China Nonferrous Mining Corp Ltd reports 291% Net Income decline and 2.4 pp EBITDA Margin decline from 18.5% to 16.1%
28/03/2016 • About China Nonferrous Mining Corp Ltd (
$1258) • By InTwits
China Nonferrous Mining Corp Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Nonferrous Mining Corp Ltd is a company in decline: 2015 revenue growth was -38.8%, 5 years revenue CAGR was -2.6%
- China Nonferrous Mining Corp Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.8%. At the same time it's a lot of higher than industry average of 33.2%.
- CAPEX is quite volatile: 142 in 2015, 191 in 2014, 267 in 2013, 207 in 2012, 428 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Nonferrous Mining Corp Ltd ($1258) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,284 | 1,532 | 1,744 | 1,942 | 1,189 | -38.8% |
| Gross Profit | 188 | 283 | 274 | 303 | 126 | -58.5% |
| SG&A | 65 | 81 | 94 | 69 | 65 | -5.8% |
| EBITDA | 186 | 279 | 278 | 359 | 191 | -46.6% |
| Net Income | 70 | 99 | 67 | 147 | -280 | -290.6% |
Balance Sheet
|
|---|
| Cash | 217 | 265 | 415 | 503 | 630 | 25.3% |
| Short Term Debt | 199 | 11 | 61 | 331 | 363 | 9.4% |
| Long Term Debt | 512 | 578 | 818 | 675 | 692 | 2.5% |
Cash flow
|
|---|
| Capex | 428 | 207 | 267 | 191 | 142 | -25.6% |
Ratios
|
|---|
| Revenue growth | -5.4% | 19.3% | 13.8% | 11.4% | -38.8% | |
| EBITDA growth | -12.8% | 49.6% | -0.3% | 29.1% | -46.6% | |
| Gross Margin | 14.7% | 18.5% | 15.7% | 15.6% | 10.6% | -5.0% |
| EBITDA Margin | 14.5% | 18.2% | 15.9% | 18.5% | 16.1% | -2.4% |
| Net Income Margin | 5.5% | 6.4% | 3.9% | 7.6% | -23.5% | -31.1% |
| SG&A, % of revenue | 5.1% | 5.3% | 5.4% | 3.5% | 5.4% | 1.9% |
| CAPEX, % of revenue | 33.3% | 13.5% | 15.3% | 9.8% | 11.9% | 2.1% |
| ROIC | 10.9% | 14.7% | 10.8% | 11.8% | 3.5% | -8.3% |
| ROE | 20.3% | 18.1% | 9.0% | 17.2% | -36.0% | -53.2% |
| Net Debt/EBITDA | 2.7x | 1.2x | 1.7x | 1.4x | 2.2x | 0.8x |
Revenue and profitability
China Nonferrous Mining Corp Ltd's Revenue dropped on 38.8% in 2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 18.5% to 16.1% in 2015.
Gross Margin decreased on 5.0 pp from 15.6% to 10.6% in 2015. SG&A as a % of Revenue increased slightly on 1.9 pp from 3.5% to 5.4% in 2015.
Net Income marign dropped on 31.1 pp from 7.6% to -23.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 11.9%. China Nonferrous Mining Corp Ltd's CAPEX/Revenue decreased slightly on 1.6 pp from 13.5% in 2012 to 11.9% in 2015. For the last three years the average CAPEX/Revenue was 12.4%.The company invested a big chunk of EBITDA (74.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low but positive ROIC (3.52%) and negative ROE (-35.99%). ROIC decreased on 8.3 pp from 11.8% to 3.5% in 2015. ROE dropped on 53.2 pp from 17.2% to -36.0% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 5.5x. Net Debt / EBITDA jumped on 0.8x from 1.4x to 2.2x in 2015. Debt increased on 4.8% in 2015 while cash surged on 25.3% in 2015.
Appendix 1: Peers in Mining
Below you can find China Nonferrous Mining Corp Ltd 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 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| 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) | | -5.5% | -57.1% | 187.0% | -45.9% |
| China Kingstone Mining Holdings Ltd ($1380) | 4,275.3% | -94.5% | -55.6% | 155.2% | |
| |
|---|
| Median (48 companies) | 43.7% | 5.0% | 0.6% | -5.9% | -7.4% |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | | 19.3% | 13.8% | 11.4% | -38.8% |
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 (48 companies) | 19.2% | 13.4% | 13.8% | 15.4% | 23.6% |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | 14.7% | 18.5% | 15.7% | 15.6% | 10.6% |
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% | 58.3% |
| 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 (48 companies) | 5.9% | 4.7% | 7.5% | 4.7% | 14.3% |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | 14.5% | 18.2% | 15.9% | 18.5% | 16.1% |
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% | |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| 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% | |
| |
|---|
| Median (48 companies) | 14.3% | 17.4% | 16.8% | 15.8% | 11.9% |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | 33.3% | 13.5% | 15.3% | 9.8% | 11.9% |
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% | 10.6% |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | |
| CGN Mining Co Ltd ($1164) | -6.4% | 2.6% | 3.3% | 7.9% | |
| |
|---|
| Median (49 companies) | 2.9% | 0.9% | 2.7% | 0.0% | 1.5% |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | 10.9% | 14.7% | 10.8% | 11.8% | 3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hengxing Gold Holding Co Ltd ($2303) | | | | 10.5x | 2.2x |
| 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 | 20.2x |
| 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 | 8.0x |
| |
|---|
| Median (27 companies) | 0.9x | 2.1x | 2.0x | 4.6x | 3.9x |
|---|
| China Nonferrous Mining Corp Ltd ($1258) | 2.7x | 1.2x | 1.7x | 1.4x | 2.2x |
