.516 | 13.100 | 16.350 | 15.805 | 27.713 | 75.3% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 10.697 | 35.213 | 0.863 | 2.208 | 0.476 | -78.4% |
Ratios
|
|---|
| Revenue growth | 84.6% | 203.6% | -16.0% | -3.8% | 7.7% | |
| EBITDA growth | 190.4% | -168.6% | -100.0% | -304,888.1% | -4.6% | |
| Gross Margin | 21.6% | 37.3% | 24.1% | 0.7% | -8.1% | -8.8% |
| EBITDA Margin | -81.4% | 18.4% | 0.0% | -12.1% | -10.8% | 1.4% |
| Net Income Margin | -103.6% | -7.3% | -20.6% | -26.5% | -21.5% | 5.0% |
| SG&A, % of revenue | | | | | 14.8% | 14.8% |
| CAPEX, % of revenue | 101.8% | 110.4% | 3.2% | 8.6% | 1.7% | -6.8% |
| ROIC | -23.6% | 5.4% | -1.9% | -6.1% | -6.1% | 0.0% |
| ROE | -37.8% | -4.1% | -8.1% | -11.0% | -9.7% | 1.3% |
| Net Debt/EBITDA | | -2.0x | -486.6x | | | 0.0x |
Revenue and profitability
The company's Revenue increased on 7.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 9.3% to 11.2% in FY2015.
Gross Margin decreased on 8.8 pp from 0.71% to -8.1% in FY2015.
Net Income marign increased on 5.0 pp from -26.5% to -21.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Majestic Gold Corp had CAPEX/Revenue of 1.7%. Majestic Gold Corp's CAPEX/Revenue dropped on 109 pp from 110% in FY2012 to 1.7% in FY2015. It's average CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at negative ROIC (-6.10%) and ROE (-9.70%). ROIC showed almost no change in FY2015. ROE increased slightly on 1.3 pp from -11.0% to -9.7% in FY2015.
Leverage (Debt)
Debt level is -11.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt surged on 75.3% in FY2015 while cash decreased on 5.3% in FY2015.
Appendix 1: Peers in Basic Materials
Below you can find Majestic Gold Corp 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 26.2% | 8.0% | -4.8% | -1.1% | 4.7% |
|---|
| Majestic Gold Corp ($MJS) | | 203.6% | -16.0% | -3.8% | 7.7% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 31.2% | 31.4% | 21.3% | 17.2% | 13.5% |
|---|
| Majestic Gold Corp ($MJS) | 21.6% | 37.3% | 24.1% | 0.7% | -8.1% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 23.3% | 18.3% | 11.5% | 9.8% | 6.6% |
|---|
| Majestic Gold Corp ($MJS) | -81.4% | 18.4% | 0.0% | -12.1% | -10.8% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 23.9% | 26.2% | 25.4% | 16.1% | 10.2% |
|---|
| Majestic Gold Corp ($MJS) | 101.8% | 110.4% | 3.2% | 8.6% | 1.7% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 7.0% | 4.8% | 0.0% | 0.2% | -5.8% |
|---|
| Majestic Gold Corp ($MJS) | -23.6% | 5.4% | -1.9% | -6.1% | -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 (94 companies) | -0.1x | 0.3x | 0.8x | 0.9x | 1.1x |
|---|
