Katanga Mining Ltd Net Income dropped on 412% in 2015 and Revenue dropped on 37.9%
11.02.2016 • About Katanga Mining Ltd (
$KAT) • By InTwits
Katanga Mining Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Katanga Mining Ltd doesn't have a profitable business model yet: 2015 ROIC is -11.7%
- EBITDA Margin is quite volatile: -43.5% in 2015, 13.7% in 2014, 26.1% in 2013, 5.1% in 2012, 29.8% in 2011
- Katanga Mining Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 73.1%. At the same time it's a lot of higher than industry average of 28.3%.
- CAPEX is quite volatile: 475 in 2015, 1,270 in 2014, 598 in 2013, 250 in 2012, 182 in 2011
- The company has unprofitable business model: ROIC is at -11.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Katanga Mining Ltd ($KAT) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 574 | 601 | 806 | 1,079 | 670 | -37.9% |
| Gross Profit | 97 | -68 | 65 | -50 | -457 | 818.3% |
| SG&A | | | | | 3 | |
| EBITDA | 171 | 31 | 210 | 148 | -292 | -296.8% |
| Net Income | 131 | 44 | 101 | 136 | -424 | -412.3% |
Balance Sheet
|
|---|
| Cash | 57 | 57 | 26 | 10 | 38 | 282.7% |
| Short Term Debt | 0 | | | 20 | 0 | -100.0% |
| Long Term Debt | 120 | 650 | 718 | 2,771 | 3,058 | 10.4% |
Cash flow
|
|---|
| Capex | 278 | 575 | 699 | 579 | 542 | -6.3% |
Ratios
|
|---|
| Revenue growth | 7.2% | 4.6% | 34.2% | 33.9% | -37.9% | |
| EBITDA growth | 2.9% | -82.2% | 588.9% | -29.6% | -296.8% | |
| Gross Margin | 16.9% | -11.3% | 8.0% | -4.6% | -68.2% | -63.6% |
| EBITDA Margin | 29.8% | 5.1% | 26.1% | 13.7% | -43.5% | -57.3% |
| Net Income Margin | 22.8% | 7.3% | 12.6% | 12.6% | -63.3% | -75.9% |
| SG&A, % of revenue | | | | | 0.4% | 0.4% |
| CAPEX, % of revenue | 48.4% | 95.8% | 86.8% | 53.7% | 81.0% | 27.3% |
| ROIC | 5.0% | -4.4% | 2.4% | -1.7% | -11.7% | -10.0% |
| ROE | 7.9% | 2.5% | 5.6% | 7.0% | -23.7% | -30.7% |
| Net Debt/EBITDA | 0.4x | 19.4x | 3.3x | 18.8x | | -18.8x |
Revenue and profitability
The company's Revenue dropped on 37.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 57.3 pp from 13.7% to -43.5% in 2015.
Gross Margin dropped on 63.6 pp from -4.6% to -68.2% in 2015.
Net Income marign dropped on 75.9 pp from 12.6% to -63.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Katanga Mining Ltd had CAPEX/Revenue of 81.0%. Katanga Mining Ltd's CAPEX/Revenue dropped on 14.9 pp from 95.8% in 2012 to 81.0% in 2015. Average CAPEX/Revenue for the last three years was 73.8%.
Return on investment
The company operates at negative ROIC (-11.75%) and ROE (-23.65%). ROIC dropped on 10.0 pp from -1.7% to -11.7% in 2015. ROE dropped on 30.7 pp from 7.0% to -23.7% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is . Net Debt / EBITDA dropped on 18.8x from 18.8x to in 2015. Debt increased on 9.5% in 2015 while cash jumped on 283% in 2015.
Appendix 1: Peers in Basic Materials
Below we provide Katanga Mining Ltd 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 29.4% | 8.5% | -5.1% | -1.1% | 4.3% |
|---|
| Katanga Mining Ltd ($KAT) | | 4.6% | 34.2% | 33.9% | -37.9% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 17.6% | 16.5% |
|---|
| Katanga Mining Ltd ($KAT) | 16.9% | -11.3% | 8.0% | -4.6% | -68.2% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.6% | 11.3% | 9.7% | 6.8% |
|---|
| Katanga Mining Ltd ($KAT) | 29.8% | 5.1% | 26.1% | 13.7% | -43.5% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 8.7% |
|---|
| Katanga Mining Ltd ($KAT) | 48.4% | 95.8% | 86.8% | 53.7% | 81.0% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | -0.1% | 0.6% | -3.6% |
|---|
| Katanga Mining Ltd ($KAT) | 5.0% | -4.4% | 2.4% | -1.7% | -11.7% |
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 | |
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| Gran Colombia Gold Corp ($GCM) | 35.1x | 12.7x | 67.4x | 11.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.7x | 0.9x | 1.8x |
|---|
| Katanga Mining Ltd ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
