Silvercorp Metals Inc Net Income jumped on 106% in 2016 while Revenue dropped on 16.0%
26.05.2016 • About Silvercorp Metals Inc (
$SVM) • By InTwits
Silvercorp Metals Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Silvercorp Metals Inc is a company in decline: FY2016 revenue growth was -16.0%, 5 years revenue CAGR was -8.4%
- EBITDA Margin is quite volatile: 28.9% in FY2016, -62.2% in FY2015, -37.5% in FY2014, 44.8% in FY2013, 65.1% in FY2012
- Silvercorp Metals Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 43.8%. At the same time it's a lot of higher than industry average of 24.9%.
- CAPEX is quite volatile: 36.8 in FY2016, 46.1 in FY2015, 75.2 in FY2014, 91.2 in FY2013, 70.7 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Silvercorp Metals Inc ($SVM) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 238.0 | 181.6 | 108.4 | 128.5 | 107.9 | -16.0% |
| Gross Profit | 176.8 | 108.5 | 48.4 | 54.7 | 36.0 | -34.2% |
| SG&A | 27.1 | 25.7 | 24.4 | 20.6 | 17.4 | -15.6% |
| EBITDA | 155.0 | 81.3 | -40.6 | -79.9 | 31.2 | |
| Net Income | 73.8 | 27.2 | -41.0 | -103.1 | 6.3 | |
Balance Sheet
|
|---|
| Cash | 110.0 | 72.3 | 60.6 | 60.2 | 42.0 | -30.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 70.7 | 91.2 | 75.2 | 46.1 | 36.8 | -20.1% |
Ratios
|
|---|
| Revenue growth | 42.2% | -23.7% | -40.3% | 18.5% | -16.0% | |
| EBITDA growth | 40.7% | -47.5% | -150.0% | 96.6% | -139.1% | |
| Gross Margin | 74.3% | 59.8% | 44.7% | 42.6% | 33.4% | -9.2% |
| EBITDA Margin | 65.1% | 44.8% | -37.5% | -62.2% | 28.9% | 91.1% |
| Net Income Margin | 31.0% | 15.0% | -37.8% | -80.3% | 5.9% | 86.1% |
| SG&A, % of revenue | 11.4% | 14.2% | 22.5% | 16.0% | 16.1% | 0.1% |
| CAPEX, % of revenue | 29.7% | 50.2% | 69.3% | 35.9% | 34.1% | -1.8% |
| ROIC | 28.1% | 12.6% | -11.4% | -27.5% | 3.9% | 31.4% |
| ROE | 17.7% | 6.4% | -10.6% | -35.0% | 2.7% | 37.7% |
| Net Debt/EBITDA | -0.7x | -0.9x | | | -1.3x | -1.3x |
Silvercorp Metals Inc ($SVM) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 32 | 27 | 29 | 19 | 5.2% | -27.1% | -27.7% | -4.2% |
| EBITDA | 10 | 6 | 11 | 4 | -23.5% | -62.0% | -29.6% | |
| Net Income | 2 | 2 | 3 | -2 | -16.3% | -69.1% | -39.2% | |
Balance Sheet
|
|---|
| Cash | 65 | 67 | 63 | 42 | -4.9% | -7.5% | -19.5% | -30.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 35.6% | 32.4% | 32.8% | 31.9% | -15.6% | -17.0% | -5.5% | 6.1% |
| EBITDA Margin | 30.2% | 23.9% | 36.6% | 22.3% | -11.4% | -21.9% | -1.0% | 633.8% |
| Net Income Margin | 7.1% | 8.2% | 11.4% | -7.8% | -1.8% | -11.2% | -2.1% | 577.1% |
Revenue and profitability
The company's Revenue dropped on 16.0%. Annual revenue decline showed slowdown in FY16Q4 - revenue decreased on 4.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 91.1 pp from -62.2% to 28.9% in FY2016.
Gross Margin decreased on 9.2 pp from 42.6% to 33.4% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign surged on 86.1 pp from -80.3% to 5.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 34.1%. The company's CAPEX/Revenue dropped on 16.1 pp from 50.2% in FY2013 to 34.1% in FY2016. Average CAPEX/Revenue for the last three years was 46.4%.Battling declining revenue Silvercorp Metals Inc made large investments to CAPEX (118% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (3.93%) and ROE (2.68%). ROIC jumped on 31.4 pp from -27.5% to 3.9% in FY2016. ROE jumped on 37.7 pp from -35.0% to 2.7% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 30.3%.
Management team
The company's CEO Rui Feng is a founder and has spent 13 years at the company. The company's CFO is Derek Liu. Derek Liu has 3 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Silvercorp Metals Inc 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Golden Minerals Co ($AUM) | | -59.1% | -97.8% | 3,334.5% | -20.7% |
| Marlin Gold Mining Ltd ($MLN) | | | | 835.4% | |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| HudBay Minerals Inc ($HBM) | | -28.6% | -8.4% | 92.8% | 27.4% |
| Catalyst Paper Corp ($CYT) | | -0.6% | 5.5% | 79.5% | |
| |
|---|
| Median (107 companies) | 98.7% | -3.2% | 1.8% | -4.0% | 5.7% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($NSU) | 89.9% | 94.8% | 95.5% | 82.3% | 79.7% |
| Labrador Iron Ore Royalty Corp ($LIF) | 80.2% | 80.2% | 80.2% | 80.3% | 80.3% |
| Lucara Diamond Corp ($LUC) | 42.5% | 57.4% | 66.7% | 60.9% | 65.6% |
| Trevali Mining Corp ($TV) | | | 49.0% | 59.3% | |
| Perseus Mining Ltd ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (102 companies) | 32.1% | 21.8% | 18.2% | 15.6% | 24.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($LIF) | | | | 72.8% | 73.5% |
| Silver Wheaton Corp ($SLW) | 82.6% | 75.3% | 69.6% | 65.8% | 59.7% |
| Franco-Nevada Corp ($FNV) | 62.1% | 44.6% | 72.3% | 60.8% | 70.3% |
| Lucara Diamond Corp ($LUC) | 7.6% | 57.3% | 57.5% | 60.0% | 62.4% |
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (108 companies) | 17.4% | 10.4% | 10.8% | 5.3% | 24.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
| Silver Wheaton Corp ($SLW) | 75.5% | 286.8% | 22.5% | 279.2% | 90.3% |
| Franco-Nevada Corp ($FNV) | 3.7% | 35.5% | 201.6% | 230.0% | 122.4% |
| Avino Silver & Gold Mines Ltd ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (108 companies) | 27.4% | 26.5% | 16.9% | 16.6% | 17.5% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($LUC) | -2.9% | 41.3% | 54.7% | 39.6% | 58.5% |
| Western Forest Products Inc ($WEF) | 9.0% | 25.1% | 15.7% | 16.4% | 25.1% |
| Geodrill Ltd ($GEO) | 8.6% | -3.5% | -9.3% | 3.6% | 20.3% |
| Supremex Inc ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.8% | -0.1% | 1.2% | -4.9% | 4.8% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
| Copper Mountain Mining Corp ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 1.0x | 1.1x | 1.6x | 0.7x |
|---|
