Cameco Corp reports 64.8% Net Income decline while 4.5 pp EBITDA Margin growth from 15.7% to 20.3%
05.02.2016 • About Cameco Corp (
$CCO) • By InTwits
Cameco Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cameco Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 24.4%. At the same time it's in pair with industry average of 28.1%.
- CAPEX is quite volatile: 79.1 in FY2015, 31.8 in FY2014, 20.9 in FY2013, 24.9 in FY2012, 43.5 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cameco Corp ($CCO) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,384 | 1,891 | 2,439 | 2,398 | 2,754 | 14.9% |
| Gross Profit | 1,051 | 540 | 607 | 638 | 697 | 9.3% |
| SG&A | 157 | 181 | 185 | 176 | 187 | 5.9% |
| EBITDA | 796 | 304 | 547 | 377 | 558 | 47.9% |
| Net Income | 450 | 253 | 318 | 185 | 65 | -64.8% |
Balance Sheet
|
|---|
| Cash | 398 | 749 | 229 | 567 | 459 | -19.1% |
| Short Term Debt | 113 | 67 | 91 | 0 | 0 | |
| Long Term Debt | 926 | 1,292 | 1,293 | 1,491 | 1,492 | 0.1% |
Cash flow
|
|---|
| Capex | 647 | 672 | 646 | 480 | 359 | -25.3% |
Ratios
|
|---|
| Revenue growth | 12.3% | -20.7% | 29.0% | -1.7% | 14.9% | |
| EBITDA growth | 8.0% | -61.9% | 80.3% | -31.1% | 47.9% | |
| Gross Margin | 44.1% | 28.6% | 24.9% | 26.6% | 25.3% | -1.3% |
| EBITDA Margin | 33.4% | 16.1% | 22.4% | 15.7% | 20.3% | 4.5% |
| Net Income Margin | 18.9% | 13.4% | 13.1% | 7.7% | 2.4% | -5.4% |
| SG&A, % of revenue | 6.6% | 9.6% | 7.6% | 7.4% | 6.8% | -0.6% |
| CAPEX, % of revenue | 27.1% | 35.5% | 26.5% | 20.0% | 13.0% | -7.0% |
| ROIC | 8.8% | 1.4% | 4.2% | 0.6% | 3.8% | 3.2% |
| ROE | 9.4% | 5.1% | 6.2% | 3.4% | 1.2% | -2.2% |
| Net Debt/EBITDA | 0.8x | 2.0x | 2.1x | 2.5x | 1.9x | -0.6x |
Revenue and profitability
Cameco Corp's Revenue surged on 14.9% in 2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.5 pp from 15.7% to 20.3% in 2015.
Gross Margin decreased slightly on 1.3 pp from 26.6% to 25.3% in 2015. SG&A as a % of Revenue decreased slightly on 0.57 pp from 7.4% to 6.8% in 2015.
Net Income marign decreased on 5.4 pp from 7.7% to 2.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Cameco Corp had CAPEX/Revenue of 13.0%. CAPEX/Revenue dropped on 22.5 pp from 35.5% in 2012 to 13.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 19.8%.To fuel this fast growth Cameco Corp invested a large share of EBITDA (64.2%) to CAPEX.
Return on investment
The company operates at low ROIC (3.81%) and ROE (1.19%). ROIC increased on 3.2 pp from 0.59% to 3.8% in 2015. ROE decreased on 2.2 pp from 3.4% to 1.2% in 2015.
Leverage (Debt)
Debt level is 1.9x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 2.5x to 1.9x in 2015. Debt showed almost no change in 2015 while cash dropped on 19.1% in 2015.
Management team
Timothy S Gitzel "Tim" is a the company's CEO. Timothy S Gitzel "Tim" is a founder and has spent 7 years at the company. Cameco Corp's CFO is Grant E Isaac. Grant E Isaac has 7 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Cameco 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (129 companies) | 27.8% | 8.5% | -5.0% | -1.1% | 4.3% |
|---|
| Cameco Corp ($CCO) | | -20.7% | 29.0% | -1.7% | 14.9% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (132 companies) | 30.1% | 31.8% | 21.3% | 16.2% | 16.5% |
|---|
| Cameco Corp ($CCO) | 44.1% | 28.6% | 24.9% | 26.6% | 25.3% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (136 companies) | 22.0% | 18.5% | 10.8% | 9.6% | 6.6% |
|---|
| Cameco Corp ($CCO) | 33.4% | 16.1% | 22.4% | 15.7% | 20.3% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (138 companies) | 23.9% | 26.2% | 25.1% | 16.0% | 8.3% |
|---|
| Cameco Corp ($CCO) | 27.1% | 35.5% | 26.5% | 20.0% | 13.0% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (142 companies) | 5.4% | 4.9% | -0.1% | -0.3% | -6.0% |
|---|
| Cameco Corp ($CCO) | 8.8% | 1.4% | 4.2% | 0.6% | 3.8% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (93 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 1.5x |
|---|
| Cameco Corp ($CCO) | 0.8x | 2.0x | 2.1x | 2.5x | 1.9x |
