Kinross Gold Corp revenue dropped on 11.9% in 2015 while EBITDA Margin increased on 9.5 pp from -4.4% to 5.1%
10.02.2016 • About Kinross Gold Corp (
$K) • By InTwits
Kinross Gold Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kinross Gold Corp doesn't have a profitable business model yet: 2015 ROIC is -10.9%
- Kinross Gold Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -23.7% for the sames years0
- Kinross Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 31.7%. At the same time it's in pair with industry average of 28.1%.
- CAPEX is quite volatile: 610 in 2015, 632 in 2014, 1,262 in 2013, 1,858 in 2012, 1,683 in 2011
- The company has unprofitable business model: ROIC is at -10.9%
- It operates with high leverage: Net Debt/EBITDA is 6.1x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kinross Gold Corp ($K) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,843 | 4,307 | 3,780 | 3,466 | 3,052 | -11.9% |
| Gross Profit | -1,205 | -1,750 | -2,223 | -631 | -379 | -39.9% |
| SG&A | 174 | 179 | 177 | 179 | 179 | 0.3% |
| EBITDA | -1,011 | -1,561 | -1,806 | -153 | 155 | -201.5% |
| Net Income | -2,074 | -2,505 | -3,743 | -1,167 | -985 | -15.6% |
Balance Sheet
|
|---|
| Cash | 1,766 | 1,633 | 735 | 984 | 1,044 | 6.1% |
| Short Term Debt | 33 | 516 | 60 | 60 | 250 | 315.8% |
| Long Term Debt | 1,600 | 2,116 | 2,060 | 1,998 | 1,732 | -13.3% |
Cash flow
|
|---|
| Capex | 1,683 | 1,858 | 1,262 | 632 | 610 | -3.5% |
Ratios
|
|---|
| Revenue growth | 27.7% | 12.1% | -12.3% | -8.3% | -11.9% | |
| EBITDA growth | -184.3% | 54.3% | 15.7% | -91.6% | -201.5% | |
| Gross Margin | -31.4% | -40.6% | -58.8% | -18.2% | -12.4% | 5.8% |
| EBITDA Margin | -26.3% | -36.2% | -47.8% | -4.4% | 5.1% | 9.5% |
| Net Income Margin | -54.0% | -58.2% | -99.0% | -33.7% | -32.3% | 1.4% |
| SG&A, % of revenue | 4.5% | 4.2% | 4.7% | 5.2% | 5.9% | 0.7% |
| CAPEX, % of revenue | 43.8% | 43.1% | 33.4% | 18.2% | 20.0% | 1.8% |
| ROIC | -10.1% | -15.8% | -24.1% | -12.9% | -10.9% | 2.0% |
| ROE | -15.4% | -22.5% | -47.2% | -21.5% | -22.5% | -1.1% |
| Net Debt/EBITDA | | | | | 6.1x | 6.1x |
Revenue and profitability
The company's Revenue dropped on 11.9% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.5 pp from -4.4% to 5.1% in 2015.
Gross Margin increased on 5.8 pp from -18.2% to -12.4% in 2015. SG&A as a % of Revenue increased slightly on 0.72 pp from 5.2% to 5.9% in 2015.
Net Income marign increased slightly on 1.4 pp from -33.7% to -32.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 20.0%. CAPEX/Revenue dropped on 23.2 pp from 43.1% in 2012 to 20.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 23.9%.Battling declining revenue Kinross Gold Corp made large investments to CAPEX (394% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-10.87%) and ROE (-22.55%). ROIC increased on 2.0 pp from -12.9% to -10.9% in 2015. ROE decreased slightly on 1.1 pp from -21.5% to -22.5% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.1x and Debt / EBITDA is 12.8x. Net Debt / EBITDA jumped6.1x from to 6.1x in 2015. Debt decreased on 3.7% in 2015 while cash increased on 6.1% in 2015.
Management team
Kinross Gold Corp's CEO J Paul Rollinson is a founder and has spent 6 years at the company. Kinross Gold Corp's CFO is Tony S Giardini. Tony S Giardini has 6 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Kinross 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 26.3% | 8.0% | -5.0% | -0.8% | 4.5% |
|---|
| Kinross Gold Corp ($K) | | 12.1% | -12.3% | -8.3% | -11.9% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 17.6% | 21.4% |
|---|
| Kinross Gold Corp ($K) | -31.4% | -40.6% | -58.8% | -18.2% | -12.4% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.7% | 9.9% | 9.1% |
|---|
| Kinross Gold Corp ($K) | -26.3% | -36.2% | -47.8% | -4.4% | 5.1% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 10.2% |
|---|
| Kinross Gold Corp ($K) | 43.8% | 43.1% | 33.4% | 18.2% | 20.0% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | 0.1% | 0.6% | -3.6% |
|---|
| Kinross Gold Corp ($K) | -10.1% | -15.8% | -24.1% | -12.9% | -10.9% |
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 (95 companies) | -0.1x | 0.3x | 0.8x | 0.9x | 1.7x |
|---|
