New Gold Inc reports 50.4 pp EBITDA Margin growth from -17.2% to 33.2% in 2015 while 1.8% Revenue decline
17.02.2016 • About New Gold Inc (
$NGD) • By InTwits
New Gold Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- New Gold Inc doesn't have a profitable business model yet: 2015 ROIC is -0.1%
- EBITDA Margin is quite volatile: 33.2% in 2015, -17.2% in 2014, 0.5% in 2013, 49.3% in 2012, 49.4% in 2011
- New Gold Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 51.0%. At the same time it's a lot of higher than industry average of 28.4%.
- CAPEX is quite volatile: 7.0 in 2015, 10.7 in 2014, 0.018 in 2013, 0.0050 in 2012, 0 in 2011
- The company has unprofitable business model: ROIC is at -0.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
New Gold Inc ($NGD) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 695.9 | 791.3 | 779.7 | 726.0 | 712.9 | -1.8% |
| EBITDA | 344.0 | 390.1 | 3.6 | -125.1 | 236.7 | -289.2% |
| Net Income | 179.0 | 199.0 | -191.2 | -477.1 | -201.4 | -57.8% |
Balance Sheet
|
|---|
| Cash | 309.4 | 687.8 | 414.4 | 370.5 | 335.5 | -9.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 251.7 | 847.8 | 862.5 | 874.3 | 787.6 | -9.9% |
Cash flow
|
|---|
| Capex | 413.6 | 516.0 | 289.3 | 279.3 | 389.5 | 39.5% |
Ratios
|
|---|
| Revenue growth | 31.2% | 13.7% | -1.5% | -6.9% | -1.8% | |
| EBITDA growth | 53.9% | 13.4% | -99.1% | -3,575.0% | -289.2% | |
| EBITDA Margin | 49.4% | 49.3% | 0.5% | -17.2% | 33.2% | 50.4% |
| Net Income Margin | 25.7% | 25.1% | -24.5% | -65.7% | -28.3% | 37.5% |
| CAPEX, % of revenue | 59.4% | 65.2% | 37.1% | 38.5% | 54.6% | 16.2% |
| ROIC | 11.7% | 8.7% | -4.7% | -9.4% | -0.1% | 9.3% |
| ROE | 9.4% | 8.0% | -7.1% | -19.1% | -9.2% | 9.9% |
| Net Debt/EBITDA | -0.2x | 0.4x | 124.5x | | 1.9x | 1.9x |
Revenue and profitability
New Gold Inc's Revenue decreased slightly on 1.8% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 50.4 pp from -17.2% to 33.2% in 2015.
Net Income marign surged on 37.5 pp from -65.7% to -28.3% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 New Gold Inc had CAPEX/Revenue of 54.6%. The company showed big decline in CAPEX/Revenue of 10.6 pp from 65.2% in 2012 to 54.6% in 2015. It's average CAPEX/Revenue for the last three years was 43.4%.The company has spent a lot to CAPEX (165% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-0.14%) and ROE (-9.22%). ROIC increased on 9.3 pp from -9.4% to -0.14% in 2015. ROE increased on 9.9 pp from -19.1% to -9.2% in 2015.
Leverage (Debt)
Debt level is 1.9x Net Debt / EBITDA and 3.3x Debt / EBITDA. Net Debt / EBITDA jumped1.9x from to 1.9x in 2015. Debt decreased on 9.9% in 2015 while cash decreased on 9.4% in 2015.
Appendix 1: Peers in Basic Materials
Below we provide New Gold 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.1% | 8.0% | -5.1% | -0.8% | 0.6% |
|---|
| New Gold Inc ($NGD) | | 13.7% | -1.5% | -6.9% | -1.8% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (134 companies) | 30.7% | 31.8% | 21.3% | 17.2% | 15.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($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% | 11.7% | 9.9% | 6.8% |
|---|
| New Gold Inc ($NGD) | 49.4% | 49.3% | 0.5% | -17.2% | 33.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($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% |
|---|
| New Gold Inc ($NGD) | 59.4% | 65.2% | 37.1% | 38.5% | 54.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($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% | -3.6% |
|---|
| New Gold Inc ($NGD) | 11.7% | 8.7% | -4.7% | -9.4% | -0.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($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 (95 companies) | -0.0x | 0.3x | 0.7x | 0.9x | 1.6x |
|---|
