Pan American Silver Corp reports 11.4% CAPEX growth while 10.3% Revenue decline
18.02.2016 • About Pan American Silver Corp (
$PAA) • By InTwits
Pan American Silver Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pan American Silver Corp doesn't have a profitable business model yet: 2015 ROIC is -13.1%
- The company operates at negative EBITDA Margin: -9.8%
- Pan American Silver Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -3.2% for the sames years0
- Pan American Silver Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.9%. At the same time it's in pair with industry average of 90.0%.
- CAPEX is quite volatile: 475 in 2015, 1,270 in 2014, 598 in 2013, 250 in 2012, 182 in 2011
- The company has unprofitable business model: ROIC is at -13.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Pan American Silver Corp ($PAA) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 855.3 | 928.6 | 824.5 | 751.9 | 674.7 | -10.3% |
| Gross Profit | 491.9 | 408.4 | 267.4 | 8.1 | -32.1 | -497.5% |
| SG&A | 18.3 | 20.8 | 17.6 | 17.9 | 18.0 | 0.7% |
| EBITDA | 455.3 | 255.7 | -302.7 | -470.5 | -65.9 | -86.0% |
| Net Income | 352.5 | 78.2 | -445.9 | -545.6 | -226.7 | -58.5% |
Balance Sheet
|
|---|
| Cash | 262.9 | 346.2 | 249.9 | 146.2 | 134.0 | -8.4% |
| Short Term Debt | 20.8 | 12.5 | 4.4 | 38.8 | 21.8 | -43.8% |
| Long Term Debt | 10.8 | 65.5 | 40.0 | 4.0 | 38.0 | 838.6% |
Cash flow
|
|---|
| Capex | 118.9 | 159.9 | 159.4 | 131.8 | 146.7 | 11.4% |
Ratios
|
|---|
| Revenue growth | 32.3% | 8.6% | -11.2% | -8.8% | -10.3% | |
| EBITDA growth | 60.1% | -43.9% | -218.4% | 55.4% | -86.0% | |
| Gross Margin | 57.5% | 44.0% | 32.4% | 1.1% | -4.8% | -5.8% |
| EBITDA Margin | 53.2% | 27.5% | -36.7% | -62.6% | -9.8% | 52.8% |
| Net Income Margin | 41.2% | 8.4% | -54.1% | -72.6% | -33.6% | 39.0% |
| SG&A, % of revenue | 2.1% | 2.2% | 2.1% | 2.4% | 2.7% | 0.3% |
| CAPEX, % of revenue | 13.9% | 17.2% | 19.3% | 17.5% | 21.7% | 4.2% |
| ROIC | 23.4% | 6.1% | -15.3% | -28.5% | -13.1% | 15.4% |
| ROE | 24.0% | 3.6% | -18.2% | -29.1% | -15.8% | 13.3% |
| Net Debt/EBITDA | -0.5x | -1.0x | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 10.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 52.8 pp from -62.6% to -9.8% in 2015.
Gross Margin decreased on 5.8 pp from 1.1% to -4.8% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign surged on 39.0 pp from -72.6% to -33.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
Pan American Silver Corp's CAPEX/Revenue was 21.7% in 2015. CAPEX/Revenue increased on 4.5 pp from 17.2% in 2012 to 21.7% in 2015. It's average CAPEX/Revenue for the last three years was 19.5%.
Return on investment
The company operates at negative ROIC (-13.12%) and ROE (-15.85%). ROIC surged on 15.4 pp from -28.5% to -13.1% in 2015. ROE jumped on 13.3 pp from -29.1% to -15.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt surged on 39.6% in 2015 while cash decreased on 8.4% in 2015.
Management team
Pan American Silver Corp's CEO is Michael Steinmann. Michael Steinmann is a founder and has 2 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Pan American Silver 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 30.9% | 8.0% | -5.0% | -0.8% | 4.3% |
|---|
| Pan American Silver Corp ($PAA) | | 8.6% | -11.2% | -8.8% | -10.3% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 17.6% | 16.1% |
|---|
| Pan American Silver Corp ($PAA) | 57.5% | 44.0% | 32.4% | 1.1% | -4.8% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.7% | 9.9% | 8.0% |
|---|
| Pan American Silver Corp ($PAA) | 53.2% | 27.5% | -36.7% | -62.6% | -9.8% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.0% | 11.7% |
|---|
| Pan American Silver Corp ($PAA) | 13.9% | 17.2% | 19.3% | 17.5% | 21.7% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | 0.1% | 0.6% | -3.4% |
|---|
| Pan American Silver Corp ($PAA) | 23.4% | 6.1% | -15.3% | -28.5% | -13.1% |
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 | 0.8x | 0.9x | 1.6x |
|---|
