HudBay Minerals Inc Net Income dropped on 660% in 2015 and EBITDA Margin dropped on 23.3 pp from 10.8% to -12.5%
24.02.2016 • About HudBay Minerals Inc (
$HBM) • By InTwits
HudBay Minerals Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- HudBay Minerals Inc doesn't have a profitable business model yet: 2015 ROIC is -10.5%
- EBITDA Margin is declining: -12.5% in 2015 vs. 10.8% in 2014 vs. 35.5% in 2011
- EBITDA Margin is quite volatile: -12.5% in 2015, 10.8% in 2014, 13.7% in 2013, 25.4% in 2012, 35.5% in 2011
- HudBay Minerals Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 107.2%. At the same time it's a lot of higher than industry average of 27.4%.
- CAPEX is quite volatile: 491 in 2015, 807 in 2014, 1,003 in 2013, 546 in 2012, 250 in 2011
- The company has unprofitable business model: ROIC is at -10.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
HudBay Minerals Inc ($HBM) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 901.1 | 703.0 | 501.9 | 459.7 | 886.1 | 92.8% |
| Gross Profit | 419.0 | 269.9 | 152.2 | 51.9 | 118.4 | 127.9% |
| SG&A | 39.2 | 39.6 | 38.8 | 37.8 | 30.9 | -18.2% |
| EBITDA | 320.1 | 178.5 | 68.6 | 49.6 | -110.8 | -323.6% |
| Net Income | -155.7 | -20.8 | -98.4 | 59.2 | -331.4 | -659.9% |
Balance Sheet
|
|---|
| Cash | 884.4 | 1,343.9 | 594.1 | 153.8 | 53.9 | -65.0% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 12.7 | 69.9 | 449.3% |
| Long Term Debt | 0.0 | 482.0 | 733.3 | 837.1 | 1,205.0 | 43.9% |
Cash flow
|
|---|
| Capex | 249.7 | 546.0 | 1,003.0 | 806.9 | 490.7 | -39.2% |
Ratios
|
|---|
| Revenue growth | 18.8% | -22.0% | -28.6% | -8.4% | 92.8% | |
| EBITDA growth | 45.3% | -44.2% | -61.6% | -27.7% | -323.6% | |
| Gross Margin | 46.5% | 38.4% | 30.3% | 11.3% | 13.4% | 2.1% |
| EBITDA Margin | 35.5% | 25.4% | 13.7% | 10.8% | -12.5% | -23.3% |
| Net Income Margin | -17.3% | -3.0% | -19.6% | 12.9% | -37.4% | -50.3% |
| SG&A, % of revenue | 4.3% | 5.6% | 7.7% | 8.2% | 3.5% | -4.7% |
| CAPEX, % of revenue | 27.7% | 77.7% | 199.9% | 175.5% | 55.4% | -120.2% |
| ROIC | 11.6% | 4.7% | -0.3% | -1.0% | -10.5% | -9.5% |
| ROE | -9.0% | -1.2% | -6.2% | 3.5% | -18.4% | -21.9% |
| Net Debt/EBITDA | -2.8x | -4.8x | 2.0x | 14.0x | | -14.0x |
Revenue and profitability
The company's Revenue jumped on 92.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 20.4% to 22.6% in 2015.
Gross Margin increased on 2.1 pp from 11.3% to 13.4% in 2015. SG&A as a % of Revenue decreased on 4.7 pp from 8.2% to 3.5% in 2015.
Net Income marign dropped on 50.3 pp from 12.9% to -37.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
HudBay Minerals Inc's CAPEX/Revenue was 55.4% in 2015. The company showed big decline in CAPEX/Revenue of 22.3 pp from 77.7% in 2012 to 55.4% in 2015. Average CAPEX/Revenue for the last three years was 144%.
Return on investment
The company operates at negative ROIC (-10.46%) and ROE (-18.40%). ROIC decreased on 9.5 pp from -0.97% to -10.5% in 2015. ROE dropped on 21.9 pp from 3.5% to -18.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -9.7x and Debt / EBITDA is . Net Debt / EBITDA dropped on 14.0x from 14.0x to in 2015. Debt surged on 50.0% in 2015 while cash dropped on 65.0% in 2015.
Management team
Alan T C Hair is a HudBay Minerals Inc's CEO. Alan T C Hair is a founder and has spent 2 years at the company. HudBay Minerals Inc's CFO David Stewart Bryson has spent 9 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find HudBay Minerals Inc 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 ($NSU) | | 3.3% | -72.5% | 256.5% | |
| |
|---|
| Median (130 companies) | 37.0% | 8.5% | -5.0% | -0.8% | -4.9% |
|---|
| HudBay Minerals Inc ($HBM) | | -22.0% | -28.6% | -8.4% | 92.8% |
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% | 60.9% |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 17.6% | 15.6% |
|---|
| HudBay Minerals Inc ($HBM) | 46.5% | 38.4% | 30.3% | 11.3% | 13.4% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.3% | 9.7% | 8.2% |
|---|
| HudBay Minerals Inc ($HBM) | 35.5% | 25.4% | 13.7% | 10.8% | -12.5% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 12.5% |
|---|
| HudBay Minerals Inc ($HBM) | 27.7% | 77.7% | 199.9% | 175.5% | 55.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | 39.6% |
| CanAf Group Inc ($CAF) | 74.9% | 37.0% | 65.2% | 37.6% | 13.8% |
| 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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | 0.1% | 0.6% | -2.4% |
|---|
| HudBay Minerals Inc ($HBM) | 11.6% | 4.7% | -0.3% | -1.0% | -10.5% |
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 ($KAT) | 0.4x | 19.4x | 3.3x | 18.8x | |
| Imperial Metals Corp ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| Gran Colombia Gold Corp ($GCM) | 35.1x | 12.7x | 67.4x | 11.9x | |
| |
|---|
| Median (94 companies) | -0.0x | 0.3x | 0.7x | 0.9x | 1.4x |
|---|
| HudBay Minerals Inc ($HBM) | -2.8x | -4.8x | 2.0x | 14.0x | |
