Rochester Resources Ltd reports 51.3% CAPEX decline and 30.9% Revenue decline
28.09.2016 • About Rochester Resources Ltd (
$RCT) • By InTwits
Rochester Resources Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rochester Resources Ltd is a company in decline: FY2016 revenue growth was -30.9%, 5 years revenue CAGR was -4.2%
- The company operates at negative EBITDA Margin: -148.8%
- Rochester Resources Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -12.2% for the sames years0
- Rochester Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.6%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 0.37 in FY2016, 0.76 in FY2015, 0.92 in FY2014, 3.8 in FY2013, 2.1 in FY2012
- It operates with high leverage: Net Debt/EBITDA is 3.5x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rochester Resources Ltd ($RCT) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 11.635 | 12.495 | 13.295 | 10.712 | 7.403 | -30.9% |
| Gross Profit | 3.062 | 1.629 | 0.523 | -4.031 | -3.242 | |
| SG&A | | | | 0.806 | 0.766 | -4.9% |
| EBITDA | 3.413 | 1.974 | 1.519 | -2.688 | -11.019 | |
| Net Income | 1.883 | -0.322 | -1.151 | -9.695 | -13.046 | |
Balance Sheet
|
|---|
| Cash | 0.272 | 0.085 | 0.020 | 0.021 | 0.025 | 21.0% |
| Short Term Debt | 0.028 | 1.500 | 4.588 | 4.596 | 4.581 | -0.3% |
| Long Term Debt | 0.000 | 3.885 | 0.100 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 2.137 | 3.826 | 0.922 | 0.762 | 0.371 | -51.3% |
Ratios
|
|---|
| Revenue growth | 26.5% | 7.4% | 6.4% | -19.4% | -30.9% | |
| EBITDA growth | 93.3% | -42.2% | -23.0% | -276.9% | 310.0% | |
| Gross Margin | 26.3% | 13.0% | 3.9% | -37.6% | -43.8% | -6.2% |
| EBITDA Margin | 29.3% | 15.8% | 11.4% | -25.1% | -148.8% | -123.8% |
| Net Income Margin | 16.2% | -2.6% | -8.7% | -90.5% | -176.2% | -85.7% |
| SG&A, % of revenue | | | | 7.5% | 10.4% | 2.8% |
| CAPEX, % of revenue | 18.4% | 30.6% | 6.9% | 7.1% | 5.0% | -2.1% |
| ROIC | 15.6% | 2.7% | -1.8% | -47.5% | | 47.5% |
| ROE | 11.4% | -2.2% | -10.4% | -171.0% | | 171.0% |
| Net Debt/EBITDA | -0.1x | 2.7x | 3.1x | | | 0.0x |
Rochester Resources Ltd ($RCT) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 2 | 2 | 2 | -8.6% | -33.2% | -46.1% | -35.9% |
| EBITDA | -1 | -1 | -1 | -9 | | | | |
| Net Income | -1 | -2 | -1 | -9 | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 0 | 0 | 201.5% | -38.6% | -97.2% | 21.0% |
| Short Term Debt | 5 | 5 | 5 | 5 | -0.1% | -0.5% | -0.5% | -0.3% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | -27.8% | -66.2% | -52.5% | -37.1% | -0.7% | -21.6% | -15.6% | 6.1% |
| EBITDA Margin | -22.3% | -58.9% | -40.1% | -554.9% | -3.0% | -27.9% | -17.0% | -526.9% |
| Net Income Margin | -52.0% | -101.8% | -67.7% | -561.6% | -16.8% | -41.5% | -8.6% | -341.4% |
Revenue and profitability
The company's Revenue dropped on 30.9%. Revenue decline showed acceleration in FY16Q4 - it was 35.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 124 pp from -25.1% to -149% in FY2016.
Gross Margin decreased on 6.2 pp from -37.6% to -43.8% in FY2016. SG&A as a % of Revenue increased on 2.8 pp from 7.5% to 10.4% in FY2016.
Net Income marign dropped on 85.7 pp from -90.5% to -176% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Rochester Resources Ltd had CAPEX/Revenue of 5.0%. CAPEX/Revenue dropped on 25.6 pp from 30.6% in FY2013 to 5.0% in FY2016. For the last three years the average CAPEX/Revenue was 6.4%.
Leverage (Debt)
Debt level is 3.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2016. Debt showed almost no change in FY2016 while cash jumped on 21.0%.
Appendix 1: Peers in Basic Materials
Below you can find Rochester Resources 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 (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 |
|---|
