Taseko Mines Ltd Net Debt / EBITDA jumped on 5.1x from 5.9x to 11.0x in 2016 while Revenue decreased on 8.8%
22.02.2017 • About Taseko Mines Ltd (
$TKO) • By InTwits
Taseko Mines Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Taseko Mines Ltd doesn't have a profitable business model yet: 2016 ROIC is -3.2%
- EBITDA Margin is quite volatile: 10.4% in 2016, 16.9% in 2015, 7.5% in 2014, 11.7% in 2013, 6.3% in 2012
- Taseko Mines Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 27.0%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 18.8 in 2016, 19.0 in 2015, 38.8 in 2014, 98.5 in 2013, 193 in 2012
- The company has unprofitable business model: ROIC is at -3.2%
- It operates with high leverage: Net Debt/EBITDA is 11.0x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Taseko Mines Ltd ($TKO) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 253.6 | 290.1 | 342.9 | 289.3 | 263.9 | -8.8% |
| Gross Profit | 81.3 | 77.0 | 5.1 | 1.3 | 1.8 | 34.5% |
| SG&A | 19.1 | 16.2 | 16.1 | 15.8 | 11.3 | -28.4% |
| EBITDA | 15.9 | 34.0 | 25.6 | 48.9 | 27.4 | -44.1% |
| Net Income | -9.1 | -34.8 | -53.9 | -62.4 | -31.4 | |
Balance Sheet
|
|---|
| Cash | 135.0 | 82.9 | 53.3 | 76.0 | 89.0 | 17.1% |
| Short Term Debt | 18.1 | 22.6 | 20.2 | 59.8 | 16.2 | -73.0% |
| Long Term Debt | 234.8 | 259.5 | 293.5 | 305.4 | 373.1 | 22.2% |
Cash flow
|
|---|
| Capex | 192.9 | 98.5 | 38.8 | 19.0 | 18.8 | -0.6% |
Ratios
|
|---|
| Revenue growth | 0.7% | 14.4% | 18.2% | -15.6% | -8.8% | |
| EBITDA growth | -76.8% | 113.5% | -24.7% | 90.8% | -44.1% | |
| Gross Margin | 32.1% | 26.5% | 1.5% | 0.5% | 0.7% | 0.2% |
| EBITDA Margin | 6.3% | 11.7% | 7.5% | 16.9% | 10.4% | -6.5% |
| Net Income Margin | -3.6% | -12.0% | -15.7% | -21.6% | -11.9% | 9.7% |
| SG&A, % of revenue | 7.5% | 5.6% | 4.7% | 5.5% | 4.3% | -1.2% |
| CAPEX, % of revenue | 76.1% | 34.0% | 11.3% | 6.6% | 7.1% | 0.6% |
| ROIC | -0.7% | -0.1% | -2.6% | -0.1% | -3.2% | -3.1% |
| ROE | -1.9% | -8.0% | -12.7% | -15.7% | -8.9% | 6.9% |
| Net Debt/EBITDA | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x | 5.1x |
Taseko Mines Ltd ($TKO) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 58 | 55 | 56 | 95 | 5.7% | -40.6% | -30.1% | 172.6% |
| EBITDA | -10 | -10 | 9 | 39 | -211.0% | -145.4% | -52.5% | |
| Net Income | -2 | -19 | -16 | 5 | | -582.5% | | |
Balance Sheet
|
|---|
| Cash | 66 | 89 | 64 | 89 | 13.1% | 19.2% | -29.6% | 17.1% |
| Short Term Debt | 18 | 18 | 17 | 16 | 55.4% | -64.5% | -69.7% | -73.0% |
| Long Term Debt | 322 | 359 | 364 | 373 | -0.8% | 27.6% | 21.5% | 22.2% |
Ratios
|
|---|
| Gross Margin | -23.7% | -31.4% | -8.0% | 39.5% | -9.3% | -46.5% | -15.5% | 70.3% |
| EBITDA Margin | -17.9% | -17.6% | 15.4% | 41.1% | -35.0% | -40.6% | -7.3% | 41.2% |
| Net Income Margin | -2.6% | -35.2% | -27.9% | 5.4% | 43.2% | -39.5% | -5.8% | 72.9% |
Revenue and profitability
The company's Revenue decreased on 8.8%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 173%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 190 pp from -116% to 74.4% in 2016.
Gross Margin showed almost no change in 2016. SG&A as a % of Revenue decreased slightly on 1.2 pp from 5.5% to 4.3% in 2016.
Net Income marign increased on 9.7 pp from -21.6% to -11.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Taseko Mines Ltd had CAPEX/Revenue of 7.1%. Taseko Mines Ltd's CAPEX/Revenue dropped on 26.8 pp from 34.0% in 2013 to 7.1% in 2016. For the last three years the average CAPEX/Revenue was 8.3%.Battling declining revenue Taseko Mines Ltd invested a large share of EBITDA (68.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-3.16%) and ROE (-8.85%). ROIC decreased on 3.1 pp from -0.082% to -3.2% in 2016. ROE increased on 6.9 pp from -15.7% to -8.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 11.0x and Debt / EBITDA is 14.2x. Net Debt / EBITDA jumped on 5.1x from 5.9x to 11.0x in 2016. Debt increased on 6.6% while cash surged on 17.1%.
Management team
The company's CEO is Russell Edward Hallbauer. Russell Edward Hallbauer is a founder and has 13 years tenure at the company. Stuart D Mcdonald is a The company's CFO. Stuart D Mcdonald has spent 5 years at the company.
Appendix 1: Peers in Basic Materials
Below you can find Taseko Mines 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% | -3.8% | 1.8% | -1.7% | 6.8% |
|---|
| Taseko Mines Ltd ($TKO) | | 14.4% | 18.2% | -15.6% | -8.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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% | 22.1% | 19.1% | 16.9% | 24.8% |
|---|
| Taseko Mines Ltd ($TKO) | 32.1% | 26.5% | 1.5% | 0.5% | 0.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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) | 18.6% | 10.8% | 10.7% | 6.7% | 24.5% |
|---|
| Taseko Mines Ltd ($TKO) | 6.3% | 11.7% | 7.5% | 16.9% | 10.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% | 18.3% |
|---|
| Taseko Mines Ltd ($TKO) | 76.1% | 34.0% | 11.3% | 6.6% | 7.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% | -3.8% | 4.8% |
|---|
| Taseko Mines Ltd ($TKO) | -0.7% | -0.1% | -2.6% | -0.1% | -3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($CAM) | 4.2x | 2.6x | 3.2x | 1.8x | 13.9x |
| 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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| Resolute Forest Products Inc ($RFP) | 1.3x | 1.1x | 3.8x | 29.6x | 4.0x |
| |
|---|
| Median (57 companies) | 0.3x | 0.7x | 1.1x | 1.5x | 0.6x |
|---|
| Taseko Mines Ltd ($TKO) | 7.4x | 5.9x | 10.2x | 5.9x | 11.0x |
