Canfor Corp reports 53.5% EBITDA growth and 7.9% Revenue growth
08.02.2017 • About Canfor Corp (
$CFP) • By InTwits
Canfor Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canfor Corp is a growth stock: 2016 revenue growth was 7.9%, 5 year revenue CAGR was 11.8% at 2016 ROIC 12.3%
- Canfor Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 925 in 2016, 906 in 2015, 741 in 2014, 715 in 2013, 269 in 2012
- The company has highly profitable business model: ROIC is at 12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canfor Corp ($CFP) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,643 | 3,195 | 3,348 | 3,925 | 4,235 | 7.9% |
| Gross Profit | 328 | 609 | 597 | 469 | 652 | 38.8% |
| SG&A | 61 | 68 | 79 | 90 | 104 | 15.5% |
| EBITDA | 248 | 518 | 512 | 355 | 545 | 53.5% |
| Net Income | 26 | 229 | 175 | 25 | 151 | 510.9% |
Balance Sheet
|
|---|
| Cash | 0 | 90 | 158 | 98 | 157 | 60.6% |
| Short Term Debt | 211 | 75 | 68 | 209 | 28 | -86.6% |
| Long Term Debt | 100 | 153 | 229 | 456 | 448 | -1.8% |
Cash flow
|
|---|
| Capex | 202 | 237 | 234 | 240 | 234 | -2.6% |
Ratios
|
|---|
| Revenue growth | 9.1% | 20.9% | 4.8% | 17.3% | 7.9% | |
| EBITDA growth | 37.1% | 108.3% | -1.1% | -30.6% | 53.5% | |
| Gross Margin | 12.4% | 19.0% | 17.8% | 12.0% | 15.4% | 3.4% |
| EBITDA Margin | 9.4% | 16.2% | 15.3% | 9.0% | 12.9% | 3.8% |
| Net Income Margin | 1.0% | 7.2% | 5.2% | 0.6% | 3.6% | 2.9% |
| SG&A, % of revenue | 2.3% | 2.1% | 2.3% | 2.3% | 2.4% | 0.2% |
| CAPEX, % of revenue | 7.6% | 7.4% | 7.0% | 6.1% | 5.5% | -0.6% |
| ROIC | 4.2% | 17.6% | 15.8% | 6.1% | 12.3% | 6.2% |
| ROE | 2.4% | 18.4% | 12.7% | 1.8% | 10.7% | 8.9% |
| Net Debt/EBITDA | 1.3x | 0.3x | 0.3x | 1.6x | 0.6x | -1.0x |
Canfor Corp ($CFP) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,068 | 1,022 | 1,101 | 1,044 | 14.8% | 7.3% | 11.2% | -0.9% |
| EBITDA | 125 | 126 | 158 | 137 | -6.3% | 80.5% | 158.6% | 50.4% |
| Net Income | 26 | 36 | 51 | 38 | -11.3% | 224.3% | | 2,275.0% |
Balance Sheet
|
|---|
| Cash | 133 | 158 | 142 | 157 | -38.0% | 9.5% | 63.6% | 60.6% |
| Short Term Debt | 205 | 180 | 146 | 28 | 12.0% | 26.8% | -27.4% | -86.6% |
| Long Term Debt | 440 | 439 | 442 | 448 | 92.3% | 92.0% | 146.4% | -1.8% |
Ratios
|
|---|
| Gross Margin | 14.0% | 14.8% | 16.9% | 15.7% | -2.9% | 5.1% | 6.7% | 4.5% |
| EBITDA Margin | 11.7% | 12.3% | 14.3% | 13.1% | -2.6% | 5.0% | 8.2% | 4.5% |
| Net Income Margin | 2.4% | 3.5% | 4.6% | 3.6% | -0.7% | 2.4% | 6.4% | 3.5% |
Revenue and profitability
Canfor Corp's Revenue increased on 7.9%. Revenue growth showed slow down in 16Q4 - it was -0.9% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.8 pp from 9.0% to 12.9% in 2016.
Gross Margin increased on 3.4 pp from 12.0% to 15.4% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign increased on 2.9 pp from 0.63% to 3.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Canfor Corp had CAPEX/Revenue of 5.5%. Canfor Corp's CAPEX/Revenue decreased slightly on 1.9 pp from 7.4% in 2013 to 5.5% in 2016. Average CAPEX/Revenue for the last three years was 6.2%.
Return on investment
The company operates at good ROIC (12.34%) while ROE is low (10.72%). ROIC increased on 6.2 pp from 6.1% to 12.3% in 2016. ROE increased on 8.9 pp from 1.8% to 10.7% in 2016.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 1.6x to 0.6x in 2016. Debt dropped on 28.4% while cash jumped on 60.6%.
Appendix 1: Peers in Basic Materials
Below we provide Canfor 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% | 1.8% | -2.9% | 5.7% |
|---|
| Canfor Corp ($CFP) | | 20.9% | 4.8% | 17.3% | 7.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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% | 19.1% | 16.9% | 24.8% |
|---|
| Canfor Corp ($CFP) | 12.4% | 19.0% | 17.8% | 12.0% | 15.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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% |
|---|
| Canfor Corp ($CFP) | 9.4% | 16.2% | 15.3% | 9.0% | 12.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% | 17.2% | 18.3% |
|---|
| Canfor Corp ($CFP) | 7.6% | 7.4% | 7.0% | 6.1% | 5.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% |
|---|
| Canfor Corp ($CFP) | 4.2% | 17.6% | 15.8% | 6.1% | 12.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 | 1.5x | 0.7x |
|---|
| Canfor Corp ($CFP) | 1.3x | 0.3x | 0.3x | 1.6x | 0.6x |
