Barrick Gold Corp reports 123% Net Income growth and 56.1 pp EBITDA Margin growth from -5.8% to 50.3%
15.02.2017 • About Barrick Gold Corp (
$ABX) • By InTwits
Barrick Gold Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Barrick Gold Corp is a company in decline: 2016 revenue growth was -5.2%, 5 years revenue CAGR was -9.7%
- Barrick Gold Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 is 0.0%. Average EBITDA Margin for the same period was -4.0%0
- Barrick Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.4%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 1,126 in 2016, 1,713 in 2015, 2,432 in 2014, 5,501 in 2013, 6,773 in 2012
- The company has highly profitable business model: ROIC is at 14.0%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Barrick Gold Corp ($ABX) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,394 | 12,527 | 10,239 | 9,029 | 8,558 | -5.2% |
| Gross Profit | 7,137 | 5,198 | 3,409 | 2,122 | 3,153 | 48.6% |
| SG&A | 503 | 390 | 385 | 233 | 256 | 9.9% |
| EBITDA | 1,348 | -7,087 | -220 | -520 | 4,306 | |
| Net Income | -538 | -10,366 | -2,907 | -2,838 | 655 | |
Balance Sheet
|
|---|
| Cash | 2,097 | 2,404 | 2,699 | 2,455 | 2,389 | -2.7% |
| Short Term Debt | 1,848 | 179 | 333 | 203 | 143 | -29.6% |
| Long Term Debt | 12,095 | 12,901 | 12,748 | 9,765 | 7,788 | -20.2% |
Cash flow
|
|---|
| Capex | 6,773 | 5,501 | 2,432 | 1,713 | 1,126 | -34.3% |
Ratios
|
|---|
| Revenue growth | 1.1% | -13.0% | -18.3% | -11.8% | -5.2% | |
| EBITDA growth | -83.3% | -625.7% | -96.9% | 136.4% | -928.1% | |
| Gross Margin | 49.6% | 41.5% | 33.3% | 23.5% | 36.8% | 13.3% |
| EBITDA Margin | 9.4% | -56.6% | -2.1% | -5.8% | 50.3% | 56.1% |
| Net Income Margin | -3.7% | -82.7% | -28.4% | -31.4% | 7.7% | 39.1% |
| SG&A, % of revenue | 3.5% | 3.1% | 3.8% | 2.6% | 3.0% | 0.4% |
| CAPEX, % of revenue | 47.1% | 43.9% | 23.8% | 19.0% | 13.2% | -5.8% |
| ROIC | -0.7% | -24.6% | -6.4% | -9.7% | 14.0% | 23.7% |
| ROE | -2.4% | -58.4% | -24.4% | -32.6% | 8.7% | 41.2% |
| Net Debt/EBITDA | 8.8x | | | | 1.3x | 1.3x |
Barrick Gold Corp ($ABX) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,930 | 2,012 | 2,297 | 2,319 | -14.0% | -9.8% | -0.8% | 3.6% |
| EBITDA | 844 | 913 | 1,180 | 1,369 | 4.6% | 23.7% | 154.3% | |
| Net Income | -83 | 138 | 175 | 425 | -245.6% | | | |
Balance Sheet
|
|---|
| Cash | 2,323 | 2,441 | 2,648 | 2,389 | 2.9% | 15.0% | -20.2% | -2.7% |
| Short Term Debt | 186 | 175 | 153 | 143 | -37.6% | -65.2% | -85.4% | -29.6% |
| Long Term Debt | 8,940 | 8,825 | 8,386 | 7,788 | -29.1% | -30.2% | -26.7% | -20.2% |
Ratios
|
|---|
| Gross Margin | 31.4% | 33.6% | 43.8% | 37.3% | 7.5% | 9.3% | 19.0% | 16.3% |
| EBITDA Margin | 43.7% | 45.4% | 51.4% | 59.0% | 7.8% | 12.3% | 31.3% | 172.0% |
| Net Income Margin | -4.3% | 6.9% | 7.6% | 18.3% | -6.8% | 7.3% | 19.0% | 135.5% |
Revenue and profitability
Barrick Gold Corp's Revenue decreased on 5.2%. Annual revenue decline showed slowdown in 16Q4 - revenue increased on 3.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 56.1 pp from -5.8% to 50.3% in 2016.
Gross Margin surged on 13.3 pp from 23.5% to 36.8% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign surged on 39.1 pp from -31.4% to 7.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Barrick Gold Corp had CAPEX/Revenue of 13.2%. The company's CAPEX/Revenue dropped on 30.8 pp from 43.9% in 2013 to 13.2% in 2016. It's average level of CAPEX/Revenue for the last three years was 18.6%.
Return on investment
The company operates at good ROIC (14.01%) while ROE is low (8.67%). ROIC surged on 23.7 pp from -9.7% to 14.0% in 2016. ROE surged on 41.2 pp from -32.6% to 8.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.8x. Net Debt / EBITDA surged1.3x from to 1.3x in 2016. Debt dropped on 20.4% while cash decreased on 2.7%.
Appendix 1: Peers in Basic Materials
Below we provide Barrick Gold 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -2.5% | 2.0% | -1.7% | 6.8% |
|---|
| Barrick Gold Corp ($ABX) | | -13.0% | -18.3% | -11.8% | -5.2% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.4% | 24.7% |
|---|
| Barrick Gold Corp ($ABX) | 49.6% | 41.5% | 33.3% | 23.5% | 36.8% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 11.5% | 10.7% | 7.3% | 23.0% |
|---|
| Barrick Gold Corp ($ABX) | 9.4% | -56.6% | -2.1% | -5.8% | 50.3% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 27.4% | 26.5% | 17.5% | 16.6% | 18.3% |
|---|
| Barrick Gold Corp ($ABX) | 47.1% | 43.9% | 23.8% | 19.0% | 13.2% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 1.3% | 1.6% | -3.6% | 4.0% |
|---|
| Barrick Gold Corp ($ABX) | -0.7% | -24.6% | -6.4% | -9.7% | 14.0% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
| Barrick Gold Corp ($ABX) | 8.8x | | | | 1.3x |
