Canfor Corp Net Income dropped on 85.9% in 2015 while Revenue jumped on 17.3%
17.02.2016 • About Canfor Corp (
$CFP) • By InTwits
Canfor Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.0% in 2015, 15.3% in 2014, 16.2% in 2013, 9.4% in 2012, 7.5% in 2011
- Canfor Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 4.7%.
- CAPEX is quite volatile: 906 in 2015, 741 in 2014, 715 in 2013, 269 in 2012, 118 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canfor Corp ($CFP) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,421 | 2,643 | 3,195 | 3,348 | 3,925 | 17.3% |
| Gross Profit | 286 | 328 | 609 | 597 | 469 | -21.4% |
| SG&A | 57 | 61 | 68 | 79 | 90 | 14.4% |
| EBITDA | 181 | 248 | 518 | 512 | 355 | -30.6% |
| Net Income | -57 | 26 | 229 | 175 | 25 | -85.9% |
Balance Sheet
|
|---|
| Cash | 29 | 0 | 90 | 158 | 98 | -38.4% |
| Short Term Debt | 51 | 211 | 75 | 68 | 209 | 206.9% |
| Long Term Debt | 188 | 100 | 153 | 229 | 456 | 99.6% |
Cash flow
|
|---|
| Capex | 312 | 202 | 237 | 234 | 240 | 2.4% |
Ratios
|
|---|
| Revenue growth | -0.4% | 9.1% | 20.9% | 4.8% | 17.3% | |
| EBITDA growth | -48.9% | 37.1% | 108.3% | -1.1% | -30.6% | |
| Gross Margin | 11.8% | 12.4% | 19.0% | 17.8% | 12.0% | -5.9% |
| EBITDA Margin | 7.5% | 9.4% | 16.2% | 15.3% | 9.0% | -6.2% |
| Net Income Margin | -2.3% | 1.0% | 7.2% | 5.2% | 0.6% | -4.6% |
| SG&A, % of revenue | 2.4% | 2.3% | 2.1% | 2.3% | 2.3% | -0.1% |
| CAPEX, % of revenue | 12.9% | 7.6% | 7.4% | 7.0% | 6.1% | -0.9% |
| ROIC | 0.7% | 4.2% | 17.6% | 15.8% | 6.1% | -9.7% |
| ROE | -4.8% | 2.4% | 18.4% | 12.7% | 1.8% | -10.9% |
| Net Debt/EBITDA | 1.2x | 1.3x | 0.3x | 0.3x | 1.6x | 1.3x |
Revenue and profitability
Canfor Corp's Revenue jumped on 17.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.7 pp from 41.4% to 38.7% in 2015.
Gross Margin decreased on 5.9 pp from 17.8% to 12.0% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign decreased on 4.6 pp from 5.2% to 0.63% in 2015.
Capital expenditures (CAPEX) and working capital investments
Canfor Corp's CAPEX/Revenue was 6.1% in 2015. CAPEX/Revenue decreased slightly on 1.5 pp from 7.6% in 2012 to 6.1% in 2015. It's average level of CAPEX/Revenue for the last three years was 6.8%.Canfor Corp invested a big chunk of EBITDA (67.6%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (6.09%) and ROE (1.82%). ROIC decreased on 9.7 pp from 15.8% to 6.1% in 2015. ROE dropped on 10.9 pp from 12.7% to 1.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 1.9x. Net Debt / EBITDA surged on 1.3x from 0.3x to 1.6x in 2015. Debt jumped on 124% in 2015 while cash dropped on 38.4% in 2015.
Appendix 1: Peers in Basic Materials
Below you can find Canfor 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.1% | 8.0% | -5.1% | -1.1% | -1.8% |
|---|
| Canfor Corp ($CFP) | | 9.1% | 20.9% | 4.8% | 17.3% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 16.8% | 15.7% |
|---|
| Canfor Corp ($CFP) | 11.8% | 12.4% | 19.0% | 17.8% | 12.0% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.3% | 9.7% | 6.8% |
|---|
| Canfor Corp ($CFP) | 7.5% | 9.4% | 16.2% | 15.3% | 9.0% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 10.2% |
|---|
| Canfor Corp ($CFP) | 12.9% | 7.6% | 7.4% | 7.0% | 6.1% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | -0.1% | -0.1% | -3.6% |
|---|
| Canfor Corp ($CFP) | 0.7% | 4.2% | 17.6% | 15.8% | 6.1% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.9x | 0.9x | 1.7x |
|---|
| Canfor Corp ($CFP) | 1.2x | 1.3x | 0.3x | 0.3x | 1.6x |
