Sandstorm Gold Ltd reports 159% Net Income growth and 8.1 pp EBITDA Margin growth from 56.5% to 64.6%
21.02.2017 • About Sandstorm Gold Ltd (
$SSL) • By InTwits
Sandstorm Gold Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sandstorm Gold Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 150.1%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 10.8 in 2016, 217 in 2015, 27.9 in 2014, 71.1 in 2013, 85.1 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sandstorm Gold Ltd ($SSL) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 55.943 | 59.836 | 56.494 | 52.663 | 62.371 | 18.4% |
| Gross Profit | 29.695 | 20.713 | 14.198 | 3.785 | 21.883 | 478.2% |
| SG&A | 7.235 | 13.732 | 6.984 | 5.690 | 5.031 | -11.6% |
| EBITDA | 41.558 | 29.874 | 35.105 | 29.747 | 40.277 | 35.4% |
| Net Income | 21.927 | -73.752 | 11.515 | -43.056 | 25.254 | |
Balance Sheet
|
|---|
| Cash | 127.359 | 98.936 | 90.224 | 5.346 | 21.434 | 300.9% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 83.500 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 85.080 | 71.092 | 27.907 | 217.345 | 10.806 | -95.0% |
Ratios
|
|---|
| Revenue growth | 86.7% | 7.0% | -5.6% | -6.8% | 18.4% | |
| EBITDA growth | 117.4% | -28.1% | 17.5% | -15.3% | 35.4% | |
| Gross Margin | 53.1% | 34.6% | 25.1% | 7.2% | 35.1% | 27.9% |
| EBITDA Margin | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% | 8.1% |
| Net Income Margin | 39.2% | -123.3% | 20.4% | -81.8% | 40.5% | 122.2% |
| SG&A, % of revenue | 12.9% | 22.9% | 12.4% | 10.8% | 8.1% | -2.7% |
| CAPEX, % of revenue | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% | -395.4% |
| ROIC | 11.0% | 1.5% | 1.7% | -1.4% | 2.4% | 3.8% |
| ROE | 9.0% | -20.9% | 2.9% | -10.4% | 5.4% | 15.9% |
| Net Debt/EBITDA | -3.1x | -3.3x | -2.6x | 2.6x | -0.5x | -3.2x |
Sandstorm Gold Ltd ($SSL) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 16 | 17 | 16 | -12.4% | 1.8% | 39.1% | 66.9% |
| EBITDA | 8 | 10 | 11 | 11 | -8.1% | 7.7% | 67.8% | 123.4% |
| Net Income | 13 | 5 | 7 | -0 | 1,495.0% | | | |
Balance Sheet
|
|---|
| Cash | 5 | 3 | 10 | 21 | -86.1% | -94.0% | -78.4% | 300.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 77 | 60 | 0 | 0 | | | | -100.0% |
Ratios
|
|---|
| Gross Margin | 38.2% | 33.4% | 37.3% | 31.9% | 22.1% | 25.0% | 31.5% | 38.8% |
| EBITDA Margin | 61.2% | 63.5% | 67.3% | 65.6% | 2.9% | 3.5% | 11.5% | 16.6% |
| Net Income Margin | 98.3% | 33.1% | 41.1% | -0.1% | 92.9% | 120.3% | 86.4% | 253.0% |
Revenue and profitability
The company's Revenue jumped on 18.4%. Revenue growth showed acceleration in 16Q4 - it increased 66.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.8 pp from 5.9% to 7.7% in FY2016.
Gross Margin surged on 27.9 pp from 7.2% to 35.1% in 2016. SG&A as a % of Revenue decreased on 2.7 pp from 10.8% to 8.1% in 2016.
Net Income marign surged on 122 pp from -81.8% to 40.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
Sandstorm Gold Ltd's CAPEX/Revenue was 17.3% in 2016. CAPEX/Revenue dropped on 101 pp from 119% in 2013 to 17.3% in 2016. It's average CAPEX/Revenue for the last three years was 160%.
Return on investment
The company operates at low ROIC (2.40%) and ROE (5.43%). ROIC increased on 3.8 pp from -1.4% to 2.4% in 2016. ROE surged on 15.9 pp from -10.4% to 5.4% in 2016.
Leverage (Debt)
The company paid down all the debt in 2016. Cash surged on 301%.
Management team
Sandstorm Gold Ltd's CEO is Nolan Allan Watson. Nolan Allan Watson is a founder and has 10 years tenure at the company. The company's CFO is Erfan Kazemi. Erfan Kazemi has 7 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Sandstorm Gold Ltd 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 2.0% | -1.7% | 5.7% |
|---|
| Sandstorm Gold Ltd ($SSL) | | 7.0% | -5.6% | -6.8% | 18.4% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.9% | 24.7% |
|---|
| Sandstorm Gold Ltd ($SSL) | 53.1% | 34.6% | 25.1% | 7.2% | 35.1% |
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% |
| Alacer Gold Corp ($ASR) | 67.1% | 57.6% | 50.5% | 51.5% | 25.6% |
| |
|---|
| Median (100 companies) | 17.4% | 10.8% | 10.3% | 6.7% | 23.0% |
|---|
| Sandstorm Gold Ltd ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($LGO) | | | | 567.6% | |
| Silver Wheaton Corp ($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% | |
| Amerigo Resources Ltd ($ARG) | 13.0% | 9.3% | 9.8% | 99.6% | |
| |
|---|
| Median (100 companies) | 27.4% | 26.5% | 17.5% | 16.6% | 18.3% |
|---|
| Sandstorm Gold Ltd ($SSL) | 152.1% | 118.8% | 49.4% | 412.7% | 17.3% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.8% |
|---|
| Sandstorm Gold Ltd ($SSL) | 11.0% | 1.5% | 1.7% | -1.4% | 2.4% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.9x | 1.2x | 1.5x | 0.7x |
|---|
| Sandstorm Gold Ltd ($SSL) | -3.1x | -3.3x | -2.6x | 2.6x | -0.5x |
