OceanaGold Corp reports 52.4% Net Income decline and 9.8% Revenue decline
18.02.2016 • About OceanaGold Corp (
$OGC) • By InTwits
OceanaGold Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- OceanaGold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 37.7%. At the same time it's a lot of higher than industry average of 28.1%.
- CAPEX is quite volatile: 142 in 2015, 109 in 2014, 160 in 2013, 290 in 2012, 147 in 2011
- The company has potentially unprofitable business model: ROIC is at 6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
OceanaGold Corp ($OGC) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 395.6 | 385.4 | 553.6 | 563.3 | 508.0 | -9.8% |
| Gross Profit | 178.8 | 159.4 | 293.0 | 273.4 | 242.9 | -11.2% |
| SG&A | 14.5 | 14.9 | 28.4 | 34.5 | 45.3 | 31.2% |
| EBITDA | 164.3 | 144.5 | 264.5 | 238.9 | 197.6 | -17.3% |
| Net Income | 44.2 | 20.7 | -47.9 | 111.5 | 53.1 | -52.4% |
Balance Sheet
|
|---|
| Cash | 170.0 | 96.5 | 24.8 | 51.2 | 185.5 | 262.1% |
| Short Term Debt | 72.7 | 130.2 | 67.4 | 15.0 | 10.8 | -27.9% |
| Long Term Debt | 153.1 | 136.7 | 126.5 | 103.1 | 187.9 | 82.3% |
Cash flow
|
|---|
| Capex | 146.6 | 290.3 | 160.0 | 108.5 | 142.3 | 31.1% |
Ratios
|
|---|
| Revenue growth | 29.4% | -2.6% | 43.6% | 1.8% | -9.8% | |
| EBITDA growth | 16.4% | -12.0% | 83.1% | -9.7% | -17.3% | |
| Gross Margin | 45.2% | 41.4% | 52.9% | 48.5% | 47.8% | -0.7% |
| EBITDA Margin | 41.5% | 37.5% | 47.8% | 42.4% | 38.9% | -3.5% |
| Net Income Margin | 11.2% | 5.4% | -8.6% | 19.8% | 10.4% | -9.4% |
| SG&A, % of revenue | 3.7% | 3.9% | 5.1% | 6.1% | 8.9% | 2.8% |
| CAPEX, % of revenue | 37.1% | 75.3% | 28.9% | 19.3% | 28.0% | 8.7% |
| ROIC | 11.3% | 6.4% | 15.8% | 13.7% | 6.8% | -6.9% |
| ROE | 9.7% | 3.8% | -8.0% | 17.3% | 5.8% | -11.5% |
| Net Debt/EBITDA | 0.3x | 1.2x | 0.6x | 0.3x | 0.1x | -0.2x |
Revenue and profitability
OceanaGold Corp's Revenue decreased on 9.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.5 pp from 42.4% to 38.9% in 2015.
Gross Margin decreased slightly on 0.72 pp from 48.5% to 47.8% in 2015. SG&A as a % of Revenue increased on 2.8 pp from 6.1% to 8.9% in 2015.
Net Income marign decreased on 9.4 pp from 19.8% to 10.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 OceanaGold Corp had CAPEX/Revenue of 28.0%. The company's CAPEX/Revenue dropped on 47.3 pp from 75.3% in 2012 to 28.0% in 2015. For the last three years the average CAPEX/Revenue was 25.4%.The company invested a big chunk of EBITDA (72.0%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (6.78%) and ROE (5.78%). ROIC decreased on 6.9 pp from 13.7% to 6.8% in 2015. ROE dropped on 11.5 pp from 17.3% to 5.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.2x from 0.3x to 0.1x in 2015. Debt jumped on 68.3% in 2015 while cash surged on 262% in 2015.
Management team
The company's CEO is Michael F Wilkes "Mick". Michael F Wilkes "Mick" is a founder and has 7 years tenure at the company. Mark Chamberlain is a OceanaGold Corp's CFO. Mark Chamberlain has spent 7 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide OceanaGold 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.9% | 8.5% | -5.1% | -1.1% | 4.3% |
|---|
| OceanaGold Corp ($OGC) | | -2.6% | 43.6% | 1.8% | -9.8% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 15.6% |
|---|
| OceanaGold Corp ($OGC) | 45.2% | 41.4% | 52.9% | 48.5% | 47.8% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.3% | 9.7% | 6.9% |
|---|
| OceanaGold Corp ($OGC) | 41.5% | 37.5% | 47.8% | 42.4% | 38.9% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 11.7% |
|---|
| OceanaGold Corp ($OGC) | 37.1% | 75.3% | 28.9% | 19.3% | 28.0% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | -0.1% | -3.5% |
|---|
| OceanaGold Corp ($OGC) | 11.3% | 6.4% | 15.8% | 13.7% | 6.8% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.1x | 0.3x | 0.9x | 0.9x | 1.6x |
|---|
| OceanaGold Corp ($OGC) | 0.3x | 1.2x | 0.6x | 0.3x | 0.1x |
