CanAf Group Inc reports 88.9% EBITDA decline and 5.8 pp EBITDA Margin decline from 7.4% to 1.6%
27.02.2017 • About CanAf Group Inc (
$CAF) • By InTwits
CanAf Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CanAf Group Inc is a company in decline: FY2016 revenue growth was -48.6%, 5 years revenue CAGR was -18.8%
- EBITDA Margin is quite volatile: 1.6% in FY2016, 7.4% in FY2015, 6.8% in FY2014, 8.1% in FY2013, 6.9% in FY2012
- CanAf Group Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.3%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: 0.20 in FY2016, 1.4 in FY2015, 0.12 in FY2014, 0.24 in FY2013, 0.44 in FY2012
- The company has unprofitable business model: ROIC is at -10.9%
- It operates with high leverage: Net Debt/EBITDA is 4.3x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CanAf Group Inc ($CAF) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10.882 | 14.970 | 13.257 | 9.157 | 4.704 | -48.6% |
| Gross Profit | 1.102 | 1.642 | 1.272 | 0.791 | 0.103 | -87.0% |
| SG&A | | | | 0.459 | 0.373 | -18.7% |
| EBITDA | 0.755 | 1.206 | 0.899 | 0.677 | 0.075 | -88.9% |
| Net Income | 0.328 | 0.839 | 0.412 | 0.128 | -0.179 | -239.5% |
Balance Sheet
|
|---|
| Cash | 1.429 | 1.314 | 0.454 | 0.881 | 0.381 | -56.8% |
| Short Term Debt | 0.039 | 0.177 | 0.000 | 0.341 | 0.298 | -12.6% |
| Long Term Debt | 0.032 | 0.000 | 0.000 | 0.609 | 0.404 | -33.6% |
Cash flow
|
|---|
| Capex | 0.443 | 0.235 | 0.119 | 1.449 | 0.204 | -85.9% |
Ratios
|
|---|
| Revenue growth | -18.4% | 37.6% | -11.4% | -30.9% | -48.6% | |
| EBITDA growth | -49.0% | 59.7% | -25.4% | -24.8% | -88.9% | |
| Gross Margin | 10.1% | 11.0% | 9.6% | 8.6% | 2.2% | -6.4% |
| EBITDA Margin | 6.9% | 8.1% | 6.8% | 7.4% | 1.6% | -5.8% |
| Net Income Margin | 3.0% | 5.6% | 3.1% | 1.4% | -3.8% | -5.2% |
| SG&A, % of revenue | | | | 5.0% | 7.9% | 2.9% |
| CAPEX, % of revenue | 4.1% | 1.6% | 0.9% | 15.8% | 4.3% | -11.5% |
| ROIC | 37.0% | 65.2% | 37.6% | 13.8% | -10.9% | -24.7% |
| ROE | 30.0% | 58.4% | 22.7% | 7.2% | -11.6% | -18.8% |
| Net Debt/EBITDA | -1.8x | -0.9x | -0.5x | 0.1x | 4.3x | 4.2x |
CanAf Group Inc ($CAF) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 1 | 1 | 2 | -61.8% | -77.8% | -45.7% | 80.7% |
| EBITDA | -0 | 0 | 0 | 0 | -188.1% | -90.5% | -10.4% | |
| Net Income | -0 | -0 | 0 | 0 | -732.6% | -120.0% | | |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 1 | 0 | -23.5% | -47.4% | -22.0% | -56.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 13.3% | -85.9% | -92.4% | -12.6% |
| Long Term Debt | 1 | 1 | 1 | 0 | | | | -33.6% |
Ratios
|
|---|
| Gross Margin | -12.6% | 5.2% | 8.8% | 5.2% | -21.3% | -7.8% | 2.6% | 6.3% |
| EBITDA Margin | -13.6% | 5.2% | 8.9% | 4.2% | -19.4% | -6.9% | 3.5% | 4.7% |
| Net Income Margin | -28.8% | -5.5% | 1.8% | 7.6% | -30.5% | -11.5% | 4.0% | 15.6% |
Revenue and profitability
CanAf Group Inc's Revenue dropped on 48.6%. Annual revenue decline showed slowdown in FY16Q4 - revenue surged on 80.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 15.0 pp from -39.9% to -24.9% in FY2016.
Gross Margin decreased on 6.4 pp from 8.6% to 2.2% in FY2016. SG&A as a % of Revenue increased on 2.9 pp from 5.0% to 7.9% in FY2016.
Net Income marign decreased on 5.2 pp from 1.4% to -3.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.3% in FY2016. CAPEX/Revenue increased on 2.8 pp from 1.6% in FY2013 to 4.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 7.0%.CanAf Group Inc has spent a lot to CAPEX (271% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-10.92%) and ROE (-11.56%). ROIC dropped on 24.7 pp from 13.8% to -10.9% in FY2016. ROE dropped on 18.8 pp from 7.2% to -11.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.3x and Debt / EBITDA is 9.3x. Net Debt / EBITDA surged on 4.2x from 0.1x to 4.3x in FY2016. Debt dropped on 26.1% while cash dropped on 56.8%.
Appendix 1: Peers in Basic Materials
Below you can find CanAf Group Inc 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 ($OR) | | | | 164.4% | 38.0% |
| |
|---|
| Median (83 companies) | 100.8% | -2.9% | 1.9% | -1.8% | 6.2% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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 ($SSL) | 74.3% | 49.9% | 62.1% | 56.5% | 64.6% |
| |
|---|
| Median (101 companies) | 18.6% | 11.3% | 10.6% | 7.0% | 23.5% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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 (101 companies) | 27.8% | 26.9% | 17.5% | 16.7% | 17.9% |
|---|
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 ($CFX) | 4.9% | 13.2% | 21.3% | 24.1% | 17.0% |
| |
|---|
| Median (100 companies) | 4.9% | 0.7% | 1.6% | -3.6% | 4.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 (58 companies) | 0.3x | 0.8x | 1.1x | 1.6x | 0.6x |
|---|
