Endeavour Mining Corp reports 64.8 pp EBITDA Margin growth from -38.2% to 26.5% in 2015 while 10.4% Revenue decline
03.03.2016 • About Endeavour Mining Corp (
$EDV) • By InTwits
Endeavour Mining Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Endeavour Mining Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -16.5% for the sames years0
- Endeavour Mining Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 26.6%. At the same time it's in pair with industry average of 26.9%.
- CAPEX is quite volatile: 92.6 in 2015, 117 in 2014, 214 in 2013, 122 in 2012, 20.1 in 2011
- The company has business model with low profitability: ROIC is at 7.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Endeavour Mining Corp ($EDV) key annual financial indicators
| mln. | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 147.2 | 365.3 | 443.3 | 583.6 | 522.7 | -10.4% |
| Gross Profit | 60.6 | 94.9 | 11.1 | 75.9 | 98.7 | 30.1% |
| SG&A | 17.5 | 21.7 | 21.5 | 21.7 | 22.1 | 1.7% |
| EBITDA | 43.8 | 130.8 | -431.0 | -223.2 | 138.6 | -162.1% |
| Net Income | -23.8 | -15.5 | -332.5 | -273.7 | 18.2 | -106.7% |
Balance Sheet
|
|---|
| Cash | 115.3 | 105.9 | 73.3 | 62.2 | 109.5 | 76.1% |
| Short Term Debt | 0.6 | 1.8 | 1.1 | 4.3 | 4.4 | 2.3% |
| Long Term Debt | 100.2 | 201.8 | 286.9 | 302.9 | 234.6 | -22.6% |
Cash flow
|
|---|
| Capex | 20.1 | 121.7 | 213.6 | 117.1 | 92.6 | -20.9% |
Ratios
|
|---|
| Revenue growth | -7.0% | 148.1% | 21.4% | 31.6% | -10.4% | |
| EBITDA growth | -65.3% | 198.8% | -429.6% | -48.2% | -162.1% | |
| Gross Margin | 41.2% | 26.0% | 2.5% | 13.0% | 18.9% | 5.9% |
| EBITDA Margin | 29.7% | 35.8% | -97.2% | -38.2% | 26.5% | 64.8% |
| Net Income Margin | -16.1% | -4.2% | -75.0% | -46.9% | 3.5% | 50.4% |
| SG&A, % of revenue | 11.9% | 5.9% | 4.8% | 3.7% | 4.2% | 0.5% |
| CAPEX, % of revenue | 13.7% | 33.3% | 48.2% | 20.1% | 17.7% | -2.3% |
| ROIC | 3.6% | 4.8% | -39.8% | -34.3% | 7.2% | 41.5% |
| ROE | -4.7% | -1.8% | -36.9% | -45.6% | 3.5% | 49.1% |
| Net Debt/EBITDA | -0.3x | 0.7x | | | 0.9x | 0.9x |
Revenue and profitability
The company's Revenue dropped on 10.4% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 64.8 pp from -38.2% to 26.5% in 2015.
Gross Margin increased on 5.9 pp from 13.0% to 18.9% in 2015. SG&A as a % of Revenue increased slightly on 0.50 pp from 3.7% to 4.2% in 2015.
Net Income marign jumped on 50.4 pp from -46.9% to 3.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
Endeavour Mining Corp's CAPEX/Revenue was 17.7% in 2015. Endeavour Mining Corp showed big decline in CAPEX/Revenue of 15.6 pp from 33.3% in 2012 to 17.7% in 2015. It's average CAPEX/Revenue for the last three years was 28.7%.Battling declining revenue Endeavour Mining Corp invested a large share of EBITDA (66.8%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (7.16%) and ROE (3.54%). ROIC jumped on 41.5 pp from -34.3% to 7.2% in 2015. ROE jumped on 49.1 pp from -45.6% to 3.5% in 2015.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA jumped0.9x from to 0.9x in 2015. Debt dropped on 22.2% in 2015 while cash surged on 76.1% in 2015.
Appendix 1: Peers in Basic Materials
Below you can find Endeavour Mining Corp 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% | 42.7% |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 43.9% | 8.0% | -5.1% | -1.1% | -4.9% |
|---|
| Endeavour Mining Corp ($EDV) | | 148.1% | 21.4% | 31.6% | -10.4% |
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 ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | 80.3% |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | 60.9% |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 32.0% | 21.8% | 17.6% | 15.4% |
|---|
| Endeavour Mining Corp ($EDV) | 41.2% | 26.0% | 2.5% | 13.0% | 18.9% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.7% | 9.9% | 6.9% |
|---|
| Endeavour Mining Corp ($EDV) | 29.7% | 35.8% | -97.2% | -38.2% | 26.5% |
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% | 0.5% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 24.1% | 26.3% | 25.2% | 16.0% | 13.1% |
|---|
| Endeavour Mining Corp ($EDV) | 13.7% | 33.3% | 48.2% | 20.1% | 17.7% |
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 ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 7.0% | 4.9% | 0.1% | 0.6% | -3.5% |
|---|
| Endeavour Mining Corp ($EDV) | 3.6% | 4.8% | -39.8% | -34.3% | 7.2% |
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 | 6.7x |
| 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 | 1.4x |
|---|
