North American Palladium Ltd CAPEX jumped on 23.3% in 2016 while Revenue dropped on 13.8%
22.02.2017 • About North American Palladium Ltd (
$PDL) • By InTwits
North American Palladium Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- North American Palladium Ltd doesn't have a profitable business model yet: 2016 ROIC is -6.1%
- North American Palladium Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 42.6%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 39.7 in 2016, 32.2 in 2015, 23.8 in 2014, 109 in 2013, 145 in 2012
- The company has unprofitable business model: ROIC is at -6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
North American Palladium Ltd ($PDL) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 160.7 | 153.2 | 220.1 | 193.6 | 166.9 | -13.8% |
| Gross Profit | 46.2 | 31.8 | 70.4 | 29.7 | 19.1 | -35.7% |
| SG&A | 12.0 | 10.7 | 9.6 | 11.5 | 5.8 | -49.6% |
| EBITDA | 8.9 | 0.5 | 41.7 | -3.7 | 0.0 | |
| Net Income | -66.0 | -46.2 | -66.7 | -216.4 | -37.5 | |
Balance Sheet
|
|---|
| Cash | 20.2 | 9.8 | 4.1 | 11.2 | 15.0 | 33.9% |
| Short Term Debt | 18.8 | 194.5 | 48.7 | 37.3 | 57.1 | 53.1% |
| Long Term Debt | 111.6 | 44.6 | 233.0 | 9.8 | 51.7 | 427.6% |
Cash flow
|
|---|
| Capex | 145.2 | 109.5 | 23.8 | 32.2 | 39.7 | 23.3% |
Ratios
|
|---|
| Revenue growth | 11.9% | -4.6% | 43.6% | -12.0% | -13.8% | |
| EBITDA growth | -45.9% | -94.7% | 8,829.3% | -108.9% | -100.0% | |
| Gross Margin | 28.8% | 20.7% | 32.0% | 15.3% | 11.4% | -3.9% |
| EBITDA Margin | 5.5% | 0.3% | 18.9% | -1.9% | 0.0% | 1.9% |
| Net Income Margin | -41.1% | -30.1% | -30.3% | -111.8% | -22.5% | 89.3% |
| SG&A, % of revenue | 7.5% | 7.0% | 4.4% | 5.9% | 3.5% | -2.5% |
| CAPEX, % of revenue | 90.3% | 71.5% | 10.8% | 16.6% | 23.8% | 7.2% |
| ROIC | -3.0% | -6.0% | 0.8% | -6.9% | -6.1% | 0.9% |
| ROE | -25.6% | -19.7% | -29.9% | -64.3% | -8.7% | 55.6% |
| Net Debt/EBITDA | 12.4x | 491.0x | 6.7x | | | 0.0x |
North American Palladium Ltd ($PDL) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 33 | 40 | 49 | 46 | -49.2% | 46.2% | -25.0% | 22.3% |
| EBITDA | -7 | -0 | 9 | -2 | -200.0% | | 435.3% | |
| Net Income | -13 | -10 | -2 | -13 | | | | |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 9 | 15 | -64.4% | -82.1% | -44.1% | 33.9% |
| Short Term Debt | 35 | 33 | 39 | 57 | -86.4% | -90.6% | 16.3% | 53.1% |
| Long Term Debt | 19 | 38 | 52 | 52 | -62.6% | -24.2% | 392.5% | 427.6% |
Ratios
|
|---|
| Gross Margin | -6.5% | 11.3% | 29.1% | 5.7% | -31.0% | 14.9% | 9.0% | 0.3% |
| EBITDA Margin | -22.8% | -0.5% | 18.8% | -3.3% | -34.3% | 34.3% | 16.1% | 5.5% |
| Net Income Margin | -40.3% | -24.8% | -3.3% | -28.0% | 18.0% | 329.8% | 102.6% | 8.7% |
Revenue and profitability
North American Palladium Ltd's Revenue dropped on 13.8%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 22.3%.
Gross Margin decreased on 3.9 pp from 15.3% to 11.4% in 2016. SG&A as a % of Revenue decreased on 2.5 pp from 5.9% to 3.5% in 2016.
Net Income marign surged on 89.3 pp from -112% to -22.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
North American Palladium Ltd's CAPEX/Revenue was 23.8% in 2016. North American Palladium Ltd showed big decline in CAPEX/Revenue of 47.7 pp from 71.5% in 2013 to 23.8% in 2016. It's average level of CAPEX/Revenue for the last three years was 17.1%.
Return on investment
The company operates at negative ROIC (-6.06%) and ROE (-8.72%). ROIC increased slightly on 0.86 pp from -6.9% to -6.1% in 2016. ROE jumped on 55.6 pp from -64.3% to -8.7% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2016. Debt jumped on 131% while cash surged on 33.9%.
Management team
The company's CEO is James E Gallagher. James E Gallagher is a founder and has 3 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find North American Palladium 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% | -1.7% | 6.8% |
|---|
| North American Palladium Ltd ($PDL) | | -4.6% | 43.6% | -12.0% | -13.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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% | 18.2% | 16.9% | 24.8% |
|---|
| North American Palladium Ltd ($PDL) | 28.8% | 20.7% | 32.0% | 15.3% | 11.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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) | 18.6% | 11.5% | 10.3% | 7.3% | 24.5% |
|---|
| North American Palladium Ltd ($PDL) | 5.5% | 0.3% | 18.9% | -1.9% | 0.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% | 17.8% | 17.2% | 17.5% |
|---|
| North American Palladium Ltd ($PDL) | 90.3% | 71.5% | 10.8% | 16.6% | 23.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% | 4.8% |
|---|
| North American Palladium Ltd ($PDL) | -3.0% | -6.0% | 0.8% | -6.9% | -6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 | 0.7x | 1.1x | 1.6x | 0.6x |
|---|
