Agnico Eagle Mines Ltd Net Income surged on 546% in 2016 and EBITDA Margin increased on 6.9 pp from 38.8% to 45.7%
15.02.2017 • About Agnico Eagle Mines Ltd (
$AEM) • By InTwits
Agnico Eagle Mines Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 45.7% in FY2016 vs. 38.8% in FY2015 vs. 41.1% in FY2012
- Agnico Eagle Mines Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 26.6%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 52.2 in 2016, 31.7 in 2015, 58.0 in 2014, 41.5 in 2013, 13.2 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.7x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Agnico Eagle Mines Ltd ($AEM) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,918 | 1,638 | 1,897 | 1,985 | 2,138 | 7.7% |
| Gross Profit | 1,020 | 772 | 892 | 990 | 1,106 | 11.7% |
| SG&A | 119 | 114 | 119 | 97 | 103 | 6.0% |
| EBITDA | 787 | 582 | 702 | 771 | 977 | 26.7% |
| Net Income | 311 | -687 | 83 | 25 | 159 | 546.1% |
Balance Sheet
|
|---|
| Cash | 298 | 139 | 178 | 124 | 540 | 334.9% |
| Short Term Debt | 13 | 12 | 74 | 24 | 135 | 463.4% |
| Long Term Debt | 830 | 987 | 1,322 | 1,118 | 1,073 | -4.1% |
Cash flow
|
|---|
| Capex | 446 | 621 | 475 | 450 | 516 | 14.7% |
Ratios
|
|---|
| Revenue growth | 5.3% | -14.6% | 15.8% | 4.7% | 7.7% | |
| EBITDA growth | -272.0% | -26.1% | 20.6% | 9.8% | 26.7% | |
| Gross Margin | 53.2% | 47.1% | 47.0% | 49.9% | 51.7% | 1.9% |
| EBITDA Margin | 41.1% | 35.5% | 37.0% | 38.8% | 45.7% | 6.9% |
| Net Income Margin | 16.2% | -41.9% | 4.4% | 1.2% | 7.4% | 6.2% |
| SG&A, % of revenue | 6.2% | 6.9% | 6.3% | 4.9% | 4.8% | -0.1% |
| CAPEX, % of revenue | 23.2% | 37.9% | 25.1% | 22.7% | 24.1% | 1.5% |
| ROIC | 10.8% | 5.9% | 5.1% | 2.6% | 5.7% | 3.1% |
| ROE | 9.4% | -22.4% | 2.4% | 0.6% | 3.7% | 3.1% |
| Net Debt/EBITDA | 0.7x | 1.5x | 1.7x | 1.3x | 0.7x | -0.6x |
Agnico Eagle Mines Ltd ($AEM) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 491 | 538 | 611 | 499 | 1.4% | 5.4% | 20.1% | 3.4% |
| EBITDA | 193 | 220 | 267 | 296 | -0.2% | 14.5% | 45.0% | 47.6% |
| Net Income | 28 | 19 | 49 | 63 | -3.3% | 88.3% | 3,717.0% | |
Balance Sheet
|
|---|
| Cash | 163 | 468 | 619 | 540 | 17.9% | 195.5% | 206.3% | 334.9% |
| Short Term Debt | 24 | 138 | 137 | 135 | -65.4% | 340.1% | 380.1% | 463.4% |
| Long Term Debt | 1,065 | 1,073 | 1,073 | 1,073 | -12.7% | -9.1% | -10.8% | -4.1% |
Ratios
|
|---|
| Gross Margin | 50.3% | 52.5% | 54.6% | 48.9% | 1.4% | 4.2% | 4.6% | -3.5% |
| EBITDA Margin | 39.4% | 40.9% | 43.8% | 59.3% | -0.6% | 3.2% | 7.5% | 17.8% |
| Net Income Margin | 5.7% | 3.5% | 8.1% | 12.6% | -0.3% | 1.6% | 7.8% | 15.8% |
Revenue and profitability
Agnico Eagle Mines Ltd's Revenue increased on 7.7%. Revenue growth showed slow down in FY16Q4 - it was 3.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.9 pp from 38.8% to 45.7% in FY2016.
Gross Margin increased slightly on 1.9 pp from 49.9% to 51.7% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign increased on 6.2 pp from 1.2% to 7.4% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 24.1%. CAPEX/Revenue dropped on 13.7 pp from 37.9% in FY2013 to 24.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 24.0%.The company maintained rich investment policy and has spent a big chunk of EBITDA (52.8%) to CAPEX.
Return on investment
The company operates at low ROIC (5.75%) and ROE (3.68%). ROIC increased on 3.1 pp from 2.6% to 5.7% in FY2016. ROE increased on 3.1 pp from 0.60% to 3.7% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 1.2x. Net Debt / EBITDA dropped on 0.6x from 1.3x to 0.7x in FY2016. Debt increased on 5.8% while cash surged on 335%.
Management team
Agnico Eagle Mines Ltd's CEO Sean Boyd is a founder and has spent 20 years at the company. The company's CFO is David Smith. David Smith has 6 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Agnico Eagle Mines Ltd 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -2.5% | 1.8% | -2.9% | 5.7% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | | -14.6% | 15.8% | 4.7% | 7.7% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.4% | 24.7% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 53.2% | 47.1% | 47.0% | 49.9% | 51.7% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 10.8% | 10.3% | 6.7% | 23.0% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 41.1% | 35.5% | 37.0% | 38.8% | 45.7% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 26.5% | 17.5% | 16.6% | 17.5% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 23.2% | 37.9% | 25.1% | 22.7% | 24.1% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.0% |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 10.8% | 5.9% | 5.1% | 2.6% | 5.7% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.7x | 1.1x | 1.6x | 0.6x |
|---|
| Agnico Eagle Mines Ltd ($AEM) | 0.7x | 1.5x | 1.7x | 1.3x | 0.7x |
