Wesdome Gold Mines Ltd reports 266% Net Income growth and 5.7 pp EBITDA Margin growth from 12.5% to 18.2%
22.02.2017 • About Wesdome Gold Mines Ltd (
$WDO) • By InTwits
Wesdome Gold Mines Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 18.2% in 2016, 12.5% in 2015, 29.2% in 2014, 13.2% in 2013, 12.5% in 2012
- Wesdome Gold Mines Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.2%. At the same time it's in pair with industry average of 24.1%.
- CAPEX is quite volatile: 28.4 in 2016, 15.8 in 2015, 16.3 in 2014, 10.9 in 2013, 11.2 in 2012
- The company has potentially unprofitable business model: ROIC is at 6.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wesdome Gold Mines Ltd ($WDO) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 92.308 | 79.726 | 82.441 | 73.465 | 84.031 | 14.4% |
| Gross Profit | 83.968 | | | | | |
| SG&A | | | | 3.793 | 5.463 | 44.0% |
| EBITDA | 11.500 | 10.502 | 24.075 | 9.171 | 15.296 | 66.8% |
| Net Income | -45.058 | -3.708 | 11.902 | -4.701 | 7.786 | |
Balance Sheet
|
|---|
| Cash | 4.633 | 5.651 | 15.408 | 15.424 | 26.760 | 73.5% |
| Short Term Debt | 0.898 | 0.526 | 1.219 | 1.528 | 8.979 | 487.6% |
| Long Term Debt | 7.271 | 7.308 | 8.763 | 9.736 | 4.223 | -56.6% |
Cash flow
|
|---|
| Capex | 11.234 | 10.875 | 16.281 | 15.774 | 28.364 | 79.8% |
Ratios
|
|---|
| Revenue growth | 15.9% | -13.6% | 3.4% | -10.9% | 14.4% | |
| EBITDA growth | 12.0% | -8.7% | 129.2% | -61.9% | 66.8% | |
| Gross Margin | 91.0% | | | | | 0.0% |
| EBITDA Margin | 12.5% | 13.2% | 29.2% | 12.5% | 18.2% | 5.7% |
| Net Income Margin | -48.8% | -4.7% | 14.4% | -6.4% | 9.3% | 15.7% |
| SG&A, % of revenue | | | | 5.2% | 6.5% | 1.3% |
| CAPEX, % of revenue | 12.2% | 13.6% | 19.7% | 21.5% | 33.8% | 12.3% |
| ROIC | 3.0% | 3.4% | 19.4% | 2.4% | 6.6% | 4.2% |
| ROE | -42.9% | -4.4% | 13.3% | -4.8% | 6.9% | 11.7% |
| Net Debt/EBITDA | 0.3x | 0.2x | -0.2x | -0.5x | -0.9x | -0.4x |
Wesdome Gold Mines Ltd ($WDO) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 18 | 30 | 22 | -8.0% | 7.2% | 65.6% | -6.2% |
| EBITDA | -3 | 2 | 12 | 4 | | 46.3% | 287.4% | -14.0% |
| Net Income | -3 | 2 | 7 | 2 | | | | 111.9% |
Balance Sheet
|
|---|
| Cash | 8 | 27 | 29 | 27 | -18.4% | 559.0% | 682.5% | 73.5% |
| Short Term Debt | 2 | 9 | 9 | 9 | 53.8% | 524.4% | 540.1% | 487.6% |
| Long Term Debt | 10 | 4 | 3 | 4 | 19.9% | -62.5% | -63.5% | -56.6% |
Ratios
|
|---|
| EBITDA Margin | -22.1% | 10.3% | 40.8% | 18.2% | -22.1% | 2.8% | 23.3% | -1.7% |
| Net Income Margin | -24.8% | 10.0% | 22.9% | 10.6% | -19.5% | 14.3% | 46.5% | 5.9% |
Revenue and profitability
Wesdome Gold Mines Ltd's Revenue jumped on 14.4%. Revenue growth showed slow down in 16Q4 - it was -6.2% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.7 pp from 12.5% to 18.2% in 2016.
SG&A as a % of Revenue increased slightly on 1.3 pp from 5.2% to 6.5% in 2016.
Net Income marign surged on 15.7 pp from -6.4% to 9.3% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 33.8%. CAPEX/Revenue surged on 20.1 pp from 13.6% in 2013 to 33.8% in 2016. It's average CAPEX/Revenue for the last three years was 25.0%.The company has spent a lot to CAPEX (185% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (6.64%) and ROE (6.86%). ROIC increased on 4.2 pp from 2.4% to 6.6% in 2016. ROE jumped on 11.7 pp from -4.8% to 6.9% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 0.4x from -0.5x to -0.9x in 2016. Debt jumped on 17.2% while cash jumped on 73.5%.
Appendix 1: Peers in Basic Materials
Below you can find Wesdome Gold 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% | -2.5% | 1.8% | -1.7% | 5.7% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | | -13.6% | 3.4% | -10.9% | 14.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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 (95 companies) | 32.1% | 22.4% | 18.6% | 16.5% | 24.8% |
|---|
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 18.6% | 10.8% | 10.3% | 6.7% | 24.5% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 12.5% | 13.2% | 29.2% | 12.5% | 18.2% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 28.1% | 27.4% | 17.5% | 16.6% | 17.5% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 12.2% | 13.6% | 19.7% | 21.5% | 33.8% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 0.1% | 1.2% | -3.8% | 4.0% |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 3.0% | 3.4% | 19.4% | 2.4% | 6.6% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.9x | 1.2x | 1.6x | 0.7x |
|---|
| Wesdome Gold Mines Ltd ($WDO) | 0.3x | 0.2x | -0.2x | -0.5x | -0.9x |
