Rockwell Diamonds Inc revenue dropped on 30.4% in 2016 and EBITDA Margin decreased on 3.1 pp from -14.3% to -17.5%
30.05.2016 • About Rockwell Diamonds Inc (
$RDI) • By InTwits
Rockwell Diamonds Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rockwell Diamonds Inc doesn't have a profitable business model yet: FY2016 ROIC is -50.1%
- The company operates at negative EBITDA Margin: -17.5%
- Rockwell Diamonds Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -8.1%0
- Rockwell Diamonds Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.1%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: 2.1 in FY2016, 4.7 in FY2015, 8.9 in FY2014, 4.8 in FY2013, 6.8 in FY2012
- The company has unprofitable business model: ROIC is at -50.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rockwell Diamonds Inc ($RDI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 34.221 | 32.405 | 45.169 | 67.998 | 47.339 | -30.4% |
| Gross Profit | 7.284 | 1.067 | 0.033 | -8.888 | -12.778 | |
| SG&A | | | | 5.895 | 5.252 | -10.9% |
| EBITDA | 0.441 | -4.141 | 3.233 | -9.741 | -8.269 | |
| Net Income | -11.637 | -10.901 | -10.618 | -13.980 | -28.282 | |
Balance Sheet
|
|---|
| Cash | 10.741 | 5.571 | 1.324 | 0.576 | 0.058 | -89.9% |
| Short Term Debt | 1.919 | 4.476 | 5.204 | 3.004 | 1.984 | -34.0% |
| Long Term Debt | 5.037 | 4.171 | 3.350 | 5.120 | 24.855 | 385.4% |
Cash flow
|
|---|
| Capex | 6.803 | 4.751 | 8.907 | 4.733 | 2.066 | -56.3% |
Ratios
|
|---|
| Revenue growth | -19.5% | -5.3% | 39.4% | 50.5% | -30.4% | |
| EBITDA growth | -94.2% | -1,039.2% | -178.1% | -401.3% | -15.1% | |
| Gross Margin | 21.3% | 3.3% | 0.1% | -13.1% | -27.0% | -13.9% |
| EBITDA Margin | 1.3% | -12.8% | 7.2% | -14.3% | -17.5% | -3.1% |
| Net Income Margin | -34.0% | -33.6% | -23.5% | -20.6% | -59.7% | -39.2% |
| SG&A, % of revenue | | | | 8.7% | 11.1% | 2.4% |
| CAPEX, % of revenue | 19.9% | 14.7% | 19.7% | 7.0% | 4.4% | -2.6% |
| ROIC | | -14.0% | -4.1% | -31.3% | -50.1% | -18.8% |
| ROE | -14.6% | -16.2% | -19.9% | -32.6% | -140.4% | -107.8% |
| Net Debt/EBITDA | -8.6x | | 2.2x | | | 0.0x |
Rockwell Diamonds Inc ($RDI) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 9 | 21 | 7 | 10 | -39.0% | 24.2% | -62.5% | -41.2% |
| EBITDA | -6 | 8 | -6 | -4 | -338.5% | | | |
| Net Income | -5 | 1 | -9 | -15 | -1,372.1% | | | |
Balance Sheet
|
|---|
| Cash | 1 | 0 | 1 | 0 | -9.3% | -90.3% | -47.3% | -89.9% |
| Short Term Debt | 30 | 29 | 6 | 2 | 562.9% | 457.9% | 33.2% | -34.0% |
| Long Term Debt | 2 | 2 | 24 | 25 | -38.1% | -44.2% | 238.8% | 385.4% |
Ratios
|
|---|
| Gross Margin | -49.3% | 32.6% | -99.6% | -79.7% | -66.5% | 36.5% | -73.5% | -45.1% |
| EBITDA Margin | -66.6% | 36.4% | -82.5% | -38.9% | -83.6% | 36.9% | -59.2% | 6.9% |
| Net Income Margin | -55.7% | 5.7% | -132.2% | -148.9% | -58.4% | 13.9% | -106.6% | -101.2% |
Revenue and profitability
Rockwell Diamonds Inc's Revenue dropped on 30.4%. Revenue decline showed acceleration in FY16Q4 - it was 41.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.3 pp from 6.3% to 22.6% in FY2016.
Gross Margin dropped on 13.9 pp from -13.1% to -27.0% in FY2016. SG&A as a % of Revenue increased on 2.4 pp from 8.7% to 11.1% in FY2016.
Net Income marign dropped on 39.2 pp from -20.6% to -59.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Rockwell Diamonds Inc's CAPEX/Revenue was 4.4% in FY2016. The company showed big decline in CAPEX/Revenue of 10.3 pp from 14.7% in FY2013 to 4.4% in FY2016. For the last three years the average CAPEX/Revenue was 10.3%.
Return on investment
The company operates at negative ROIC (-50.11%) and ROE (-140.39%). ROIC dropped on 18.8 pp from -31.3% to -50.1% in FY2016. ROE dropped on 108 pp from -32.6% to -140% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt surged on 230% while cash dropped on 89.9%.
Appendix 1: Peers in Basic Materials
Below you can find Rockwell Diamonds Inc 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Avino Silver & Gold Mines Ltd ($ASM) | | 613.6% | 19.9% | -1.1% | 109.1% |
| Trevali Mining Corp ($TV) | | | | 12.9% | 86.4% |
| Geodrill Ltd ($GEO) | | -43.3% | -4.3% | 34.6% | 53.1% |
| Tahoe Resources Inc ($THO) | | | | 48.4% | 50.9% |
| Osisko Gold Royalties Ltd ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (83 companies) | 68.4% | -3.2% | 1.8% | -1.7% | 6.2% |
|---|
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (96 companies) | 32.1% | 22.1% | 19.1% | 16.9% | 24.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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 (102 companies) | 17.4% | 10.8% | 10.3% | 7.2% | 23.5% |
|---|
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (102 companies) | 27.4% | 26.5% | 17.5% | 16.6% | 17.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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 (100 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.4% |
|---|
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 (58 companies) | 0.3x | 0.9x | 1.2x | 1.6x | 0.6x |
|---|
