Wesdome Gold Mines Ltd reports 139% Net Income decline and 16.7 pp EBITDA Margin decline from 29.2% to 12.5%
29.03.2016 • About Wesdome Gold Mines Ltd (
$WDO) • By InTwits
Wesdome Gold Mines Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wesdome Gold Mines Ltd is a company in decline: 2015 revenue growth was -10.9%, 5 years revenue CAGR was -3.8%
- EBITDA Margin is quite volatile: 12.5% in 2015, 29.2% in 2014, 13.2% in 2013, 12.5% in 2012, 12.9% in 2011
- Wesdome Gold Mines Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.2%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: 7.3 in 2015, 11.1 in 2014, 11.8 in 2013, 2.3 in 2012, 0.024 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wesdome Gold Mines Ltd ($WDO) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 79.643 | 92.308 | 79.726 | 82.441 | 73.465 | -10.9% |
| Gross Profit | 73.103 | 83.968 | | | | |
| SG&A | | | | | 3.793 | |
| EBITDA | 10.266 | 11.500 | 10.502 | 24.075 | 9.171 | -61.9% |
| Net Income | 0.448 | -45.058 | -3.708 | 11.902 | -4.701 | -139.5% |
Balance Sheet
|
|---|
| Cash | 5.215 | 4.633 | 5.651 | 15.408 | 15.424 | 0.1% |
| Short Term Debt | 0.913 | 0.898 | 0.526 | 1.219 | 1.528 | 25.3% |
| Long Term Debt | 2.788 | 7.271 | 7.308 | 8.763 | 9.736 | 11.1% |
Cash flow
|
|---|
| Capex | 19.280 | 11.234 | 10.875 | 16.281 | 15.774 | -3.1% |
Ratios
|
|---|
| Revenue growth | -10.9% | 15.9% | -13.6% | 3.4% | -10.9% | |
| EBITDA growth | -53.5% | 12.0% | -8.7% | 129.2% | -61.9% | |
| Gross Margin | 91.8% | 91.0% | | | | 0.0% |
| EBITDA Margin | 12.9% | 12.5% | 13.2% | 29.2% | 12.5% | -16.7% |
| Net Income Margin | 0.6% | -48.8% | -4.7% | 14.4% | -6.4% | -20.8% |
| SG&A, % of revenue | | | | | 5.2% | 5.2% |
| CAPEX, % of revenue | 24.2% | 12.2% | 13.6% | 19.7% | 21.5% | 1.7% |
| ROIC | 2.8% | 3.0% | 3.4% | 19.4% | 2.4% | -16.9% |
| ROE | 0.4% | -42.9% | -4.4% | 13.3% | -4.8% | -18.1% |
| Net Debt/EBITDA | -0.1x | 0.3x | 0.2x | -0.2x | -0.5x | -0.2x |
Revenue and profitability
Wesdome Gold Mines Ltd's Revenue dropped on 10.9% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 16.7 pp from 29.2% to 12.5% in 2015.
Net Income marign dropped on 20.8 pp from 14.4% to -6.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Wesdome Gold Mines Ltd's CAPEX/Revenue was 21.5% in 2015. The company showed CAPEX/Revenue growth of 9.3 pp from 12.2% in 2012 to 21.5% in 2015. It's average CAPEX/Revenue for the last three years was 18.3%.Wesdome Gold Mines Ltd has spent a lot to CAPEX (172% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (2.40%) and negative ROE (-4.81%). ROIC dropped on 16.9 pp from 19.4% to 2.4% in 2015. ROE dropped on 18.1 pp from 13.3% to -4.8% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 1.2x. Net Debt / EBITDA dropped on 0.2x from -0.2x to -0.5x in 2015. Debt surged on 12.8% in 2015 while cash showed almost no change in 2015.
Appendix 1: Peers in Basic Materials
Below you can find Wesdome Gold Mines Ltd 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 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | | 97.4% | -90.6% | -97.6% | 84,715.6% |
| Golden Minerals Co ($AUM) | | 1,320.8% | -59.1% | -97.8% | 3,334.5% |
| Jemi Fibre Corp ($JFI) | | | | -27.3% | 375.3% |
| Osisko Gold Royalties Ltd ($OR) | | | | | 164.4% |
| VMS Ventures Inc ($VMS) | | | | | 139.7% |
| |
|---|
| Median (119 companies) | 2.8% | 8.0% | -5.0% | -1.1% | -4.0% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | | 15.9% | -13.6% | 3.4% | -10.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Royal Gold Inc ($RGL) | 68.9% | 71.5% | 70.6% | 57.6% | 86.0% |
| Nevsun Resources Ltd ($NSU) | 90.3% | 89.9% | 94.8% | 95.5% | 82.3% |
| 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% |
| Perseus Mining Ltd ($PRU) | | 52.5% | 50.9% | 32.0% | 53.7% |
| |
|---|
| Median (114 companies) | 30.1% | 31.5% | 21.3% | 17.2% | 15.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | | 72.8% |
| Silver Wheaton Corp ($SLW) | 84.8% | 82.6% | 75.3% | 69.6% | 65.8% |
| Royal Gold Inc ($RGL) | 86.1% | 88.2% | 88.6% | 84.4% | 65.0% |
| Franco-Nevada Corp ($FNV) | 38.6% | 62.1% | 44.6% | 72.3% | 60.8% |
| Lucara Diamond Corp ($LUC) | | 7.6% | 57.3% | 57.5% | 60.0% |
| |
|---|
| Median (119 companies) | 23.3% | 18.6% | 11.3% | 9.7% | 6.6% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 12.9% | 12.5% | 13.2% | 29.2% | 12.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Silver Wheaton Corp ($SLW) | 19.4% | 75.5% | 286.8% | 22.5% | 279.2% |
| Franco-Nevada Corp ($FNV) | 9.3% | 3.7% | 35.5% | 201.6% | 230.0% |
| Avino Silver & Gold Mines Ltd ($ASM) | | 211.7% | 5.6% | 89.8% | 163.3% |
| Amerigo Resources Ltd ($ARG) | 12.9% | 13.0% | 9.3% | 9.8% | 99.6% |
| Katanga Mining Ltd ($KAT) | 48.4% | 95.8% | 86.8% | 53.7% | 81.0% |
| |
|---|
| Median (119 companies) | 23.9% | 26.3% | 25.5% | 16.0% | 15.7% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 24.2% | 12.2% | 13.6% | 19.7% | 21.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lucara Diamond Corp ($LUC) | -7.1% | -2.9% | 41.3% | 54.7% | 39.6% |
| Canfor Pulp Products Inc ($CFX) | 103.5% | 4.9% | 13.2% | 21.3% | 24.1% |
| Supremex Inc ($SXP) | 13.9% | 14.1% | 18.5% | 16.5% | 23.4% |
| Dynacor Gold Mines Inc ($DNG) | 45.6% | 62.8% | 50.9% | 31.3% | 18.2% |
| Western Forest Products Inc ($WEF) | 7.5% | 9.0% | 25.1% | 15.7% | 16.4% |
| |
|---|
| Median (121 companies) | 7.0% | 4.9% | -0.1% | -0.1% | -4.8% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 2.8% | 3.0% | 3.4% | 19.4% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Barkerville Gold Mines Ltd ($BGM) | | | | | 38.8x |
| Copper Mountain Mining Corp ($CUM) | 17.2x | 3.9x | 5.0x | 5.4x | 30.6x |
| Resolute Forest Products Inc ($RFP) | 0.6x | 1.3x | 1.1x | 3.8x | 29.6x |
| Fortress Paper Ltd ($FTP) | 92.5x | | | | 18.8x |
| Jemi Fibre Corp ($JFI) | | | 5.5x | | 17.4x |
| |
|---|
| Median (77 companies) | -0.0x | 0.3x | 0.9x | 0.9x | 1.4x |
|---|
| Wesdome Gold Mines Ltd ($WDO) | -0.1x | 0.3x | 0.2x | -0.2x | -0.5x |
