Dundee Precious Metals Inc EBITDA dropped on 220% in 2016 while Revenue increased on 7.4%
15.02.2017 • About Dundee Precious Metals Inc (
$DPM) • By InTwits
Dundee Precious Metals Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dundee Precious Metals Inc doesn't have a profitable business model yet: 2016 ROIC is -18.8%
- EBITDA Margin is declining: -17.9% in 2016 vs. 16.0% in 2015 vs. 30.4% in 2012
- EBITDA Margin is quite volatile: -17.9% in 2016, 16.0% in 2015, 26.9% in 2014, 27.9% in 2013, 30.4% in 2012
- Dundee Precious Metals Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 36.7%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 45.7 in 2016, 74.9 in 2015, 163 in 2014, 212 in 2013, 101 in 2012
- The company has unprofitable business model: ROIC is at -18.8%
- It operates with high leverage: Net Debt/EBITDA is 6.0x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dundee Precious Metals Inc ($DPM) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 384.7 | 344.7 | 324.0 | 260.1 | 279.5 | 7.4% |
| Gross Profit | 157.0 | 89.8 | 61.8 | -2.2 | 21.5 | |
| SG&A | 37.9 | 29.6 | 32.2 | 18.6 | 16.1 | -13.8% |
| EBITDA | 116.9 | 96.1 | 87.1 | 41.6 | -49.9 | -220.1% |
| Net Income | 54.4 | 22.5 | -58.9 | -47.0 | -151.6 | |
Balance Sheet
|
|---|
| Cash | 121.5 | 48.9 | 36.3 | 26.6 | 11.8 | -55.8% |
| Short Term Debt | 17.8 | 16.6 | 16.3 | 16.3 | 16.1 | -0.9% |
| Long Term Debt | 63.9 | 67.1 | 141.5 | 130.8 | 25.0 | -80.9% |
Cash flow
|
|---|
| Capex | 101.3 | 211.9 | 163.2 | 74.9 | 45.7 | -39.1% |
Ratios
|
|---|
| Revenue growth | 13.7% | -10.4% | -6.0% | -19.7% | 7.4% | |
| EBITDA growth | 8.2% | -17.8% | -9.4% | -52.2% | -220.1% | |
| Gross Margin | 40.8% | 26.0% | 19.1% | -0.8% | 7.7% | 8.5% |
| EBITDA Margin | 30.4% | 27.9% | 26.9% | 16.0% | -17.9% | -33.9% |
| Net Income Margin | 14.1% | 6.5% | -18.2% | -18.1% | -54.2% | -36.2% |
| SG&A, % of revenue | 9.9% | 8.6% | 10.0% | 7.2% | 5.7% | -1.4% |
| CAPEX, % of revenue | 26.3% | 61.5% | 50.4% | 28.8% | 16.3% | -12.5% |
| ROIC | 9.2% | 5.1% | 2.5% | -3.6% | -18.8% | -15.2% |
| ROE | 7.5% | 3.0% | -8.1% | -7.0% | -25.5% | -18.5% |
| Net Debt/EBITDA | -0.3x | 0.4x | 1.4x | 2.9x | | -2.9x |
Dundee Precious Metals Inc ($DPM) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 70 | 72 | 55 | 82 | 16.8% | 23.7% | 3.8% | 27.2% |
| EBITDA | 26 | 19 | 3 | -98 | 141.5% | 50.8% | -67.3% | -1,309.3% |
| Net Income | -6 | -6 | -30 | -110 | | -409.6% | -1,187.4% | |
Balance Sheet
|
|---|
| Cash | 24 | 24 | 62 | 12 | 46.3% | -20.5% | 254.2% | -55.8% |
| Short Term Debt | 16 | 16 | 16 | 16 | 0.0% | 0.0% | 0.0% | -0.9% |
| Long Term Debt | 141 | 123 | 78 | 25 | -0.6% | -8.1% | -41.8% | -80.9% |
Ratios
|
|---|
| Gross Margin | 18.7% | 10.4% | -22.4% | 16.0% | 15.9% | 3.9% | -20.6% | 26.8% |
| EBITDA Margin | 36.7% | 26.3% | 5.3% | -119.0% | 19.0% | 4.7% | -11.4% | -131.5% |
| Net Income Margin | -8.6% | -7.8% | -54.5% | -134.0% | -3.5% | -10.9% | -59.7% | -58.8% |
Revenue and profitability
The company's Revenue increased on 7.4%. Revenue growth showed acceleration in 16Q4 - it increased 27.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 30.6 pp from 7.9% to 38.5% in 2016.
Gross Margin increased on 8.5 pp from -0.83% to 7.7% in 2016. SG&A as a % of Revenue decreased slightly on 1.4 pp from 7.2% to 5.7% in 2016.
Net Income marign dropped on 36.2 pp from -18.1% to -54.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Dundee Precious Metals Inc had CAPEX/Revenue of 16.3%. CAPEX/Revenue dropped on 45.1 pp from 61.5% in 2013 to 16.3% in 2016. Average CAPEX/Revenue for the last three years was 31.8%.
Return on investment
The company operates at negative ROIC (-18.80%) and ROE (-25.49%). ROIC dropped on 15.2 pp from -3.6% to -18.8% in 2016. ROE dropped on 18.5 pp from -7.0% to -25.5% in 2016.
Leverage (Debt)
Debt level is 6.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 2.9x from 2.9x to in 2016. Debt dropped on 72.0% while cash dropped on 55.8%.
Management team
The company's CEO Richard Howes "Rick" is a founder and has spent 5 years at the company. Dundee Precious Metals Inc's CFO is Hume Kyle. Hume Kyle has 7 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Dundee Precious Metals Inc 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -2.5% | 2.0% | -1.7% | 5.7% |
|---|
| Dundee Precious Metals Inc ($DPM) | | -10.4% | -6.0% | -19.7% | 7.4% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.9% | 24.8% |
|---|
| Dundee Precious Metals Inc ($DPM) | 40.8% | 26.0% | 19.1% | -0.8% | 7.7% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 10.8% | 10.3% | 6.7% | 24.5% |
|---|
| Dundee Precious Metals Inc ($DPM) | 30.4% | 27.9% | 26.9% | 16.0% | -17.9% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 26.5% | 17.5% | 16.6% | 18.3% |
|---|
| Dundee Precious Metals Inc ($DPM) | 26.3% | 61.5% | 50.4% | 28.8% | 16.3% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.8% |
|---|
| Dundee Precious Metals Inc ($DPM) | 9.2% | 5.1% | 2.5% | -3.6% | -18.8% |
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 (58 companies) | 0.3x | 0.9x | 1.1x | 1.5x | 0.6x |
|---|
