Orocobre Ltd reports 78.1% CAPEX growth while 8.5% Revenue decline
19.07.2016 • About Orocobre Ltd (
$ORL) • By InTwits
Orocobre Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Orocobre Ltd doesn't have a profitable business model yet: FY2016 ROIC is -5.9%
- The company operates at negative EBITDA Margin: -57.1%
- Orocobre Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -45.8% for the sames years0
- Orocobre Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 2,648.7%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 5.2 in FY2016, 2.9 in FY2015, 6.7 in FY2014, 9.8 in FY2013, 18.8 in FY2012
- The company has unprofitable business model: ROIC is at -5.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Orocobre Ltd ($ORL) key annual financial indicators
| mln. AUD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 0.144 | 19.150 | 23.167 | 23.315 | 21.328 | -8.5% |
| Gross Profit | | 2.041 | 2.224 | 0.370 | 1.373 | 270.7% |
| SG&A | 1.196 | 8.437 | 9.551 | 4.955 | 7.208 | 45.5% |
| EBITDA | -4.137 | -8.889 | -5.333 | -9.349 | -12.183 | |
| Net Income | -2.830 | 95.685 | -5.459 | -1.015 | -30.100 | |
Balance Sheet
|
|---|
| Cash | 16.481 | 10.609 | 26.302 | 9.415 | 48.120 | 411.1% |
| Short Term Debt | 0.000 | 0.914 | 1.362 | 2.709 | 2.722 | 0.5% |
| Long Term Debt | 0.000 | 2.743 | 1.352 | 0.795 | 1.402 | 76.4% |
Cash flow
|
|---|
| Capex | 18.846 | 9.787 | 6.745 | 2.925 | 5.209 | 78.1% |
Ratios
|
|---|
| Revenue growth | -19.7% | 13,238.0% | 21.0% | 0.6% | -8.5% | |
| EBITDA growth | 27.3% | 114.9% | -40.0% | 75.3% | 30.3% | |
| Gross Margin | | 10.7% | 9.6% | 1.6% | 6.4% | 4.8% |
| EBITDA Margin | -2,881.4% | -46.4% | -23.0% | -40.1% | -57.1% | -17.0% |
| Net Income Margin | -1,971.1% | 499.6% | -23.6% | -4.4% | -141.1% | -136.8% |
| SG&A, % of revenue | 833.0% | 44.1% | 41.2% | 21.3% | 33.8% | 12.5% |
| CAPEX, % of revenue | 13,126.1% | 51.1% | 29.1% | 12.5% | 24.4% | 11.9% |
| ROIC | -7.0% | -7.8% | -3.8% | -5.7% | -5.9% | -0.2% |
| ROE | -4.7% | 79.0% | -3.2% | -0.5% | -12.4% | -11.8% |
Revenue and profitability
Orocobre Ltd's Revenue decreased on 8.5%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 17.0 pp from -40.1% to -57.1% in FY2016.
Gross Margin increased on 4.8 pp from 1.6% to 6.4% in FY2016. SG&A as a % of Revenue jumped on 12.5 pp from 21.3% to 33.8% in FY2016.
Net Income marign dropped on 137 pp from -4.4% to -141% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 24.4%. The company showed big decline in CAPEX/Revenue of 26.7 pp from 51.1% in FY2013 to 24.4% in FY2016. It's average level of CAPEX/Revenue for the last three years was 22.0%.
Return on investment
The company operates at negative ROIC (-5.94%) and ROE (-12.35%). ROIC showed almost no change in FY2016. ROE dropped on 11.8 pp from -0.54% to -12.4% in FY2016.
Leverage (Debt)
Debt level is -5.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt surged on 17.7% while cash jumped on 411%.
Management team
Richard Phillip Seville is a the company's CEO. Richard Phillip Seville is a founder and has spent 11 years at the company. The company's CFO is Neil Kaplan. Neil Kaplan has 5 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Orocobre 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 | 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 1.8% | -2.9% | 6.8% |
|---|
| Orocobre Ltd ($ORL) | | 13,238.0% | 21.0% | 0.6% | -8.5% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.7% | 19.1% | 16.9% | 24.8% |
|---|
| Orocobre Ltd ($ORL) | | 10.7% | 9.6% | 1.6% | 6.4% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 11.5% | 10.7% | 7.3% | 24.5% |
|---|
| Orocobre Ltd ($ORL) | -2,881.4% | -46.4% | -23.0% | -40.1% | -57.1% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 27.4% | 26.5% | 17.5% | 17.2% | 17.5% |
|---|
| Orocobre Ltd ($ORL) | 13,126.1% | 51.1% | 29.1% | 12.5% | 24.4% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 1.3% | 1.6% | -3.6% | 4.8% |
|---|
| Orocobre Ltd ($ORL) | -7.0% | -7.8% | -3.8% | -5.7% | -5.9% |
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 |
|---|
