Alacer Gold Corp reports 126% CAPEX growth while 40.2% Revenue decline
06.02.2017 • About Alacer Gold Corp (
$ASR) • By InTwits
Alacer Gold Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Alacer Gold Corp is a company in decline: 2016 revenue growth was -40.2%, 5 years revenue CAGR was -23.9%
- Alacer Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 36.4%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 147 in 2016, 65.0 in 2015, 35.3 in 2014, 77.7 in 2013, 61.3 in 2012
- The company has unprofitable business model: ROIC is at -0.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Alacer Gold Corp ($ASR) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 337.6 | 377.1 | 291.6 | 237.3 | 142.0 | -40.2% |
| Gross Profit | 237.5 | 222.5 | 117.0 | 89.3 | 18.1 | -79.7% |
| SG&A | 25.4 | 29.5 | 13.8 | 11.1 | 14.2 | 27.1% |
| EBITDA | 226.6 | 217.3 | 147.4 | 122.3 | 36.4 | -70.3% |
| Net Income | -386.0 | -447.2 | 65.6 | 46.6 | 6.2 | -86.7% |
Balance Sheet
|
|---|
| Cash | 277.3 | 289.6 | 346.6 | 360.7 | 214.6 | -40.5% |
| Short Term Debt | 68.9 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.5 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 61.3 | 77.7 | 35.3 | 65.0 | 147.1 | 126.2% |
Ratios
|
|---|
| Revenue growth | -39.4% | 11.7% | -22.7% | -18.6% | -40.2% | |
| EBITDA growth | -11.8% | -4.1% | -32.2% | -17.0% | -70.3% | |
| Gross Margin | 70.3% | 59.0% | 40.1% | 37.6% | 12.8% | -24.9% |
| EBITDA Margin | 67.1% | 57.6% | 50.5% | 51.5% | 25.6% | -25.9% |
| Net Income Margin | -114.3% | -118.6% | 22.5% | 19.7% | 4.4% | -15.3% |
| SG&A, % of revenue | 7.5% | 7.8% | 4.7% | 4.7% | 10.0% | 5.3% |
| CAPEX, % of revenue | 18.1% | 20.6% | 12.1% | 27.4% | 103.6% | 76.2% |
| ROIC | 14.3% | 19.0% | 13.6% | 9.8% | -0.3% | -10.2% |
| ROE | -31.7% | -56.4% | 11.8% | 7.6% | 1.0% | -6.7% |
| Net Debt/EBITDA | -0.9x | -1.3x | -2.4x | -3.0x | -5.9x | -2.9x |
Alacer Gold Corp ($ASR) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 38 | 38 | 28 | 38 | -39.0% | -40.9% | -53.5% | -24.7% |
| EBITDA | 12 | 10 | 4 | 10 | -65.0% | -73.9% | -85.8% | -50.6% |
| Net Income | 2 | 12 | 0 | -8 | -86.2% | -12.4% | -99.0% | -181.5% |
Balance Sheet
|
|---|
| Cash | 346 | 311 | 254 | 215 | -1.1% | -12.7% | -31.2% | -40.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 17.8% | 12.2% | 10.5% | 10.1% | -24.7% | -37.4% | -24.2% | -10.2% |
| EBITDA Margin | 32.0% | 26.5% | 14.5% | 26.5% | -23.8% | -33.6% | -32.9% | -13.9% |
| Net Income Margin | 5.6% | 32.2% | 0.3% | -21.2% | -19.0% | 10.5% | -11.9% | -40.8% |
Revenue and profitability
Alacer Gold Corp's Revenue dropped on 40.2%. Annual revenue decline showed slowdown in 16Q4 - revenue dropped on 24.7%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 25.9 pp from 51.5% to 25.6% in 2016.
Gross Margin dropped on 24.9 pp from 37.6% to 12.8% in 2016. SG&A as a % of Revenue increased on 5.3 pp from 4.7% to 10.0% in 2016.
Net Income marign dropped on 15.3 pp from 19.7% to 4.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 104%. Alacer Gold Corp showed fast CAPEX/Revenue growth of 83.0 pp from 20.6% in 2013 to 104% in 2016. For the last three years the average CAPEX/Revenue was 47.7%.Battling declining revenue the company made large investments to CAPEX (404% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.34%) and low but positive ROE (0.97%). ROIC dropped on 10.2 pp from 9.8% to -0.34% in 2016. ROE decreased on 6.7 pp from 7.6% to 0.97% in 2016.
Leverage (Debt)
The company has no debt. Cash dropped on 40.5%.
Management team
The company's CEO is Rodney P Antal "Rod". Rodney P Antal "Rod" is a founder and has 5 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Alacer Gold 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 2.0% | -1.7% | 6.8% |
|---|
| Alacer Gold Corp ($ASR) | | 11.7% | -22.7% | -18.6% | -40.2% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.4% | 24.8% |
|---|
| Alacer Gold Corp ($ASR) | 70.3% | 59.0% | 40.1% | 37.6% | 12.8% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 10.8% | 10.3% | 6.7% | 23.0% |
|---|
| Alacer Gold Corp ($ASR) | 67.1% | 57.6% | 50.5% | 51.5% | 25.6% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.8% | 16.6% | 17.5% |
|---|
| Alacer Gold Corp ($ASR) | 18.1% | 20.6% | 12.1% | 27.4% | 103.6% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.8% |
|---|
| Alacer Gold Corp ($ASR) | 14.3% | 19.0% | 13.6% | 9.8% | -0.3% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.9x | 1.2x | 1.6x | 0.7x |
|---|
| Alacer Gold Corp ($ASR) | -0.9x | -1.3x | -2.4x | -3.0x | -5.9x |
