Western Forest Products Inc CAPEX surged on 24.4% in 2015 and Revenue increased on 4.3%
17.02.2016 • About Western Forest Products Inc (
$WEF) • By InTwits
Western Forest Products Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Western Forest Products Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's in pair with industry average of 1.8%.
- CAPEX is quite volatile: 62.1 in 2015, 49.9 in 2014, 59 in 2013, 32 in 2012, 19.4 in 2011
- The company has highly profitable business model: ROIC is at 16.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Western Forest Products Inc ($WEF) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 854 | 925 | 978 | 1,037 | 1,082 | 4.3% |
| Gross Profit | 62 | 53 | 130 | 110 | 105 | -4.0% |
| SG&A | 27 | 29 | 33 | 32 | 22 | -31.1% |
| EBITDA | 56 | 62 | 134 | 101 | 109 | 8.0% |
| Net Income | 24 | 28 | 125 | 68 | 74 | 7.7% |
Balance Sheet
|
|---|
| Cash | 15 | 19 | 6 | 2 | 9 | 422.2% |
| Short Term Debt | 9 | 0 | 0 | 7 | 0 | -100.0% |
| Long Term Debt | 59 | 34 | 89 | 73 | 63 | -13.4% |
Cash flow
|
|---|
| Capex | 19 | 32 | 59 | 50 | 62 | 24.4% |
Ratios
|
|---|
| Revenue growth | 27.8% | 8.4% | 5.6% | 6.1% | 4.3% | |
| EBITDA growth | -29.7% | 10.8% | 118.4% | -25.2% | 8.0% | |
| Gross Margin | 7.2% | 5.8% | 13.3% | 10.6% | 9.7% | -0.8% |
| EBITDA Margin | 6.5% | 6.6% | 13.7% | 9.7% | 10.0% | 0.3% |
| Net Income Margin | 2.8% | 3.0% | 12.8% | 6.6% | 6.8% | 0.2% |
| SG&A, % of revenue | 3.1% | 3.1% | 3.4% | 3.1% | 2.1% | -1.1% |
| CAPEX, % of revenue | 2.3% | 3.5% | 6.0% | 4.8% | 5.7% | 0.9% |
| ROIC | 7.5% | 9.0% | 25.1% | 15.7% | 16.4% | 0.7% |
| ROE | 7.1% | 8.1% | 33.9% | 17.3% | 17.1% | -0.2% |
| Net Debt/EBITDA | 0.9x | 0.2x | 0.6x | 0.8x | 0.5x | -0.3x |
Revenue and profitability
Western Forest Products Inc's Revenue increased on 4.3% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin decreased slightly on 0.85 pp from 10.6% to 9.7% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 3.1% to 2.1% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Western Forest Products Inc had CAPEX/Revenue of 5.7%. Western Forest Products Inc showed CAPEX/Revenue growth of 2.3 pp from 3.5% in 2012 to 5.7% in 2015. It's average CAPEX/Revenue for the last three years was 5.5%.The company maintained rich investment policy and has spent a big chunk of EBITDA (57.2%) to CAPEX.
Return on investment
The company operates at good ROIC (16.41%) and ROE (17.06%). ROIC increased slightly on 0.70 pp from 15.7% to 16.4% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 0.8x to 0.5x in 2015. Debt dropped on 20.7% in 2015 while cash surged on 422% in 2015.
Management team
Donald Demens "Don" is a the company's CEO. Donald Demens "Don" is a founder and has spent 5 years at the company. Western Forest Products Inc's CFO is Stephen Williams "Steve". Stephen Williams "Steve" has 4 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Western Forest Products 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.1% | 8.0% | -5.1% | -1.1% | -1.8% |
|---|
| Western Forest Products Inc ($WEF) | | 8.4% | 5.6% | 6.1% | 4.3% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 17.6% | 15.7% |
|---|
| Western Forest Products Inc ($WEF) | 7.2% | 5.8% | 13.3% | 10.6% | 9.7% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.3% | 9.9% | 6.8% |
|---|
| Western Forest Products Inc ($WEF) | 6.5% | 6.6% | 13.7% | 9.7% | 10.0% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 10.2% |
|---|
| Western Forest Products Inc ($WEF) | 2.3% | 3.5% | 6.0% | 4.8% | 5.7% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -3.6% |
|---|
| Western Forest Products Inc ($WEF) | 7.5% | 9.0% | 25.1% | 15.7% | 16.4% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.9x | 0.9x | 1.7x |
|---|
| Western Forest Products Inc ($WEF) | 0.9x | 0.2x | 0.6x | 0.8x | 0.5x |
