Cameco Corp EBITDA dropped on 58.8% in 2016 and Revenue dropped on 11.7%
09.02.2017 • About Cameco Corp (
$CCO) • By InTwits
Cameco Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cameco Corp doesn't have a profitable business model yet: 2016 ROIC is -2.3%
- Cameco Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.8%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 217 in 2016, 359 in 2015, 480 in 2014, 646 in 2013, 672 in 2012
- The company has unprofitable business model: ROIC is at -2.3%
- It operates with high leverage: Net Debt/EBITDA is 5.1x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cameco Corp ($CCO) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,891 | 2,439 | 2,398 | 2,754 | 2,431 | -11.7% |
| Gross Profit | 540 | 607 | 638 | 697 | 463 | -33.5% |
| SG&A | 181 | 185 | 176 | 187 | 207 | 10.6% |
| EBITDA | 304 | 547 | 377 | 558 | 230 | -58.8% |
| Net Income | 253 | 318 | 185 | 65 | -62 | -194.4% |
Balance Sheet
|
|---|
| Cash | 749 | 229 | 567 | 459 | 320 | -30.2% |
| Short Term Debt | 67 | 91 | 0 | 0 | 0 | |
| Long Term Debt | 1,292 | 1,293 | 1,491 | 1,492 | 1,493 | 0.1% |
Cash flow
|
|---|
| Capex | 672 | 646 | 480 | 359 | 217 | -39.5% |
Ratios
|
|---|
| Revenue growth | -20.7% | 29.0% | -1.7% | 14.9% | -11.7% | |
| EBITDA growth | -61.9% | 80.3% | -31.1% | 47.9% | -58.8% | |
| Gross Margin | 28.6% | 24.9% | 26.6% | 25.3% | 19.1% | -6.2% |
| EBITDA Margin | 16.1% | 22.4% | 15.7% | 20.3% | 9.5% | -10.8% |
| Net Income Margin | 13.4% | 13.1% | 7.7% | 2.4% | -2.5% | -4.9% |
| SG&A, % of revenue | 9.6% | 7.6% | 7.4% | 6.8% | 8.5% | 1.7% |
| CAPEX, % of revenue | 35.5% | 26.5% | 20.0% | 13.0% | 8.9% | -4.1% |
| ROIC | 1.4% | 4.2% | 0.6% | 3.8% | -2.3% | -6.1% |
| ROE | 5.1% | 6.2% | 3.4% | 1.2% | -1.1% | -2.3% |
| Net Debt/EBITDA | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x | 3.3x |
Cameco Corp ($CCO) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 408 | 466 | 670 | 887 | -27.8% | -17.4% | 3.2% | -9.0% |
| EBITDA | 91 | -44 | 214 | -31 | -29.2% | -128.1% | 36.5% | -126.5% |
| Net Income | 78 | -137 | 142 | -144 | | -256.0% | | |
Balance Sheet
|
|---|
| Cash | 199 | 132 | 199 | 320 | -64.3% | -60.2% | 218.8% | -30.2% |
| Short Term Debt | 130 | 235 | 26 | 0 | | | | |
| Long Term Debt | 1,493 | 1,493 | 1,493 | 1,493 | 0.1% | 0.1% | 0.1% | 0.1% |
Ratios
|
|---|
| Gross Margin | 28.9% | 9.2% | 21.8% | 17.6% | 6.1% | -17.9% | 1.3% | -11.3% |
| EBITDA Margin | 22.2% | -9.3% | 32.0% | -3.5% | -0.4% | -36.8% | 7.8% | -15.6% |
| Net Income Margin | 19.1% | -29.5% | 21.2% | -16.3% | 20.7% | -45.0% | 21.8% | -15.3% |
Revenue and profitability
The company's Revenue dropped on 11.7%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased on 9.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.8 pp from 20.3% to 9.5% in 2016.
Gross Margin decreased on 6.2 pp from 25.3% to 19.1% in 2016. SG&A as a % of Revenue increased slightly on 1.7 pp from 6.8% to 8.5% in 2016.
Net Income marign decreased on 4.9 pp from 2.4% to -2.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 8.9%. The company's CAPEX/Revenue dropped on 17.6 pp from 26.5% in 2013 to 8.9% in 2016. It's average CAPEX/Revenue for the last three years was 14.0%.Cameco Corp invested a big chunk of EBITDA (94.3%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-2.29%) and ROE (-1.14%). ROIC decreased on 6.1 pp from 3.8% to -2.3% in 2016. ROE decreased on 2.3 pp from 1.2% to -1.1% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.1x and Debt / EBITDA is 6.5x. Net Debt / EBITDA surged on 3.3x from 1.9x to 5.1x in 2016. Debt showed almost no change in 2016 while cash dropped on 30.2%.
Management team
The company's CEO Timothy S Gitzel "Tim" is a founder and has spent 7 years at the company. Cameco Corp's CFO Grant E Isaac has spent 7 years at the company.
Appendix 1: Peers in Basic Materials
Below we provide Cameco 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% | -2.9% | 6.8% |
|---|
| Cameco Corp ($CCO) | | 29.0% | -1.7% | 14.9% | -11.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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% | 22.1% | 18.2% | 16.4% | 24.8% |
|---|
| Cameco Corp ($CCO) | 28.6% | 24.9% | 26.6% | 25.3% | 19.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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% |
|---|
| Cameco Corp ($CCO) | 16.1% | 22.4% | 15.7% | 20.3% | 9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% | 27.4% | 17.5% | 17.2% | 18.3% |
|---|
| Cameco Corp ($CCO) | 35.5% | 26.5% | 20.0% | 13.0% | 8.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% | 1.6% | -3.8% | 4.8% |
|---|
| Cameco Corp ($CCO) | 1.4% | 4.2% | 0.6% | 3.8% | -2.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 ($CUM) | 3.9x | 5.0x | 5.4x | 30.6x | 5.1x |
| Resolute Forest Products Inc ($RFP) | 1.3x | 1.1x | 3.8x | 29.6x | 4.0x |
| |
|---|
| Median (57 companies) | 0.3x | 0.7x | 1.1x | 1.5x | 0.6x |
|---|
| Cameco Corp ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
