Golden Star Resources Ltd reports 47.9% CAPEX growth while 13.3% Revenue decline
21.02.2017 • About Golden Star Resources Ltd (
$GSC) • By InTwits
Golden Star Resources Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Golden Star Resources Ltd is a company in decline: 2016 revenue growth was -13.3%, 5 years revenue CAGR was -14.0%
- Golden Star Resources Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 is 0.0%. Average EBITDA Margin for the same period was -12.7%0
- Golden Star Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.7%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 84.4 in 2016, 57.1 in 2015, 32.8 in 2014, 103 in 2013, 117 in 2012
- It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Golden Star Resources Ltd ($GSC) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 550.5 | 467.8 | 328.9 | 255.2 | 221.3 | -13.3% |
| Gross Profit | 177.0 | 90.7 | 24.0 | -27.6 | 27.5 | |
| SG&A | 24.1 | 21.5 | 16.4 | 14.3 | 25.8 | 80.3% |
| EBITDA | 133.4 | -295.1 | -50.6 | -40.3 | 21.1 | |
| Net Income | 7.2 | -265.9 | -73.1 | -67.7 | -39.6 | |
Balance Sheet
|
|---|
| Cash | 78.9 | 65.6 | 39.4 | 35.1 | 21.8 | -38.0% |
| Short Term Debt | 7.0 | 10.9 | 17.2 | 22.4 | 15.4 | -31.5% |
| Long Term Debt | 110.5 | 83.4 | 85.8 | 91.9 | 89.4 | -2.7% |
Cash flow
|
|---|
| Capex | 117.3 | 102.9 | 32.8 | 57.1 | 84.4 | 47.9% |
Ratios
|
|---|
| Revenue growth | 16.9% | -15.0% | -29.7% | -22.4% | -13.3% | |
| EBITDA growth | 57.9% | -321.3% | -82.8% | -20.5% | -152.4% | |
| Gross Margin | 32.1% | 19.4% | 7.3% | -10.8% | 12.4% | 23.3% |
| EBITDA Margin | 24.2% | -63.1% | -15.4% | -15.8% | 9.5% | 25.3% |
| Net Income Margin | 1.3% | -56.8% | -22.2% | -26.5% | -17.9% | 8.6% |
| SG&A, % of revenue | 4.4% | 4.6% | 5.0% | 5.6% | 11.6% | 6.0% |
| CAPEX, % of revenue | 21.3% | 22.0% | 10.0% | 22.4% | 38.1% | 15.8% |
| ROIC | 8.1% | -118.4% | -90.6% | -486.8% | | 486.8% |
| ROE | 1.8% | -129.0% | -200.5% | | | 0.0% |
| Net Debt/EBITDA | 0.3x | | | | 3.9x | 3.9x |
Golden Star Resources Ltd ($GSC) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 61 | 51 | 56 | 53 | -20.2% | -21.8% | -1.7% | -5.6% |
| EBITDA | 12 | -1 | 1 | 8 | 3,141.5% | | | -41.7% |
| Net Income | 2 | -22 | -23 | 3 | | | | -75.0% |
Balance Sheet
|
|---|
| Cash | 15 | 8 | 17 | 22 | -39.8% | -64.7% | -36.8% | -38.0% |
| Short Term Debt | 24 | 68 | 16 | 15 | 43.5% | 255.1% | 114.5% | -31.5% |
| Long Term Debt | 91 | 59 | 93 | 89 | -11.2% | -45.2% | 0.8% | -2.7% |
Ratios
|
|---|
| Gross Margin | 23.3% | 8.5% | 10.4% | 5.9% | 32.8% | 48.2% | 18.0% | -11.8% |
| EBITDA Margin | 20.2% | -1.3% | 2.0% | 15.6% | 19.7% | 78.4% | 6.3% | -9.7% |
| Net Income Margin | 3.4% | -42.8% | -41.6% | 6.5% | 20.5% | 50.7% | -29.5% | -18.0% |
Revenue and profitability
The company's Revenue dropped on 13.3%. Annual revenue decline showed slowdown in 16Q4 - revenue decreased on 5.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 25.3 pp from -15.8% to 9.5% in 2016.
Gross Margin jumped on 23.3 pp from -10.8% to 12.4% in 2016. SG&A as a % of Revenue increased on 6.0 pp from 5.6% to 11.6% in 2016.
Net Income marign increased on 8.6 pp from -26.5% to -17.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
Golden Star Resources Ltd's CAPEX/Revenue was 38.1% in 2016. CAPEX/Revenue jumped on 16.1 pp from 22.0% in 2013 to 38.1% in 2016. Average CAPEX/Revenue for the last three years was 23.5%.Golden Star Resources Ltd has spent a lot to CAPEX (400% of EBITDA) which didn't stop revenue from falling.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 5.0x Debt / EBITDA. Net Debt / EBITDA jumped3.9x from to 3.9x in 2016. Debt decreased on 8.3% while cash dropped on 38.0%.
Management team
The company's CEO is Samuel T Coetzer "Sam". Samuel T Coetzer "Sam" is a founder and has 5 years tenure at the company. Golden Star Resources Ltd's CFO is Andre Van Niekerk. Andre Van Niekerk has 4 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Golden Star Resources 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -2.5% | 2.0% | -1.7% | 6.8% |
|---|
| Golden Star Resources Ltd ($GSC) | | -15.0% | -29.7% | -22.4% | -13.3% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.2% | 22.7% | 19.1% | 16.9% | 24.8% |
|---|
| Golden Star Resources Ltd ($GSC) | 32.1% | 19.4% | 7.3% | -10.8% | 12.4% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 11.5% | 10.7% | 7.3% | 24.5% |
|---|
| Golden Star Resources Ltd ($GSC) | 24.2% | -63.1% | -15.4% | -15.8% | 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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.8% | 16.6% | 17.5% |
|---|
| Golden Star Resources Ltd ($GSC) | 21.3% | 22.0% | 10.0% | 22.4% | 38.1% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 1.3% | 1.6% | -3.6% | 4.4% |
|---|
| Golden Star Resources Ltd ($GSC) | 8.1% | -118.4% | -90.6% | -486.8% | |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
| Golden Star Resources Ltd ($GSC) | 0.3x | | | | 3.9x |
