Eldorado Gold Corp EBITDA Margin jumped on 394 pp from -361% to 33.4% in 2016 while Revenue decreased on 9.7%
23.02.2017 • About Eldorado Gold Corp (
$ELD) • By InTwits
Eldorado Gold Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eldorado Gold Corp is a company in decline: 2016 revenue growth was -9.7%, 5 years revenue CAGR was -17.1%
- Eldorado Gold Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -20.6% for the sames years0
- Eldorado Gold Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 51.9%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 108 in 2016, 125 in 2015, 296 in 2014, 219 in 2013, 268 in 2012
- The company has potentially unprofitable business model: ROIC is at 1.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Eldorado Gold Corp ($ELD) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,148 | 1,124 | 1,068 | 479 | 433 | -9.7% |
| Gross Profit | 720 | 493 | 369 | 126 | 163 | 29.9% |
| SG&A | 70 | 68 | 68 | 44 | 38 | -14.1% |
| EBITDA | 568 | -298 | 438 | -1,728 | 145 | |
| Net Income | 305 | -653 | 103 | -1,541 | -344 | |
Balance Sheet
|
|---|
| Cash | 817 | 589 | 499 | 288 | 883 | 206.5% |
| Short Term Debt | 10 | 16 | 16 | 0 | 0 | |
| Long Term Debt | 583 | 585 | 587 | 589 | 592 | 0.4% |
Cash flow
|
|---|
| Capex | 426 | 482 | 411 | 347 | 298 | -14.2% |
Ratios
|
|---|
| Revenue growth | 4.0% | -2.1% | -5.0% | -55.1% | -9.7% | |
| EBITDA growth | -11.3% | -152.5% | -247.1% | -494.1% | -108.4% | |
| Gross Margin | 62.7% | 43.9% | 34.5% | 26.2% | 37.7% | 11.5% |
| EBITDA Margin | 49.5% | -26.5% | 41.0% | -360.6% | 33.4% | 394.0% |
| Net Income Margin | 26.6% | -58.1% | 9.6% | -321.6% | -79.5% | 242.1% |
| SG&A, % of revenue | 6.1% | 6.1% | 6.4% | 9.2% | 8.7% | -0.5% |
| CAPEX, % of revenue | 37.1% | 42.9% | 38.5% | 72.4% | 68.8% | -3.7% |
| ROIC | 8.0% | -6.1% | 3.7% | -29.8% | 1.4% | 31.3% |
| ROE | 6.6% | -11.7% | 2.0% | -34.1% | -9.5% | 24.6% |
| Net Debt/EBITDA | -0.4x | | 0.2x | | -2.0x | -2.0x |
Eldorado Gold Corp ($ELD) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 164 | 107 | 116 | 45 | -31.1% | -14.0% | 3.4% | 1,081.3% |
| EBITDA | 42 | 36 | 50 | 17 | -50.6% | | 183.4% | |
| Net Income | -2 | -330 | 21 | -33 | | | | |
Balance Sheet
|
|---|
| Cash | 231 | 126 | 364 | 883 | -48.2% | -71.8% | -5.2% | 206.5% |
| Short Term Debt | 0 | 30 | 10 | 0 | -100.0% | 266.8% | | |
| Long Term Debt | 590 | 590 | 591 | 592 | 0.4% | 0.4% | 0.4% | 0.4% |
Ratios
|
|---|
| Gross Margin | 23.3% | 38.9% | 42.3% | 75.6% | -5.0% | 9.8% | 15.6% | 282.4% |
| EBITDA Margin | 25.9% | 33.5% | 42.7% | 36.7% | -10.2% | 205.2% | 27.1% | 36.7% |
| Net Income Margin | -1.5% | -308.1% | 17.8% | -71.9% | 1.9% | -148.7% | 103.4% | 32,208.7% |
Revenue and profitability
Eldorado Gold Corp's Revenue decreased on 9.7%. Annual revenue decline showed slowdown in 16Q4 - revenue jumped on 1,081%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 394 pp from -361% to 33.4% in 2016.
Gross Margin surged on 11.5 pp from 26.2% to 37.7% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign surged on 242 pp from -322% to -79.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 68.8% in 2016. The company's CAPEX/Revenue jumped on 25.9 pp from 42.9% in 2013 to 68.8% in 2016. Average CAPEX/Revenue for the last three years was 59.9%.Eldorado Gold Corp has spent a lot to CAPEX (206% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (1.43%) and negative ROE (-9.51%). ROIC jumped on 31.3 pp from -29.8% to 1.4% in 2016. ROE surged on 24.6 pp from -34.1% to -9.5% in 2016.
Leverage (Debt)
Debt level is -2.0x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA dropped2.0x from to -2.0x in 2016. Debt showed almost no change in 2016 while cash jumped on 206%.
Management team
Eldorado Gold Corp's CEO is Paul N Wright. Paul N Wright is a founder and has 19 years tenure at the company. The company's CFO is Fabiana Chubbs. Fabiana Chubbs has 7 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below you can find Eldorado Gold Corp 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (82 companies) | 100.8% | -3.8% | 2.0% | -1.7% | 6.8% |
|---|
| Eldorado Gold Corp ($ELD) | | -2.1% | -5.0% | -55.1% | -9.7% |
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 ($PRU) | 52.5% | 50.9% | 32.0% | 53.7% | 26.3% |
| |
|---|
| Median (94 companies) | 32.1% | 22.1% | 18.2% | 16.4% | 24.7% |
|---|
| Eldorado Gold Corp ($ELD) | 62.7% | 43.9% | 34.5% | 26.2% | 37.7% |
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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (100 companies) | 17.4% | 11.5% | 10.3% | 7.3% | 23.0% |
|---|
| Eldorado Gold Corp ($ELD) | 49.5% | -26.5% | 41.0% | -360.6% | 33.4% |
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 ($ASM) | 211.7% | 5.6% | 89.8% | 163.3% | |
| |
|---|
| Median (100 companies) | 27.4% | 26.5% | 17.5% | 16.6% | 17.5% |
|---|
| Eldorado Gold Corp ($ELD) | 37.1% | 42.9% | 38.5% | 72.4% | 68.8% |
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (99 companies) | 4.9% | 1.3% | 1.2% | -3.6% | 4.8% |
|---|
| Eldorado Gold Corp ($ELD) | 8.0% | -6.1% | 3.7% | -29.8% | 1.4% |
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 ($CCO) | 2.0x | 2.1x | 2.5x | 1.9x | 5.1x |
| |
|---|
| Median (57 companies) | 0.3x | 0.8x | 1.2x | 1.6x | 0.7x |
|---|
| Eldorado Gold Corp ($ELD) | -0.4x | | 0.2x | | -2.0x |
