Methanex Corp Net Income dropped on 106% in 2016 and EBITDA Margin decreased on 6.6 pp from 19.4% to 12.8%
25.01.2017 • About Methanex Corp (
$MX) • By InTwits
Methanex Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Methanex Corp is a company in decline: 2016 revenue growth was -10.2%, 5 years revenue CAGR was -5.2%
- EBITDA Margin is quite volatile: 12.8% in 2016, 19.4% in 2015, 26.0% in 2014, 19.8% in 2013, 3.5% in 2012
- Methanex Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.2%. At the same time it's in pair with industry average of 6.5%.
- CAPEX is quite volatile: 99.9 in 2016, 425 in 2015, 658 in 2014, 579 in 2013, 188 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.8%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Methanex Corp ($MX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,543 | 3,024 | 3,223 | 2,226 | 1,998 | -10.2% |
| Gross Profit | 452 | 659 | 798 | 368 | 224 | -39.1% |
| EBITDA | 90 | 600 | 840 | 433 | 257 | -40.7% |
| Net Income | -68 | 329 | 455 | 201 | -13 | -106.3% |
Balance Sheet
|
|---|
| Cash | 727 | 733 | 952 | 255 | 224 | -12.2% |
| Short Term Debt | 38 | 42 | 194 | 48 | 54 | 12.8% |
| Long Term Debt | 1,156 | 1,127 | 1,528 | 1,488 | 1,502 | 1.0% |
Cash flow
|
|---|
| Capex | 188 | 579 | 658 | 425 | 100 | -76.5% |
Ratios
|
|---|
| Revenue growth | -2.5% | 18.9% | 6.6% | -31.0% | -10.2% | |
| EBITDA growth | -82.0% | 565.2% | 40.0% | -48.5% | -40.7% | |
| Gross Margin | 17.8% | 21.8% | 24.7% | 16.5% | 11.2% | -5.3% |
| EBITDA Margin | 3.5% | 19.8% | 26.0% | 19.4% | 12.8% | -6.6% |
| Net Income Margin | -2.7% | 10.9% | 14.1% | 9.0% | -0.6% | -9.6% |
| CAPEX, % of revenue | 7.4% | 19.1% | 20.4% | 19.1% | 5.0% | -14.1% |
| ROIC | -2.1% | 15.7% | 19.3% | 6.1% | 0.8% | -5.4% |
| ROE | -5.1% | 22.3% | 26.4% | 11.4% | -0.8% | -12.2% |
| Net Debt/EBITDA | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x | 2.2x |
Methanex Corp ($MX) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 435 | 468 | 510 | 586 | -24.6% | -26.6% | -3.2% | 21.0% |
| EBITDA | 31 | 70 | 50 | 105 | -58.4% | -60.3% | -62.6% | 119.9% |
| Net Income | -23 | -3 | -11 | 25 | -370.4% | -102.8% | -114.2% | 166.8% |
Balance Sheet
|
|---|
| Cash | 275 | 239 | 234 | 224 | -56.1% | -50.7% | -45.2% | -12.2% |
| Short Term Debt | 50 | 53 | 54 | 54 | 11.1% | 16.1% | 15.7% | 12.8% |
| Long Term Debt | 1,469 | 1,501 | 1,504 | 1,502 | -2.5% | -0.3% | 1.3% | 1.0% |
Ratios
|
|---|
| Gross Margin | 7.2% | 8.1% | 9.7% | 18.0% | -5.8% | -9.5% | -15.5% | 8.1% |
| EBITDA Margin | 7.2% | 15.0% | 9.7% | 18.0% | -5.8% | -12.7% | -15.5% | 8.1% |
| Net Income Margin | -5.4% | -0.6% | -2.2% | 4.2% | -6.9% | -17.0% | -17.0% | 2.3% |
Revenue and profitability
Methanex Corp's Revenue dropped on 10.2%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 21.0%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 6.6 pp from 19.4% to 12.8% in 2016.
Gross Margin decreased on 5.3 pp from 16.5% to 11.2% in 2016.
Net Income marign decreased on 9.6 pp from 9.0% to -0.63% in 2016.
Capital expenditures (CAPEX) and working capital investments
Methanex Corp's CAPEX/Revenue was 5.0% in 2016. The company showed big decline in CAPEX/Revenue of 14.1 pp from 19.1% in 2013 to 5.0% in 2016. Average CAPEX/Revenue for the last three years was 14.8%.
Return on investment
The company operates at low but positive ROIC (0.79%) and negative ROE (-0.76%). ROIC decreased on 5.4 pp from 6.1% to 0.79% in 2016. ROE dropped on 12.2 pp from 11.4% to -0.76% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.2x and Debt / EBITDA is 6.1x. Net Debt / EBITDA jumped on 2.2x from 3.0x to 5.2x in 2016. Debt increased slightly on 1.3% while cash dropped on 12.2%.
Management team
The company's CEO John Floren is a founder and has spent 5 years at the company. The company's CFO is Ian P Cameron. Ian P Cameron has 15 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Methanex 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 1.8% | -1.7% | 6.8% |
|---|
| Methanex Corp ($MX) | | 18.9% | 6.6% | -31.0% | -10.2% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.2% | 22.7% | 18.2% | 16.9% | 24.8% |
|---|
| Methanex Corp ($MX) | 17.8% | 21.8% | 24.7% | 16.5% | 11.2% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 10.8% | 10.3% | 6.7% | 24.5% |
|---|
| Methanex Corp ($MX) | 3.5% | 19.8% | 26.0% | 19.4% | 12.8% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.5% | 16.6% | 18.3% |
|---|
| Methanex Corp ($MX) | 7.4% | 19.1% | 20.4% | 19.1% | 5.0% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.8% |
|---|
| Methanex Corp ($MX) | -2.1% | 15.7% | 19.3% | 6.1% | 0.8% |
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 |
| 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 |
| Resolute Forest Products Inc ($RFP) | 1.3x | 1.1x | 3.8x | 29.6x | 4.0x |
| |
|---|
| Median (57 companies) | 0.3x | 0.9x | 1.2x | 1.5x | 0.6x |
|---|
| Methanex Corp ($MX) | 5.2x | 0.7x | 0.9x | 3.0x | 5.2x |
