Endeavour Silver Corp reports 14.6% CAPEX decline and 6.8% Revenue decline
04.03.2016 • About Endeavour Silver Corp (
$EDR) • By InTwits
Endeavour Silver Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Endeavour Silver Corp doesn't have a profitable business model yet: 2015 ROIC is -81.3%
- The company operates at negative EBITDA Margin: -49.4%
- EBITDA Margin is quite volatile: -49.4% in 2015, -18.7% in 2014, -17.7% in 2013, 40.2% in 2012, 50.6% in 2011
- Endeavour Silver Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -2.8%0
- Endeavour Silver Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.2%. At the same time it's in pair with industry average of 27.0%.
- CAPEX is quite volatile: 35.7 in 2015, 41.7 in 2014, 88.5 in 2013, 66.2 in 2012, 46.9 in 2011
- The company has unprofitable business model: ROIC is at -81.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.8x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Endeavour Silver Corp ($EDR) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 128.0 | 208.1 | 276.8 | 196.9 | 183.6 | -6.8% |
| Gross Profit | 88.6 | 116.3 | 64.6 | 17.3 | 18.4 | 6.5% |
| SG&A | 11.0 | 13.1 | 11.6 | 9.7 | 7.7 | -20.3% |
| EBITDA | 64.8 | 83.6 | -49.0 | -36.8 | -90.7 | 146.2% |
| Net Income | 18.8 | 42.1 | -89.5 | -74.5 | -149.9 | 101.2% |
Balance Sheet
|
|---|
| Cash | 75.4 | 18.6 | 35.0 | 31.0 | 20.4 | -34.2% |
| Short Term Debt | 0.0 | 9.0 | 33.0 | 29.0 | 23.2 | -20.1% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 46.9 | 66.2 | 88.5 | 41.7 | 35.7 | -14.6% |
Ratios
|
|---|
| Revenue growth | 48.0% | 62.6% | 33.0% | -28.9% | -6.8% | |
| EBITDA growth | 111.1% | 29.0% | -158.6% | -24.8% | 146.2% | |
| Gross Margin | 69.2% | 55.9% | 23.4% | 8.8% | 10.0% | 1.3% |
| EBITDA Margin | 50.6% | 40.2% | -17.7% | -18.7% | -49.4% | -30.7% |
| Net Income Margin | 14.7% | 20.2% | -32.3% | -37.8% | -81.7% | -43.8% |
| SG&A, % of revenue | 8.6% | 6.3% | 4.2% | 4.9% | 4.2% | -0.7% |
| CAPEX, % of revenue | 36.7% | 31.8% | 32.0% | 21.2% | 19.4% | -1.8% |
| ROIC | 25.7% | 16.6% | -26.9% | -31.7% | -81.3% | -49.6% |
| ROE | 11.4% | 15.6% | -30.0% | -33.2% | -123.3% | -90.1% |
| Net Debt/EBITDA | -1.2x | -0.1x | | | | 0.0x |
Revenue and profitability
Endeavour Silver Corp's Revenue decreased on 6.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 56.2 pp from 19.2% to 75.4% in 2015.
Gross Margin increased slightly on 1.3 pp from 8.8% to 10.0% in 2015. SG&A as a % of Revenue decreased slightly on 0.72 pp from 4.9% to 4.2% in 2015.
Net Income marign dropped on 43.8 pp from -37.8% to -81.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
Endeavour Silver Corp's CAPEX/Revenue was 19.4% in 2015. Endeavour Silver Corp showed big decline in CAPEX/Revenue of 12.4 pp from 31.8% in 2012 to 19.4% in 2015. For the last three years the average CAPEX/Revenue was 24.2%.
Return on investment
The company operates at negative ROIC (-81.31%) and ROE (-123.33%). ROIC dropped on 49.6 pp from -31.7% to -81.3% in 2015. ROE dropped on 90.1 pp from -33.2% to -123% in 2015.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt dropped on 20.1% in 2015 while cash dropped on 34.2% in 2015.
Management team
The company's CEO Bradford James Cooke is a founder and has spent 16 years at the company. Endeavour Silver Corp's CFO is Daniel Dickson "Dan". Daniel Dickson "Dan" has 10 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Endeavour 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% | 42.7% |
| Nevsun Resources Ltd ($NSU) | | 3.3% | -72.5% | 256.5% | -35.7% |
| |
|---|
| Median (130 companies) | 40.9% | 8.0% | -5.1% | -0.8% | -5.4% |
|---|
| Endeavour Silver Corp ($EDR) | | 62.6% | 33.0% | -28.9% | -6.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| Franco-Nevada Corp ($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 ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| |
|---|
| Median (133 companies) | 30.1% | 31.5% | 20.7% | 17.6% | 15.5% |
|---|
| Endeavour Silver Corp ($EDR) | 69.2% | 55.9% | 23.4% | 8.8% | 10.0% |
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 ($NSU) | 81.0% | 76.8% | 54.5% | 60.4% | 38.6% |
| |
|---|
| Median (137 companies) | 22.0% | 18.4% | 11.7% | 9.9% | 6.9% |
|---|
| Endeavour Silver Corp ($EDR) | 50.6% | 40.2% | -17.7% | -18.7% | -49.4% |
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 ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | |
| |
|---|
| Median (139 companies) | 23.9% | 26.3% | 25.2% | 16.0% | 13.4% |
|---|
| Endeavour Silver Corp ($EDR) | 36.7% | 31.8% | 32.0% | 21.2% | 19.4% |
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 ($NSU) | 89.8% | 52.2% | 8.8% | 35.0% | 10.4% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| |
|---|
| Median (143 companies) | 5.4% | 4.9% | 0.1% | 0.6% | -3.5% |
|---|
| Endeavour Silver Corp ($EDR) | 25.7% | 16.6% | -26.9% | -31.7% | -81.3% |
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 |
|---|
