Major Drilling Group International Inc EBITDA jumped on 27.2% in 2016 and Revenue showed almost no change
07.06.2016 • About Major Drilling Group International Inc (
$MDI) • By InTwits
Major Drilling Group International Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Major Drilling Group International Inc doesn't have a profitable business model yet: FY2016 ROIC is -7.9%
- EBITDA Margin is quite volatile: 5.1% in FY2016, 4.0% in FY2015, 4.0% in FY2014, 19.4% in FY2013, 22.0% in FY2012
- Major Drilling Group International Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.1%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 12.1 in FY2016, 14.8 in FY2015, 22.6 in FY2014, 69.0 in FY2013, 81.1 in FY2012
- The company has unprofitable business model: ROIC is at -7.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Major Drilling Group International Inc ($MDI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 797.4 | 695.9 | 354.9 | 305.7 | 304.6 | -0.4% |
| Gross Profit | 251.1 | 220.3 | 104.4 | 65.9 | 70.0 | 6.2% |
| SG&A | 58.0 | 63.8 | 50.1 | 44.9 | 44.1 | -1.9% |
| EBITDA | 175.7 | 134.7 | 14.3 | 12.2 | 15.6 | 27.2% |
| Net Income | 89.7 | 52.1 | -55.3 | -49.6 | -45.3 | |
Balance Sheet
|
|---|
| Cash | 37.2 | 82.3 | 74.2 | 44.9 | 50.2 | 11.9% |
| Short Term Debt | 8.7 | 9.1 | 13.6 | 6.8 | 5.3 | -22.0% |
| Long Term Debt | 42.3 | 34.5 | 14.2 | 8.6 | 6.9 | -19.1% |
Cash flow
|
|---|
| Capex | 81.1 | 69.0 | 22.6 | 14.8 | 12.1 | -17.8% |
Ratios
|
|---|
| Revenue growth | 65.3% | -12.7% | -49.0% | -13.9% | -0.4% | |
| EBITDA growth | 143.2% | -23.3% | -89.4% | -14.5% | 27.2% | |
| Gross Margin | 31.5% | 31.7% | 29.4% | 21.6% | 23.0% | 1.4% |
| EBITDA Margin | 22.0% | 19.4% | 4.0% | 4.0% | 5.1% | 1.1% |
| Net Income Margin | 11.3% | 7.5% | -15.6% | -16.2% | -14.9% | 1.3% |
| SG&A, % of revenue | 7.3% | 9.2% | 14.1% | 14.7% | 14.5% | -0.2% |
| CAPEX, % of revenue | 10.2% | 9.9% | 6.4% | 4.8% | 4.0% | -0.8% |
| ROIC | 28.4% | 14.0% | -6.8% | -8.2% | -7.9% | 0.3% |
| ROE | 22.0% | 10.2% | -10.8% | -10.5% | -10.2% | 0.3% |
| Net Debt/EBITDA | 0.1x | -0.3x | -3.2x | -2.4x | -2.4x | -0.0x |
Major Drilling Group International Inc ($MDI) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 84 | 85 | 72 | 64 | 24.3% | -2.9% | 3.0% | -21.0% |
| EBITDA | 6 | 11 | -2 | -0 | 43.9% | 62.4% | | -103.3% |
| Net Income | -11 | -5 | -16 | -13 | | | | |
Balance Sheet
|
|---|
| Cash | 49 | 50 | 49 | 50 | -25.8% | -2.9% | -2.7% | 11.9% |
| Short Term Debt | 7 | 8 | 10 | 5 | -24.3% | 1.8% | 5.1% | -22.0% |
| Long Term Debt | 8 | 9 | 8 | 7 | -36.0% | -22.4% | -18.3% | -19.1% |
Ratios
|
|---|
| Gross Margin | 25.8% | 27.5% | 18.1% | 18.8% | 1.1% | 3.8% | 6.9% | -6.7% |
| EBITDA Margin | 7.3% | 13.4% | -2.3% | -0.4% | 1.0% | 5.4% | 6.6% | -9.2% |
| Net Income Margin | -13.3% | -6.3% | -22.1% | -20.1% | -2.5% | 5.3% | 5.1% | -3.9% |
Revenue and profitability
The company's Revenue showed almost no change in FY2016. Revenue decline showed acceleration in FY16Q4 - it was 21.0% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.1 pp from 4.0% to 5.1% in FY2016.
Gross Margin increased slightly on 1.4 pp from 21.6% to 23.0% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased slightly on 1.3 pp from -16.2% to -14.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Major Drilling Group International Inc had CAPEX/Revenue of 4.0%. The company's CAPEX/Revenue decreased on 5.9 pp from 9.9% in FY2013 to 4.0% in FY2016. For the last three years the average CAPEX/Revenue was 5.1%.Battling declining revenue the company invested a large share of EBITDA (77.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-7.91%) and ROE (-10.22%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 0.8x. Net Debt / EBITDA decreased on 0.026x from -2.4x to -2.4x in FY2016. Debt dropped on 20.4% while cash jumped on 11.9%.
Management team
Major Drilling Group International Inc's CEO is Denis J Larocque. Denis J Larocque is a founder and has 3 years tenure at the company. David D Balser is a The company's CFO. David D Balser has spent 3 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find Major Drilling Group International 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) | 100.8% | -2.9% | 1.9% | -1.8% | 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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (95 companies) | 32.1% | 22.4% | 18.6% | 16.5% | 24.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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 (101 companies) | 18.6% | 11.3% | 10.6% | 7.0% | 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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (101 companies) | 27.8% | 26.9% | 17.5% | 16.7% | 17.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% | 0.7% | 1.6% | -3.6% | 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 | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
