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Barrick Gold Corp CAPEX dropped on 29.6% in 2015 and Revenue dropped on 11.8%

17.02.2016 • About Barrick Gold Corp ($ABX) • By InTwits

Barrick Gold Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Barrick Gold Corp is a company in decline: 2015 revenue growth was -11.8%, 5 years revenue CAGR was -3.9%
  • The company operates at negative EBITDA Margin: -5.8%
  • EBITDA Margin is quite volatile: -5.8% in 2015, -2.1% in 2014, -56.6% in 2013, 9.4% in 2012, 56.8% in 2011
  • Barrick Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 33.7%. At the same time it's in pair with industry average of 28.4%.
  • CAPEX is quite volatile: 1,713 in 2015, 2,432 in 2014, 5,501 in 2013, 6,773 in 2012, 4,973 in 2011
  • The company has unprofitable business model: ROIC is at -9.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Barrick Gold Corp ($ABX) key annual financial indicators

mln. $201120122013201420152015/2014
Gross Profit7,9967,1375,1983,4092,122-37.8%
Net Income4,484-538-10,366-2,907-2,838-2.4%
Balance Sheet
Short Term Debt1961,848179333203-39.0%
Long Term Debt13,17312,09512,90112,7489,765-23.4%
Cash flow
Revenue growth29.4%1.1%-13.0%-18.3%-11.8%
EBITDA growth27.4%-83.3%-625.7%-96.9%136.4%
Gross Margin56.2%49.6%41.5%33.3%23.5%-9.8%
EBITDA Margin56.8%9.4%-56.6%-2.1%-5.8%-3.6%
Net Income Margin31.5%-3.7%-82.7%-28.4%-31.4%-3.0%
SG&A, % of revenue1.2%3.5%3.1%3.8%2.6%-1.2%
CAPEX, % of revenue34.9%47.1%43.9%23.8%19.0%-4.8%
Net Debt/EBITDA1.3x8.8x0.0x

Revenue and profitability

The company's Revenue dropped on 11.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.6 pp from -2.1% to -5.8% in 2015.

Gross Margin decreased on 9.8 pp from 33.3% to 23.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.2 pp from 3.8% to 2.6% in 2015.

Net Income marign decreased on 3.0 pp from -28.4% to -31.4% in 2015.

Capital expenditures (CAPEX) and working capital investments

In 2015 Barrick Gold Corp had CAPEX/Revenue of 19.0%. Barrick Gold Corp showed big decline in CAPEX/Revenue of 28.1 pp from 47.1% in 2012 to 19.0% in 2015. For the last three years the average CAPEX/Revenue was 28.9%.

Return on investment

The company operates at negative ROIC (-9.68%) and ROE (-32.57%). ROIC decreased on 3.3 pp from -6.4% to -9.7% in 2015. ROE decreased on 8.1 pp from -24.4% to -32.6% in 2015.

Leverage (Debt)

Company's Net Debt / EBITDA is -1.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt dropped on 23.8% in 2015 while cash decreased on 9.0% in 2015.

Appendix 1: Peers in Basic Materials

Below we provide Barrick Gold 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 ($NSU)3.3%-72.5%256.5%
Median (130 companies)30.1%8.5%-5.0%-0.8%0.6%
Barrick Gold Corp ($ABX)1.1%-13.0%-18.3%-11.8%

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 ($RGL)68.9%71.5%70.6%57.6%86.0%
Median (133 companies)30.1%31.5%20.7%16.8%15.5%
Barrick Gold Corp ($ABX)56.2%49.6%41.5%33.3%23.5%

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 ($NSU)81.0%76.8%54.5%60.4%
Median (137 companies)22.0%18.6%11.7%9.9%7.9%
Barrick Gold Corp ($ABX)56.8%9.4%-56.6%-2.1%-5.8%

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 ($FNV)9.3%3.7%35.5%201.6%
Median (139 companies)23.9%26.3%25.2%16.0%8.5%
Barrick Gold Corp ($ABX)34.9%47.1%43.9%23.8%19.0%

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 ($CFX)103.5%4.9%13.2%21.3%24.1%
Median (143 companies)5.4%4.9%0.1%0.6%-3.5%
Barrick Gold Corp ($ABX)18.3%-0.7%-24.6%-6.4%-9.7%

Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
VMS Ventures Inc ($VMS)86.7x4.7x
Ur-Energy Inc ($URE)55.1x
Katanga Mining Ltd ($KAT)0.4x19.4x3.3x18.8x
HudBay Minerals Inc ($HBM)-2.8x-4.8x2.0x14.0x
Imperial Metals Corp ($III)-0.1x1.5x4.9x12.9x
Median (95 companies)-0.1x0.3x0.8x0.9x1.7x