Endeavour Mining Corp CAPEX jumped on 150% in 2016 and Revenue surged on 28.9%
07.03.2017 • About Endeavour Mining Corp (
$EDV) • By InTwits
Endeavour Mining Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Endeavour Mining Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -9.6% for the sames years0
- Endeavour Mining Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 30.7%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 231 in 2016, 92.6 in 2015, 117 in 2014, 214 in 2013, 122 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Endeavour Mining Corp ($EDV) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 365.3 | 443.3 | 583.6 | 522.7 | 673.5 | 28.9% |
| Gross Profit | 94.9 | 11.1 | 75.9 | 98.7 | 168.1 | 70.3% |
| SG&A | 21.7 | 21.5 | 21.7 | 22.1 | 25.2 | 14.0% |
| EBITDA | 130.8 | -431.0 | -223.2 | 138.6 | 136.8 | -1.3% |
| Net Income | -15.5 | -332.5 | -273.7 | 18.2 | -66.7 | -466.1% |
Balance Sheet
|
|---|
| Cash | 105.9 | 73.3 | 62.2 | 109.5 | 124.3 | 13.5% |
| Short Term Debt | 1.8 | 1.1 | 4.3 | 4.4 | 4.3 | -1.8% |
| Long Term Debt | 201.8 | 286.9 | 302.9 | 234.6 | 146.7 | -37.5% |
Cash flow
|
|---|
| Capex | 121.7 | 213.6 | 117.1 | 92.6 | 231.4 | 149.8% |
Ratios
|
|---|
| Revenue growth | 148.1% | 21.4% | 31.6% | -10.4% | 28.9% | |
| EBITDA growth | 198.8% | -429.6% | -48.2% | -162.1% | -1.3% | |
| Gross Margin | 26.0% | 2.5% | 13.0% | 18.9% | 25.0% | 6.1% |
| EBITDA Margin | 35.8% | -97.2% | -38.2% | 26.5% | 20.3% | -6.2% |
| Net Income Margin | -4.2% | -75.0% | -46.9% | 3.5% | -9.9% | -13.4% |
| SG&A, % of revenue | 5.9% | 4.8% | 3.7% | 4.2% | 3.7% | -0.5% |
| CAPEX, % of revenue | 33.3% | 48.2% | 20.1% | 17.7% | 34.4% | 16.6% |
| ROIC | 4.8% | -39.8% | -34.3% | 7.2% | 3.3% | -3.9% |
| ROE | -1.8% | -36.9% | -45.6% | 3.5% | -9.1% | -12.6% |
| Net Debt/EBITDA | 0.7x | | | 0.9x | 0.2x | -0.7x |
Endeavour Mining Corp ($EDV) key quoterly financial indicators
| mln. | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 144 | 160 | 169 | 200 | 10.4% | 20.8% | 39.0% | 45.2% |
| EBITDA | 45 | 39 | 55 | -3 | 12.6% | -18.9% | 55.6% | -119.1% |
| Net Income | 1 | -21 | 15 | -61 | -89.4% | -179.2% | 324.1% | |
Balance Sheet
|
|---|
| Cash | 117 | 134 | 137 | 124 | 107.4% | 154.2% | 331.2% | 13.5% |
| Short Term Debt | 4 | 4 | 4 | 4 | 0.0% | 0.0% | 0.0% | -1.8% |
| Long Term Debt | 235 | 200 | 135 | 147 | -20.6% | -27.5% | -47.2% | -37.5% |
Ratios
|
|---|
| Gross Margin | 18.9% | 27.4% | 30.5% | 22.7% | -1.4% | 0.2% | 13.7% | 11.3% |
| EBITDA Margin | 31.3% | 24.4% | 32.7% | -1.4% | 0.6% | -12.0% | 3.5% | -12.1% |
| Net Income Margin | 0.7% | -13.2% | 8.8% | -30.7% | -6.3% | -33.3% | 5.9% | -15.5% |
Revenue and profitability
Endeavour Mining Corp's Revenue jumped on 28.9%. Revenue growth showed acceleration in 16Q4 - it increased 45.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 59.9 pp from -28.4% to 31.5% in 2016.
Gross Margin increased on 6.1 pp from 18.9% to 25.0% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign dropped on 13.4 pp from 3.5% to -9.9% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Endeavour Mining Corp had CAPEX/Revenue of 34.4%. The company showed big decline in CAPEX/Revenue of 13.8 pp from 48.2% in 2013 to 34.4% in 2016. It's average CAPEX/Revenue for the last three years was 24.1%.The company has spent a lot to CAPEX (169% of EBITDA) to secure its growth.
Return on investment
The company operates at low but positive ROIC (3.31%) and negative ROE (-9.06%). ROIC decreased on 3.9 pp from 7.2% to 3.3% in 2016. ROE dropped on 12.6 pp from 3.5% to -9.1% in 2016.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 0.9x to 0.2x in 2016. Debt dropped on 36.8% while cash surged on 13.5%.
Management team
Sebastien De Montessus is a Endeavour Mining Corp's CEO. Sebastien De Montessus is a founder and has spent 2 years at the company. The company's CFO is Vincent Benoit. Vincent Benoit has 2 years tenure at the company.
Appendix 1: Peers in Basic Materials
Below we provide Endeavour Mining Corp benchmarking against other companies in Basic Materials industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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% | 5.7% |
|---|
| Endeavour Mining Corp ($EDV) | | 21.4% | 31.6% | -10.4% | 28.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nevsun Resources Ltd ($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% | 19.1% | 16.4% | 24.7% |
|---|
| Endeavour Mining Corp ($EDV) | 26.0% | 2.5% | 13.0% | 18.9% | 25.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Labrador Iron Ore Royalty Corp ($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% | 10.7% | 6.7% | 24.5% |
|---|
| Endeavour Mining Corp ($EDV) | 35.8% | -97.2% | -38.2% | 26.5% | 20.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Largo Resources Ltd ($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% |
|---|
| Endeavour Mining Corp ($EDV) | 33.3% | 48.2% | 20.1% | 17.7% | 34.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lucara Diamond Corp ($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% |
|---|
| Endeavour Mining Corp ($EDV) | 4.8% | -39.8% | -34.3% | 7.2% | 3.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canam Group Inc ($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 | 1.1x | 1.6x | 0.7x |
|---|
| Endeavour Mining Corp ($EDV) | 0.7x | | | 0.9x | 0.2x |
