Orvana Minerals Corp reports 48.0% CAPEX growth while 22.7% Revenue decline
13.12.2016 • About Orvana Minerals Corp (
$ORV) • By InTwits
Orvana Minerals Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Orvana Minerals Corp doesn't have a profitable business model yet: FY2016 ROIC is -11.0%
- EBITDA Margin is declining: 4.9% in FY2016 vs. 6.7% in FY2015 vs. 31.9% in FY2012
- EBITDA Margin is quite volatile: 4.9% in FY2016, 6.7% in FY2015, 23.1% in FY2014, 32.3% in FY2013, 31.9% in FY2012
- Orvana Minerals Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.3%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: 15.0 in FY2016, 10.1 in FY2015, 14.5 in FY2014, 18.0 in FY2013, 37.7 in FY2012
- The company has unprofitable business model: ROIC is at -11.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Orvana Minerals Corp ($ORV) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 145.6 | 162.2 | 142.4 | 121.4 | 93.9 | -22.7% |
| Gross Profit | 57.3 | 37.3 | 9.3 | -13.9 | -7.9 | |
| SG&A | | | | 5.1 | 5.5 | 8.0% |
| EBITDA | 46.4 | 52.4 | 32.9 | 8.2 | 4.6 | -44.0% |
| Net Income | -2.4 | 32.6 | -29.7 | -16.7 | -8.5 | |
Balance Sheet
|
|---|
| Cash | 13.2 | 13.0 | 16.5 | 17.2 | 18.9 | 9.9% |
| Short Term Debt | 25.2 | 28.1 | 25.3 | 1.5 | 6.8 | 358.3% |
| Long Term Debt | 45.3 | 31.2 | 0.0 | 0.0 | 0.9 | |
Cash flow
|
|---|
| Capex | 37.7 | 18.0 | 14.5 | 10.1 | 15.0 | 48.0% |
Ratios
|
|---|
| Revenue growth | 480.3% | 11.4% | -12.2% | -14.7% | -22.7% | |
| EBITDA growth | -980.3% | 12.9% | -37.2% | -75.1% | -44.0% | |
| Gross Margin | 39.4% | 23.0% | 6.5% | -11.4% | -8.4% | 3.0% |
| EBITDA Margin | 31.9% | 32.3% | 23.1% | 6.7% | 4.9% | -1.9% |
| Net Income Margin | -1.6% | 20.1% | -20.9% | -13.8% | -9.0% | 4.8% |
| SG&A, % of revenue | | | | 4.2% | 5.9% | 1.7% |
| CAPEX, % of revenue | 25.9% | 11.1% | 10.2% | 8.3% | 16.0% | 7.6% |
| ROIC | 15.5% | 12.6% | 0.9% | -15.2% | -11.0% | 4.2% |
| ROE | -1.9% | 22.9% | -20.7% | -13.8% | -7.8% | 6.0% |
| Net Debt/EBITDA | 1.2x | 0.9x | 0.3x | -1.9x | -2.5x | -0.5x |
Orvana Minerals Corp ($ORV) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 22 | 21 | 26 | 24 | -42.0% | -29.3% | -19.1% | 17.9% |
| EBITDA | 1 | 0 | 3 | 1 | -91.9% | -91.4% | 252.7% | |
| Net Income | -3 | -3 | -1 | -2 | -516.8% | | | |
Balance Sheet
|
|---|
| Cash | 18 | 15 | 12 | 19 | -13.9% | -30.2% | -49.6% | 9.9% |
| Short Term Debt | 2 | 2 | 0 | 7 | -42.9% | -50.0% | | 358.3% |
| Long Term Debt | 0 | 0 | 3 | 1 | | | | |
Ratios
|
|---|
| Gross Margin | -17.2% | -3.9% | 1.6% | -15.0% | -23.5% | -4.1% | 19.6% | 37.0% |
| EBITDA Margin | 3.4% | 1.1% | 9.8% | 4.3% | -20.7% | -8.2% | 7.5% | 27.3% |
| Net Income Margin | -13.7% | -12.5% | -4.5% | -6.4% | -15.6% | 1.2% | 12.6% | 32.0% |
Revenue and profitability
The company's Revenue dropped on 22.7%. Annual revenue decline showed slowdown in FY16Q4 - revenue surged on 17.9%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from 6.7% to 4.9% in FY2016.
Gross Margin increased on 3.0 pp from -11.4% to -8.4% in FY2016. SG&A as a % of Revenue increased slightly on 1.7 pp from 4.2% to 5.9% in FY2016.
Net Income marign increased on 4.8 pp from -13.8% to -9.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 16.0%. The company's CAPEX/Revenue increased on 4.9 pp from 11.1% in FY2013 to 16.0% in FY2016. It's average CAPEX/Revenue for the last three years was 11.5%.Orvana Minerals Corp has spent a lot to CAPEX (327% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-10.98%) and ROE (-7.80%). ROIC increased on 4.2 pp from -15.2% to -11.0% in FY2016. ROE increased on 6.0 pp from -13.8% to -7.8% in FY2016.
Leverage (Debt)
Debt level is -2.5x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from -1.9x to -2.5x in FY2016. Debt jumped on 419% while cash increased on 9.9%.
Appendix 1: Peers in Basic Materials
Below you can find Orvana Minerals Corp 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 |
|---|
