First Majestic Silver Corp reports 45.4% CAPEX decline and 10.6% Revenue decline
25.02.2016 • About First Majestic Silver Corp (
$FR) • By InTwits
First Majestic Silver Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- First Majestic Silver Corp doesn't have a profitable business model yet: 2015 ROIC is -17.6%
- The company operates at negative EBITDA Margin: -20.3%
- EBITDA Margin is quite volatile: -20.3% in 2015, -12.6% in 2014, 26.5% in 2013, 53.6% in 2012, 63.4% in 2011
- First Majestic Silver Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 43.2%. At the same time it's a lot of higher than industry average of 26.4%.
- CAPEX is quite volatile: 56.9 in 2015, 104 in 2014, 94.4 in 2013, 175 in 2012, 95.9 in 2011
- The company has unprofitable business model: ROIC is at -17.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
First Majestic Silver Corp ($FR) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 245.5 | 247.2 | 251.3 | 245.5 | 219.4 | -10.6% |
| Gross Profit | 178.7 | 167.4 | 92.3 | 90.6 | 83.8 | -7.6% |
| SG&A | 16.0 | 21.8 | 24.9 | 19.4 | 17.0 | -12.3% |
| EBITDA | 155.6 | 132.5 | 66.6 | -31.0 | -44.6 | 43.7% |
| Net Income | 103.6 | 88.9 | -38.2 | -61.4 | -108.4 | 76.4% |
Balance Sheet
|
|---|
| Cash | 91.2 | 111.6 | 54.8 | 40.3 | 51.0 | 26.5% |
| Short Term Debt | 5.1 | 15.5 | 33.9 | 37.8 | 44.5 | 17.7% |
| Long Term Debt | 9.8 | 14.2 | 20.3 | 15.5 | 7.4 | -52.4% |
Cash flow
|
|---|
| Capex | 95.9 | 175.1 | 94.4 | 104.3 | 56.9 | -45.4% |
Ratios
|
|---|
| Revenue growth | 108.2% | 0.7% | 1.7% | -2.3% | -10.6% | |
| EBITDA growth | 207.1% | -14.8% | -49.7% | -146.6% | 43.7% | |
| Gross Margin | 72.8% | 67.7% | 36.7% | 36.9% | 38.2% | 1.3% |
| EBITDA Margin | 63.4% | 53.6% | 26.5% | -12.6% | -20.3% | -7.7% |
| Net Income Margin | 42.2% | 36.0% | -15.2% | -25.0% | -49.4% | -24.4% |
| SG&A, % of revenue | 6.5% | 8.8% | 9.9% | 7.9% | 7.7% | -0.2% |
| CAPEX, % of revenue | 39.1% | 70.9% | 37.6% | 42.5% | 25.9% | -16.5% |
| ROIC | 43.7% | 19.1% | 3.1% | -12.7% | -17.6% | -4.9% |
| ROE | 36.9% | 18.8% | -6.6% | -11.3% | -20.4% | -9.1% |
| Net Debt/EBITDA | -0.5x | -0.6x | -0.0x | | | 0.0x |
Revenue and profitability
First Majestic Silver Corp's Revenue dropped on 10.6% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.9 pp from 4.7% to 10.6% in FY2015.
Gross Margin increased slightly on 1.3 pp from 36.9% to 38.2% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 24.4 pp from -25.0% to -49.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 25.9% in 2015. First Majestic Silver Corp showed big decline in CAPEX/Revenue of 44.9 pp from 70.9% in 2012 to 25.9% in 2015. Average CAPEX/Revenue for the last three years was 35.3%.
Return on investment
The company operates at negative ROIC (-17.62%) and ROE (-20.36%). ROIC decreased on 4.9 pp from -12.7% to -17.6% in 2015. ROE decreased on 9.1 pp from -11.3% to -20.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt decreased on 2.6% in 2015 while cash surged on 26.5% in 2015.
Management team
The company's CEO is Keith Neumeyer. Keith Neumeyer is a founder and has 16 years tenure at the company. Raymond L Polman is a First Majestic Silver Corp's CFO. Raymond L Polman has spent 11 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide First Majestic 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 ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 39.5% | 8.5% | -5.1% | -0.8% | -4.4% |
|---|
| First Majestic Silver Corp ($FR) | | 0.7% | 1.7% | -2.3% | -10.6% |
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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 16.8% | 15.3% |
|---|
| First Majestic Silver Corp ($FR) | 72.8% | 67.7% | 36.7% | 36.9% | 38.2% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.3% | 9.9% | 6.8% |
|---|
| First Majestic Silver Corp ($FR) | 63.4% | 53.6% | 26.5% | -12.6% | -20.3% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 15.7% |
|---|
| First Majestic Silver Corp ($FR) | 39.1% | 70.9% | 37.6% | 42.5% | 25.9% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | -0.1% | 0.6% | -3.6% |
|---|
| First Majestic Silver Corp ($FR) | 43.7% | 19.1% | 3.1% | -12.7% | -17.6% |
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 | 0.9x | 0.9x | 1.4x |
|---|
