Dundee Precious Metals Inc reports 54.1% CAPEX decline and 19.7% Revenue decline
09.02.2016 • About Dundee Precious Metals Inc (
$DPM) • By InTwits
Dundee Precious Metals Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dundee Precious Metals Inc doesn't have a profitable business model yet: 2015 ROIC is -3.6%
- EBITDA Margin is declining: 16.0% in 2015 vs. 26.9% in 2014 vs. 31.9% in 2011
- Dundee Precious Metals Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 37.7%. At the same time it's a lot of higher than industry average of 28.1%.
- CAPEX is quite volatile: 74.9 in 2015, 163 in 2014, 212 in 2013, 101 in 2012, 72.4 in 2011
- The company has unprofitable business model: ROIC is at -3.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.9x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dundee Precious Metals Inc ($DPM) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 338.5 | 384.7 | 344.7 | 324.0 | 260.1 | -19.7% |
| Gross Profit | 131.8 | 157.0 | 89.8 | 61.8 | -2.2 | -103.5% |
| SG&A | 28.9 | 37.9 | 29.6 | 32.2 | 18.6 | -42.2% |
| EBITDA | 108.0 | 116.9 | 96.1 | 87.1 | 41.6 | -52.2% |
| Net Income | 86.1 | 54.4 | 22.5 | -58.9 | -47.0 | -20.3% |
Balance Sheet
|
|---|
| Cash | 172.8 | 121.5 | 48.9 | 36.3 | 26.6 | -26.8% |
| Short Term Debt | 1.6 | 17.8 | 16.6 | 16.3 | 16.3 | 0.0% |
| Long Term Debt | 81.7 | 63.9 | 67.1 | 141.5 | 130.8 | -7.6% |
Cash flow
|
|---|
| Capex | 72.4 | 101.3 | 211.9 | 163.2 | 74.9 | -54.1% |
Ratios
|
|---|
| Revenue growth | 67.6% | 13.7% | -10.4% | -6.0% | -19.7% | |
| EBITDA growth | 123.8% | 8.2% | -17.8% | -9.4% | -52.2% | |
| Gross Margin | 38.9% | 40.8% | 26.0% | 19.1% | -0.8% | -19.9% |
| EBITDA Margin | 31.9% | 30.4% | 27.9% | 26.9% | 16.0% | -10.9% |
| Net Income Margin | 25.4% | 14.1% | 6.5% | -18.2% | -18.1% | 0.1% |
| SG&A, % of revenue | 8.6% | 9.9% | 8.6% | 10.0% | 7.2% | -2.8% |
| CAPEX, % of revenue | 21.4% | 26.3% | 61.5% | 50.4% | 28.8% | -21.6% |
| ROIC | 9.9% | 9.2% | 5.1% | 2.5% | -3.6% | -6.1% |
| ROE | 12.8% | 7.5% | 3.0% | -8.1% | -7.0% | 1.1% |
| Net Debt/EBITDA | -0.8x | -0.3x | 0.4x | 1.4x | 2.9x | 1.5x |
Revenue and profitability
Dundee Precious Metals Inc's Revenue dropped on 19.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 12.9% to 16.0% in 2015.
Gross Margin dropped on 19.9 pp from 19.1% to -0.83% in 2015. SG&A as a % of Revenue decreased on 2.8 pp from 10.0% to 7.2% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 28.8% in 2015. CAPEX/Revenue increased on 2.5 pp from 26.3% in 2012 to 28.8% in 2015. It's average CAPEX/Revenue for the last three years was 46.9%.Dundee Precious Metals Inc has spent a lot to CAPEX (180% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-3.58%) and ROE (-7.02%). ROIC decreased on 6.1 pp from 2.5% to -3.6% in 2015. ROE increased slightly on 1.1 pp from -8.1% to -7.0% in 2015.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and 3.5x Debt / EBITDA. Net Debt / EBITDA surged on 1.5x from 1.4x to 2.9x in 2015. Debt decreased on 6.8% in 2015 while cash dropped on 26.8% in 2015.
Management team
Dundee Precious Metals Inc's CEO Richard Howes "Rick" is a founder and has spent 5 years at the company. Hume Kyle is a The company's CFO. Hume Kyle has spent 7 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Dundee Precious Metals 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 27.7% | 8.0% | -5.0% | -0.8% | 4.3% |
|---|
| Dundee Precious Metals Inc ($DPM) | | 13.7% | -10.4% | -6.0% | -19.7% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 21.2% |
|---|
| Dundee Precious Metals Inc ($DPM) | 38.9% | 40.8% | 26.0% | 19.1% | -0.8% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.3% | 9.7% | 6.7% |
|---|
| Dundee Precious Metals Inc ($DPM) | 31.9% | 30.4% | 27.9% | 26.9% | 16.0% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.2% | 16.0% | 8.7% |
|---|
| Dundee Precious Metals Inc ($DPM) | 21.4% | 26.3% | 61.5% | 50.4% | 28.8% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -5.8% |
|---|
| Dundee Precious Metals Inc ($DPM) | 9.9% | 9.2% | 5.1% | 2.5% | -3.6% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.0x | 0.3x | 0.9x | 0.9x | 1.6x |
|---|
| Dundee Precious Metals Inc ($DPM) | -0.8x | -0.3x | 0.4x | 1.4x | 2.9x |
