Potash Corp of Saskatchewan Inc Net Income dropped on 17.3% in 2015 and Revenue dropped on 11.7%
28.01.2016 • About Potash Corp of Saskatchewan Inc (
$POT) • By InTwits
Potash Corp of Saskatchewan Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 41.4% in 2015 vs. 42.9% in 2014 vs. 55.0% in 2011
- Potash Corp of Saskatchewan Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.9%. At the same time it's in pair with industry average of 28.2%.
- CAPEX is quite volatile: 130 in FY2015, 50 in FY2014, 146 in FY2013, 176 in FY2012, 136 in FY2011
- The company has highly profitable business model: ROIC is at 12.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Potash Corp of Saskatchewan Inc ($POT) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,715 | 7,927 | 7,305 | 7,115 | 6,279 | -11.7% |
| Gross Profit | 4,286 | 3,410 | 2,790 | 2,647 | 2,269 | -14.3% |
| SG&A | 217 | 219 | 231 | 245 | 239 | -2.4% |
| EBITDA | 4,795 | 3,597 | 3,282 | 3,049 | 2,598 | -14.8% |
| Net Income | 3,081 | 2,079 | 1,785 | 1,536 | 1,270 | -17.3% |
Balance Sheet
|
|---|
| Cash | 430 | 562 | 628 | 215 | 91 | -57.7% |
| Short Term Debt | 832 | 615 | 967 | 1,032 | 517 | -49.9% |
| Long Term Debt | 3,705 | 3,466 | 2,970 | 3,213 | 3,710 | 15.5% |
Cash flow
|
|---|
| Capex | 2,176 | 2,133 | 1,624 | 1,138 | 1,217 | 6.9% |
Ratios
|
|---|
| Revenue growth | 33.3% | -9.0% | -7.8% | -2.6% | -11.7% | |
| EBITDA growth | 57.4% | -25.0% | -8.8% | -7.1% | -14.8% | |
| Gross Margin | 49.2% | 43.0% | 38.2% | 37.2% | 36.1% | -1.1% |
| EBITDA Margin | 55.0% | 45.4% | 44.9% | 42.9% | 41.4% | -1.5% |
| Net Income Margin | 35.4% | 26.2% | 24.4% | 21.6% | 20.2% | -1.4% |
| SG&A, % of revenue | 2.5% | 2.8% | 3.2% | 3.4% | 3.8% | 0.4% |
| CAPEX, % of revenue | 25.0% | 26.9% | 22.2% | 16.0% | 19.4% | 3.4% |
| ROIC | 32.6% | 20.9% | 16.8% | 15.2% | 12.6% | -2.6% |
| ROE | 42.4% | 23.4% | 18.3% | 16.7% | 14.8% | -1.9% |
| Net Debt/EBITDA | 0.9x | 1.0x | 1.0x | 1.3x | 1.6x | 0.3x |
Revenue and profitability
The company's Revenue dropped on 11.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.76 pp from 2.2% to 2.9% in 2015.
Gross Margin decreased slightly on 1.1 pp from 37.2% to 36.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased slightly on 1.4 pp from 21.6% to 20.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
Potash Corp of Saskatchewan Inc's CAPEX/Revenue was 19.4% in 2015. Potash Corp of Saskatchewan Inc showed decline in CAPEX/Revenue of 7.5 pp from 26.9% in 2012 to 19.4% in 2015. It's average CAPEX/Revenue for the last three years was 19.2%.
Return on investment
The company operates at good ROIC (12.63%) and ROE (14.79%). ROIC decreased on 2.6 pp from 15.2% to 12.6% in 2015. ROE decreased slightly on 1.9 pp from 16.7% to 14.8% in 2015.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from 1.3x to 1.6x in 2015. Debt showed almost no change in 2015 while cash dropped on 57.7% in 2015.
Management team
The company's CEO is Jochen E Tilk. Jochen E Tilk is a founder and has 4 years tenure at the company. The company's CFO is Wayne R Brownlee. Wayne R Brownlee has 19 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Potash Corp of Saskatchewan 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 26.2% | 8.5% | -4.8% | -1.1% | 6.4% |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | | -9.0% | -7.8% | -2.6% | -11.7% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 30.1% | 31.4% | 21.3% | 16.2% | 10.1% |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | 49.2% | 43.0% | 38.2% | 37.2% | 36.1% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 22.0% | 18.2% | 10.8% | 9.6% | 5.9% |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | 55.0% | 45.4% | 44.9% | 42.9% | 41.4% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 23.9% | 26.2% | 25.4% | 16.1% | 8.5% |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | 25.0% | 26.9% | 22.2% | 16.0% | 19.4% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 5.4% | 4.8% | -0.1% | -0.3% | -6.1% |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | 32.6% | 20.9% | 16.8% | 15.2% | 12.6% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (93 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 0.8x |
|---|
| Potash Corp of Saskatchewan Inc ($POT) | 0.9x | 1.0x | 1.0x | 1.3x | 1.6x |
