Canfor Pulp Products Inc Net Income dropped on 45.8% in 2016 and EBITDA Margin decreased on 2.1 pp from 17.7% to 15.6%
08.02.2017 • About Canfor Pulp Products Inc (
$CFX) • By InTwits
Canfor Pulp Products Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canfor Pulp Products Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.1%. At the same time it's in pair with industry average of 33.0%.
- CAPEX is quite volatile: 20.9 in 2016, 73.3 in 2015, 126 in 2014, 134 in 2013, 123 in 2012
- The company has highly profitable business model: ROIC is at 17.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canfor Pulp Products Inc ($CFX) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 810 | 887 | 981 | 1,175 | 1,102 | -6.2% |
| Gross Profit | 52 | 99 | 153 | 236 | 200 | -15.6% |
| SG&A | 25 | 24 | 28 | 28 | 28 | -1.4% |
| EBITDA | 94 | 144 | 188 | 208 | 172 | -17.5% |
| Net Income | 9 | 42 | 90 | 107 | 58 | -45.8% |
Balance Sheet
|
|---|
| Cash | 0 | 14 | 77 | 18 | 52 | 196.6% |
| Short Term Debt | 109 | 11 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 50 | 50 | 50 | 50 | 0.0% |
Cash flow
|
|---|
| Capex | 89 | 61 | 58 | 68 | 64 | -6.3% |
Ratios
|
|---|
| Revenue growth | -13.9% | 9.4% | 10.6% | 19.8% | -6.2% | |
| EBITDA growth | -57.1% | 53.0% | 30.3% | 10.8% | -17.5% | |
| Gross Margin | 6.4% | 11.1% | 15.6% | 20.1% | 18.1% | -2.0% |
| EBITDA Margin | 11.6% | 16.3% | 19.2% | 17.7% | 15.6% | -2.1% |
| Net Income Margin | 1.1% | 4.7% | 9.1% | 9.1% | 5.2% | -3.8% |
| SG&A, % of revenue | 3.0% | 2.7% | 2.8% | 2.4% | 2.5% | 0.1% |
| CAPEX, % of revenue | 10.9% | 6.9% | 5.9% | 5.8% | 5.8% | -0.0% |
| ROIC | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% | -7.0% |
| ROE | 3.0% | 10.1% | 19.3% | 22.0% | 12.0% | -10.0% |
| Net Debt/EBITDA | 1.2x | 0.3x | -0.1x | 0.2x | -0.0x | -0.2x |
Canfor Pulp Products Inc ($CFX) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 295 | 257 | 292 | 258 | 7.9% | -6.8% | -0.9% | -22.1% |
| EBITDA | 58 | 22 | 50 | 42 | 1.2% | -39.3% | -14.8% | -25.1% |
| Net Income | 23 | 2 | 22 | 10 | -17.5% | -87.6% | -28.2% | -66.0% |
Balance Sheet
|
|---|
| Cash | 23 | 25 | 32 | 52 | -72.9% | -72.1% | 92.2% | 196.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 50 | 50 | 50 | 50 | 0.0% | 0.0% | 0.0% | 0.0% |
Ratios
|
|---|
| Gross Margin | 22.0% | 11.2% | 19.4% | 19.1% | -1.6% | -4.4% | -2.9% | -0.0% |
| EBITDA Margin | 19.6% | 8.6% | 17.1% | 16.3% | -1.3% | -4.6% | -2.8% | -0.7% |
| Net Income Margin | 7.8% | 0.9% | 7.7% | 3.9% | -2.4% | -5.6% | -2.9% | -5.1% |
Revenue and profitability
The company's Revenue decreased on 6.2%. Revenue decline showed acceleration in 16Q4 - it was 22.1% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 17.7% to 15.6% in 2016.
Gross Margin decreased on 2.0 pp from 20.1% to 18.1% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign decreased on 3.8 pp from 9.1% to 5.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.8% in 2016. CAPEX/Revenue decreased slightly on 1.1 pp from 6.9% in 2013 to 5.8% in 2016. Average CAPEX/Revenue for the last three years was 5.8%.
Return on investment
The company operates at good ROIC (17.04%) while ROE is low (11.99%). ROIC decreased on 7.0 pp from 24.1% to 17.0% in 2016. ROE dropped on 10.0 pp from 22.0% to 12.0% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.3x. Net Debt / EBITDA dropped on 0.2x from 0.2x to -0.011x in 2016. Debt didn't change in 2016 while cash jumped on 197%.
Appendix 1: Peers in Basic Materials
Below you can find Canfor Pulp Products Inc 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% | -2.9% | 6.8% |
|---|
| Canfor Pulp Products Inc ($CFX) | | 9.4% | 10.6% | 19.8% | -6.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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 (94 companies) | 32.2% | 22.7% | 19.1% | 16.4% | 24.8% |
|---|
| Canfor Pulp Products Inc ($CFX) | 6.4% | 11.1% | 15.6% | 20.1% | 18.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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 Pulp Products Inc ($CFX) | 11.6% | 16.3% | 19.2% | 17.7% | 15.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% | 17.2% | 18.3% |
|---|
| Canfor Pulp Products Inc ($CFX) | 10.9% | 6.9% | 5.9% | 5.8% | 5.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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 ($SXP) | 14.1% | 18.5% | 16.5% | 23.4% | 19.3% |
| West Fraser Timber Co Ltd ($WFT) | 6.3% | 15.9% | 16.2% | 9.0% | 16.7% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.0% |
|---|
| Canfor Pulp Products Inc ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 |
|---|
| Canfor Pulp Products Inc ($CFX) | 1.2x | 0.3x | -0.1x | 0.2x | -0.0x |
