Amerigo Resources Ltd reports 346% CAPEX growth while 56.0% Revenue decline
25.02.2016 • About Amerigo Resources Ltd (
$ARG) • By InTwits
Amerigo Resources Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amerigo Resources Ltd is a company in decline: 2015 revenue growth was -56.0%, 5 years revenue CAGR was -19.1%
- EBITDA Margin is quite volatile: -21.2% in 2015, 6.1% in 2014, 13.0% in 2013, 5.6% in 2012, 10.6% in 2011
- Amerigo Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.9%. At the same time it's in pair with industry average of 26.4%.
- CAPEX is quite volatile: 52.4 in 2015, 11.7 in 2014, 13.4 in 2013, 23.7 in 2012, 21.3 in 2011
- The company has unprofitable business model: ROIC is at -11.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Amerigo Resources Ltd ($ARG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 166.1 | 181.8 | 143.6 | 119.6 | 52.6 | -56.0% |
| Gross Profit | 9.8 | -1.1 | 6.0 | 6.6 | -13.0 | -298.2% |
| SG&A | | | | | 3.0 | |
| EBITDA | 17.6 | 10.1 | 18.7 | 7.2 | -11.2 | -254.2% |
| Net Income | 8.7 | -8.2 | 1.0 | -10.7 | -16.9 | 58.2% |
Balance Sheet
|
|---|
| Cash | 20.8 | 9.3 | 13.1 | 18.3 | 9.0 | -50.7% |
| Short Term Debt | 3.9 | 1.5 | 0.0 | 0.0 | 18.0 | |
| Long Term Debt | 0.8 | 0.0 | 0.0 | 0.0 | 54.7 | |
Cash flow
|
|---|
| Capex | 21.3 | 23.7 | 13.4 | 11.7 | 52.4 | 346.3% |
Ratios
|
|---|
| Revenue growth | 9.2% | 9.4% | -21.0% | -16.7% | -56.0% | |
| EBITDA growth | -40.1% | -42.6% | 84.6% | -61.2% | -254.2% | |
| Gross Margin | 5.9% | -0.6% | 4.2% | 5.5% | -24.8% | -30.3% |
| EBITDA Margin | 10.6% | 5.6% | 13.0% | 6.1% | -21.2% | -27.3% |
| Net Income Margin | 5.2% | -4.5% | 0.7% | -8.9% | -32.2% | -23.2% |
| SG&A, % of revenue | | | | | 5.7% | 5.7% |
| CAPEX, % of revenue | 12.9% | 13.0% | 9.3% | 9.8% | 99.6% | 89.7% |
| ROIC | 1.6% | -3.8% | 1.3% | -2.8% | -11.0% | -8.2% |
| ROE | 5.8% | -6.0% | 0.8% | -9.2% | -16.4% | -7.2% |
| Net Debt/EBITDA | -0.9x | -0.8x | -0.7x | -2.5x | | 2.5x |
Revenue and profitability
The company's Revenue dropped on 56.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 27.3 pp from 6.1% to -21.2% in 2015.
Gross Margin dropped on 30.3 pp from 5.5% to -24.8% in 2015.
Net Income marign dropped on 23.2 pp from -8.9% to -32.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 99.6% in 2015. Amerigo Resources Ltd's CAPEX/Revenue jumped on 86.5 pp from 13.0% in 2012 to 99.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 39.6%.
Return on investment
The company operates at negative ROIC (-11.03%) and ROE (-16.41%). ROIC decreased on 8.2 pp from -2.8% to -11.0% in 2015. ROE decreased on 7.2 pp from -9.2% to -16.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is . Net Debt / EBITDA jumped on 2.5x from -2.5x to in 2015. Debt surged while cash dropped on 50.7% in 2015.
Appendix 1: Peers in Basic Materials
Below we provide Amerigo Resources Ltd 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 ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 39.5% | 8.0% | -5.0% | -0.8% | -4.4% |
|---|
| Amerigo Resources Ltd ($ARG) | | 9.4% | -21.0% | -16.7% | -56.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| Franco-Nevada Corp ($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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 31.2% | 32.0% | 21.8% | 17.6% | 15.5% |
|---|
| Amerigo Resources Ltd ($ARG) | 5.9% | -0.6% | 4.2% | 5.5% | -24.8% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| |
|---|
| Median (137 companies) | 23.3% | 18.6% | 11.3% | 9.9% | 6.8% |
|---|
| Amerigo Resources Ltd ($ARG) | 10.6% | 5.6% | 13.0% | 6.1% | -21.2% |
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% | 0.5% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.5% | 16.3% | 15.7% |
|---|
| Amerigo Resources Ltd ($ARG) | 12.9% | 13.0% | 9.3% | 9.8% | 99.6% |
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 ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | 10.4% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | -0.1% | 0.6% | -3.6% |
|---|
| Amerigo Resources Ltd ($ARG) | 1.6% | -3.8% | 1.3% | -2.8% | -11.0% |
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 ($III) | -0.1x | 1.5x | 4.9x | 12.9x | |
| |
|---|
| Median (94 companies) | -0.0x | 0.3x | 0.9x | 0.9x | 1.4x |
|---|
| Amerigo Resources Ltd ($ARG) | -0.9x | -0.8x | -0.7x | -2.5x | |
