Kaz Minerals Net Debt / EBITDA jumped on 13.1x from 5.5x to 18.7x in 2015 while EBITDA dropped on 42.3%
25/02/2016 • About Kaz Minerals (
$847) • By InTwits
Kaz Minerals reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kaz Minerals is a company in decline: 2015 revenue growth was -21.4%, 5 years revenue CAGR was -27.1%
- EBITDA Margin is quite volatile: 21.4% in 2015, 29.1% in 2014, 51.5% in 2013, 15.4% in 2012, 38.2% in 2011
- Kaz Minerals has high CAPEX intensity: 5 year average CAPEX/Revenue was 106.1%. At the same time it's a lot of higher than industry average of 71.5%.
- CAPEX is quite volatile: 16.2 in 2015, 3.0 in 2014, 14.3 in 2013, 6.1 in 2012, 26.0 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.0%
- It operates with high leverage: Net Debt/EBITDA is 18.7x while industry average is 1.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kaz Minerals ($847) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,563 | 3,353 | 931 | 846 | 665 | -21.4% |
| Gross Profit | 1,944 | 1,330 | 383 | 390 | 236 | -39.5% |
| SG&A | 815 | 869 | 175 | 164 | 153 | -6.7% |
| EBITDA | 1,361 | 518 | 479 | 246 | 142 | -42.3% |
| Net Income | 930 | -2,271 | -2,030 | -2,362 | -12 | -99.5% |
Balance Sheet
|
|---|
| Cash | 1,102 | 1,246 | 1,715 | 1,730 | 851 | -50.8% |
| Short Term Debt | 525 | 29 | 503 | 181 | 303 | 67.4% |
| Long Term Debt | 1,368 | 2,439 | 2,608 | 2,911 | 3,201 | 10.0% |
Cash flow
|
|---|
| Capex | 707 | 1,228 | 1,271 | 1,428 | 1,122 | -21.4% |
Ratios
|
|---|
| Revenue growth | 10.1% | -5.9% | -72.2% | -9.1% | -21.4% | |
| EBITDA growth | 1.0% | -61.9% | -7.5% | -48.6% | -42.3% | |
| Gross Margin | 54.6% | 39.7% | 41.1% | 46.1% | 35.5% | -10.6% |
| EBITDA Margin | 38.2% | 15.4% | 51.5% | 29.1% | 21.4% | -7.7% |
| Net Income Margin | 26.1% | -67.7% | -218.0% | -279.2% | -1.8% | 277.4% |
| SG&A, % of revenue | 22.9% | 25.9% | 18.8% | 19.4% | 23.0% | 3.6% |
| CAPEX, % of revenue | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% | -0.1% |
| ROIC | 10.8% | 2.5% | 2.4% | 1.5% | 2.0% | 0.5% |
| ROE | 10.9% | -30.1% | -38.8% | -74.8% | -1.0% | 73.8% |
| Net Debt/EBITDA | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x | 13.1x |
Revenue and profitability
The company's Revenue dropped on 21.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.7 pp from 29.1% to 21.4% in 2015.
Gross Margin dropped on 10.6 pp from 46.1% to 35.5% in 2015. SG&A as a % of Revenue increased on 3.6 pp from 19.4% to 23.0% in 2015.
Net Income marign jumped on 277 pp from -279% to -1.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 169%. The company showed fast CAPEX/Revenue growth of 132 pp from 36.6% in 2012 to 169% in 2015. For the last three years the average CAPEX/Revenue was 158%.Battling declining revenue Kaz Minerals made large investments to CAPEX (790% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (2.01%) and negative ROE (-0.99%). ROIC increased slightly on 0.51 pp from 1.5% to 2.0% in 2015. ROE jumped on 73.8 pp from -74.8% to -0.99% in 2015.
Leverage (Debt)
Debt level is 18.7x Net Debt / EBITDA and 24.7x Debt / EBITDA. Net Debt / EBITDA surged on 13.1x from 5.5x to 18.7x in 2015. Debt surged on 13.3% in 2015 while cash dropped on 50.8% in 2015.
Management team
The company's CEO is Oleg Nikolaevich Novachuk. Oleg Nikolaevich Novachuk has 11 years tenure at the company. Andrew Southam is a The company's CFO. Andrew Southam has spent 5 years at the company.
Appendix 1: Peers in Mining
Below you can find Kaz Minerals benchmarking vs. other companies in Mining 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 24.0% | 4.8% | -44.7% | 303.0% | |
| Huili Resources Group Ltd ($1303) | -47.8% | -33.6% | -91.6% | 219.4% | |
| North Mining Shares Co Ltd ($433) | 1.7% | -5.5% | -57.1% | 187.0% | |
| China Kingstone Mining Holdings Ltd ($1380) | 4,275.3% | -94.5% | -55.6% | 155.2% | |
| Ding He Mining Holdings Ltd ($705) | 31.6% | 29.9% | 43.8% | 89.8% | |
| |
|---|
| Median (47 companies) | 30.5% | 5.4% | 2.4% | -5.3% | -3.3% |
|---|
| Kaz Minerals ($847) | | -5.9% | -72.2% | -9.1% | -21.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| China Polymetallic Mining Ltd ($2133) | 76.9% | 81.8% | 74.2% | 51.8% | 38.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 64.7% | 63.9% | 54.9% | 51.2% | |
| Hengshi Mining Investments Ltd ($1370) | 54.6% | 32.4% | 55.3% | 50.1% | |
| |
|---|
| Median (47 companies) | 19.1% | 13.4% | 14.0% | 15.3% | 34.1% |
|---|
| Kaz Minerals ($847) | 54.6% | 39.7% | 41.1% | 46.1% | 35.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | |
| China Polymetallic Mining Ltd ($2133) | -322.0% | 62.8% | 58.5% | 54.1% | 2.8% |
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | |
| China Gold International Resources Corp Ltd ($2099) | | 41.7% | 38.3% | 47.3% | 33.7% |
| Hengshi Mining Investments Ltd ($1370) | 45.7% | 22.8% | 52.0% | 45.4% | |
| |
|---|
| Median (47 companies) | 5.9% | 4.7% | 7.5% | 4.4% | -1.3% |
|---|
| Kaz Minerals ($847) | 38.2% | 15.4% | 51.5% | 29.1% | 21.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% |
| Huili Resources Group Ltd ($1303) | 3.9% | 181.0% | 1,508.6% | 279.5% | |
| China Gold International Resources Corp Ltd ($2099) | | 64.7% | 156.1% | 95.6% | 81.4% |
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 58.1% | 67.1% | 81.5% | 82.3% | |
| |
|---|
| Median (47 companies) | 14.3% | 17.0% | 15.3% | 11.1% | 9.6% |
|---|
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Silver Group Ltd ($815) | 48.0% | 57.6% | 31.6% | 35.8% | |
| Hengshi Mining Investments Ltd ($1370) | 153.0% | 50.1% | 60.1% | 20.7% | |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | |
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| |
|---|
| Median (48 companies) | 2.9% | 1.5% | 3.1% | 0.9% | -1.1% |
|---|
| Kaz Minerals ($847) | 10.8% | 2.5% | 2.4% | 1.5% | 2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Xinjiang Xinxin Mining Industry Co Ltd ($3833) | 0.9x | 8.4x | 39.4x | 10.3x | |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | |
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | |
| Midas Holdings Ltd ($1021) | 1.4x | 4.3x | 6.5x | 8.7x | |
| Lingbao Gold Co Ltd ($3330) | 3.5x | 5.3x | | 8.3x | |
| |
|---|
| Median (26 companies) | 1.4x | 1.5x | 1.9x | 3.8x | -0.7x |
|---|
| Kaz Minerals ($847) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
