Cerro Grande Mining Corp reports 211% CAPEX growth while 36.0% Revenue decline
04.03.2016 • About Cerro Grande Mining Corp (
$CEG) • By InTwits
Cerro Grande Mining Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cerro Grande Mining Corp is a company in decline: FY2015 revenue growth was -36.0%, 5 years revenue CAGR was -3.9%
- The company operates at negative EBITDA Margin: -113.2%
- Cerro Grande Mining Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -7.2% for the sames years0
- Cerro Grande Mining Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.3%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 1.2 in FY2015, 0.40 in FY2014, 3.2 in FY2013, 2.8 in FY2012, 5.6 in FY2011
- The company has unprofitable business model: ROIC is at -250.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cerro Grande Mining Corp ($CEG) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 24.289 | 27.445 | 18.778 | 14.064 | 8.995 | -36.0% |
| SG&A | | | | | 2.765 | |
| EBITDA | 5.754 | 0.015 | 0.105 | -2.451 | -10.179 | 315.3% |
| Net Income | 3.187 | -3.712 | -6.220 | -5.147 | -12.905 | 150.7% |
Balance Sheet
|
|---|
| Cash | 1.750 | 1.336 | 0.053 | 0.087 | 0.252 | 189.7% |
| Short Term Debt | 0.238 | 0.538 | 0.813 | 0.732 | 0.209 | -71.4% |
| Long Term Debt | 0.270 | 1.019 | 1.879 | 0.855 | 0.637 | -25.5% |
Cash flow
|
|---|
| Capex | 5.629 | 2.781 | 3.161 | 0.397 | 1.236 | 211.3% |
Ratios
|
|---|
| Revenue growth | 121.6% | 13.0% | -31.6% | -25.1% | -36.0% | |
| EBITDA growth | -398.3% | -99.7% | 600.0% | -2,434.3% | 315.3% | |
| EBITDA Margin | 23.7% | 0.1% | 0.6% | -17.4% | -113.2% | -95.7% |
| Net Income Margin | 13.1% | -13.5% | -33.1% | -36.6% | -143.5% | -106.9% |
| SG&A, % of revenue | | | | | 30.7% | 30.7% |
| CAPEX, % of revenue | 23.2% | 10.1% | 16.8% | 2.8% | 13.7% | 10.9% |
| ROIC | 19.4% | -11.1% | -25.5% | -38.6% | -250.0% | -211.4% |
| ROE | 19.2% | -19.6% | -40.4% | -46.1% | | 46.1% |
| Net Debt/EBITDA | -0.2x | 14.7x | 25.1x | | | 0.0x |
Revenue and profitability
Cerro Grande Mining Corp's Revenue dropped on 36.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.61 pp from 6.8% to 7.4% in FY2015.
Net Income marign dropped on 107 pp from -36.6% to -143% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Cerro Grande Mining Corp had CAPEX/Revenue of 13.7%. Cerro Grande Mining Corp's CAPEX/Revenue increased on 3.6 pp from 10.1% in FY2012 to 13.7% in FY2015. Average CAPEX/Revenue for the last three years was 11.1%.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt dropped on 46.7% in FY2015 while cash surged on 190% in FY2015.
Appendix 1: Peers in Basic Materials
Below you can find Cerro Grande 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 ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 40.9% | 8.0% | -5.0% | -0.8% | -5.4% |
|---|
| Cerro Grande Mining Corp ($CEG) | | 13.0% | -31.6% | -25.1% | -36.0% |
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 ($LIF) | 80.2% | 80.2% | 80.2% | 80.2% | 80.3% |
| Lucara Diamond Corp ($LUC) | | 42.5% | 57.4% | 66.7% | 60.9% |
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (134 companies) | 30.7% | 31.8% | 21.3% | 17.2% | 15.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($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% | 38.6% |
| |
|---|
| Median (137 companies) | 22.0% | 18.6% | 11.7% | 9.9% | 6.9% |
|---|
| Cerro Grande Mining Corp ($CEG) | 23.7% | 0.1% | 0.6% | -17.4% | -113.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($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% | 14.4% |
|---|
| Cerro Grande Mining Corp ($CEG) | 23.2% | 10.1% | 16.8% | 2.8% | 13.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($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) | 5.4% | 4.9% | 0.1% | 0.6% | -3.5% |
|---|
| Cerro Grande Mining Corp ($CEG) | 19.4% | -11.1% | -25.5% | -38.6% | -250.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VMS Ventures Inc ($VMS) | | | | 86.7x | 4.7x |
| Ur-Energy Inc ($URE) | | | | 55.1x | 6.7x |
| Katanga Mining Ltd ($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 | 0.7x | 0.9x | 1.4x |
|---|
