OceanaGold Corp CAPEX surged on 214% in 2016 and Revenue surged on 23.8%
31.01.2017 • About OceanaGold Corp (
$OGC) • By InTwits
OceanaGold Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- OceanaGold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 44.5%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 447 in 2016, 142 in 2015, 109 in 2014, 160 in 2013, 290 in 2012
- The company has business model with average profitability: ROIC is at 10.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
OceanaGold Corp ($OGC) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 385.4 | 553.6 | 563.3 | 508.0 | 628.6 | 23.8% |
| Gross Profit | 159.4 | 293.0 | 273.4 | 242.9 | 336.2 | 38.4% |
| SG&A | 14.9 | 28.4 | 34.5 | 45.3 | 57.5 | 26.8% |
| EBITDA | 144.5 | 264.5 | 238.9 | 197.6 | 278.7 | 41.0% |
| Net Income | 20.7 | -47.9 | 111.5 | 53.1 | 136.5 | 157.1% |
Balance Sheet
|
|---|
| Cash | 96.5 | 24.8 | 51.2 | 185.5 | 68.9 | -62.9% |
| Short Term Debt | 130.2 | 67.4 | 15.0 | 10.8 | 86.4 | 699.5% |
| Long Term Debt | 136.7 | 126.5 | 103.1 | 187.9 | 238.0 | 26.6% |
Cash flow
|
|---|
| Capex | 290.3 | 160.0 | 108.5 | 142.3 | 447.3 | 214.4% |
Ratios
|
|---|
| Revenue growth | -2.6% | 43.6% | 1.8% | -9.8% | 23.8% | |
| EBITDA growth | -12.0% | 83.1% | -9.7% | -17.3% | 41.0% | |
| Gross Margin | 41.4% | 52.9% | 48.5% | 47.8% | 53.5% | 5.7% |
| EBITDA Margin | 37.5% | 47.8% | 42.4% | 38.9% | 44.3% | 5.4% |
| Net Income Margin | 5.4% | -8.6% | 19.8% | 10.4% | 21.7% | 11.3% |
| SG&A, % of revenue | 3.9% | 5.1% | 6.1% | 8.9% | 9.1% | 0.2% |
| CAPEX, % of revenue | 75.3% | 28.9% | 19.3% | 28.0% | 71.2% | 43.1% |
| ROIC | 6.4% | 15.8% | 13.7% | 6.8% | 10.4% | 3.7% |
| ROE | 3.8% | -8.0% | 17.3% | 5.8% | 11.0% | 5.2% |
| Net Debt/EBITDA | 1.2x | 0.6x | 0.3x | 0.1x | 0.9x | 0.8x |
OceanaGold Corp ($OGC) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 161 | 170 | 150 | 147 | 24.6% | 35.3% | 37.2% | 2.7% |
| EBITDA | 77 | 75 | 62 | 66 | 26.5% | 75.6% | 74.4% | 11.2% |
| Net Income | 24 | 40 | 31 | 43 | -3.8% | | 343.3% | 88.0% |
Balance Sheet
|
|---|
| Cash | 118 | 104 | 88 | 69 | 97.9% | 113.1% | 91.9% | -62.9% |
| Short Term Debt | 8 | 15 | 16 | 86 | -48.1% | 1.7% | 44.2% | 699.5% |
| Long Term Debt | 187 | 213 | 283 | 238 | 111.8% | 146.4% | 220.8% | 26.6% |
Ratios
|
|---|
| Gross Margin | 55.4% | 53.1% | 48.5% | 57.0% | 2.3% | 10.9% | 3.9% | 6.5% |
| EBITDA Margin | 47.7% | 43.9% | 40.9% | 44.6% | 0.8% | 10.1% | 8.7% | 3.4% |
| Net Income Margin | 14.6% | 23.4% | 20.4% | 28.9% | -4.3% | 24.1% | 14.1% | 13.1% |
Revenue and profitability
The company's Revenue jumped on 23.8%. Revenue growth showed slow down in 16Q4 - it was 2.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 59.9 pp from -28.4% to 31.5% in 2016.
Gross Margin increased on 5.7 pp from 47.8% to 53.5% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 11.3 pp from 10.4% to 21.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 71.2% in 2016. CAPEX/Revenue jumped on 42.3 pp from 28.9% in 2013 to 71.2% in 2016. For the last three years the average CAPEX/Revenue was 39.5%.The company has spent a lot to CAPEX (161% of EBITDA) to secure its growth.
Return on investment
The company operates at low ROIC (10.43%) and ROE (11.03%). ROIC increased on 3.7 pp from 6.8% to 10.4% in 2016. ROE increased on 5.2 pp from 5.8% to 11.0% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 1.2x. Net Debt / EBITDA jumped on 0.8x from 0.1x to 0.9x in 2016. Debt jumped on 63.2% while cash dropped on 62.9%.
Management team
OceanaGold Corp's CEO Michael F Wilkes "Mick" is a founder and has spent 7 years at the company. Mark Chamberlain is a The company's CFO. Mark Chamberlain has spent 7 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide OceanaGold Corp benchmarking against other companies in Basic Materials industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 2.0% | -1.7% | 5.7% |
|---|
| OceanaGold Corp ($OGC) | | 43.6% | 1.8% | -9.8% | 23.8% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.4% | 24.7% |
|---|
| OceanaGold Corp ($OGC) | 41.4% | 52.9% | 48.5% | 47.8% | 53.5% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 10.8% | 10.3% | 6.7% | 23.0% |
|---|
| OceanaGold Corp ($OGC) | 37.5% | 47.8% | 42.4% | 38.9% | 44.3% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 27.4% | 26.5% | 17.5% | 16.6% | 17.5% |
|---|
| OceanaGold Corp ($OGC) | 75.3% | 28.9% | 19.3% | 28.0% | 71.2% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.0% |
|---|
| OceanaGold Corp ($OGC) | 6.4% | 15.8% | 13.7% | 6.8% | 10.4% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.9x | 1.2x | 1.6x | 0.6x |
|---|
| OceanaGold Corp ($OGC) | 1.2x | 0.6x | 0.3x | 0.1x | 0.9x |
