SouthGobi Resources Ltd CAPEX jumped on 200% in 2015 while Revenue dropped on 34.6%
29/03/2016 • About SouthGobi Resources Ltd (
$1878) • By InTwits
SouthGobi Resources Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SouthGobi Resources Ltd is a company in decline: 2015 revenue growth was -34.6%, 5 years revenue CAGR was -27.5%
- The company operates at negative EBITDA Margin: -853.7%
- SouthGobi Resources Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -118.0% for the sames years0
- SouthGobi Resources Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 73.4%. At the same time it's a lot of higher than industry average of 45.6%.
- CAPEX is quite volatile: 8.4 in 2015, 2.8 in 2014, 11.8 in 2013, 97.4 in 2012, 283 in 2011
- The company has unprofitable business model: ROIC is at -55.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 7.3x while industry average is 7.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SouthGobi Resources Ltd ($1878) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 179.0 | 78.1 | 58.6 | 24.5 | 16.0 | -34.6% |
| Gross Profit | 51.7 | -49.3 | -54.0 | -57.6 | -47.7 | -17.3% |
| SG&A | 28.7 | 24.6 | 15.6 | 8.9 | 7.5 | -16.0% |
| EBITDA | -9.9 | -77.7 | -151.6 | -44.2 | -136.9 | 209.5% |
| Net Income | 57.7 | -97.5 | -237.5 | -103.7 | -186.8 | 80.1% |
Balance Sheet
|
|---|
| Cash | 123.6 | 19.7 | 21.8 | 3.8 | 0.4 | -90.1% |
| Short Term Debt | 6.3 | 6.3 | 2.3 | 2.3 | 16.7 | 624.5% |
| Long Term Debt | 139.1 | 99.7 | 94.3 | 92.9 | 92.0 | -1.0% |
Cash flow
|
|---|
| Capex | 283.0 | 97.4 | 11.8 | 2.8 | 8.4 | 200.2% |
Ratios
|
|---|
| Revenue growth | 124.4% | -56.4% | -24.9% | -58.2% | -34.6% | |
| EBITDA growth | -70.5% | 681.4% | 95.0% | -70.8% | 209.5% | |
| Gross Margin | 28.9% | -63.2% | -92.1% | -235.3% | -297.3% | -62.0% |
| EBITDA Margin | -5.6% | -99.6% | -258.5% | -180.5% | -853.7% | -673.2% |
| Net Income Margin | 32.3% | -124.9% | -405.0% | -423.3% | -1,165.1% | -741.8% |
| SG&A, % of revenue | 16.1% | 31.6% | 26.7% | 36.5% | 46.8% | 10.3% |
| CAPEX, % of revenue | 158.0% | 124.8% | 20.2% | 11.5% | 52.6% | 41.1% |
| ROIC | -4.3% | -16.2% | -34.0% | -19.4% | -55.7% | -36.3% |
| ROE | 8.3% | -14.8% | -48.5% | -31.5% | -94.6% | -63.1% |
Revenue and profitability
The company's Revenue dropped on 34.6% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 673 pp from -181% to -854% in 2015.
Gross Margin dropped on 62.0 pp from -235% to -297% in 2015. SG&A as a % of Revenue jumped on 10.3 pp from 36.5% to 46.8% in 2015.
Net Income marign dropped on 742 pp from -423% to -1,165% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 SouthGobi Resources Ltd had CAPEX/Revenue of 52.6%. SouthGobi Resources Ltd showed big decline in CAPEX/Revenue of 72.2 pp from 125% in 2012 to 52.6% in 2015. For the last three years the average CAPEX/Revenue was 28.1%.
Return on investment
The company operates at negative ROIC (-55.75%) and ROE (-94.57%). ROIC dropped on 36.3 pp from -19.4% to -55.7% in 2015. ROE dropped on 63.1 pp from -31.5% to -94.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt surged on 14.2% in 2015 while cash dropped on 90.1% in 2015.
Management team
Aminbuhe Aminbuhe is a SouthGobi Resources Ltd's CEO. Aminbuhe Aminbuhe has spent 3 years at the company. SouthGobi Resources Ltd's CFO is Yulan Guo "Allen". Yulan Guo "Allen" has 3 years tenure at the company.
Appendix 1: Peers in Coal
Below you can find SouthGobi Resources Ltd benchmarking vs. other companies in Coal 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 |
|---|
| Kinetic Mines and Energy Ltd ($1277) | | | 299.9% | 563.4% | 40.0% |
| Feishang Anthracite Resources Ltd ($1738) | | 34.9% | 25.8% | 103.6% | -34.0% |
| Loudong General Nice Resources China Holdings Ltd ($988) | 8.5% | -12.7% | 39.1% | 87.6% | |
| Rosan Resources Holdings Ltd ($578) | -19.9% | -74.1% | 71.1% | 49.1% | |
| Asia Coal Ltd ($835) | | 32.1% | -15.3% | 43.2% | 133.6% |
| |
|---|
| Median (22 companies) | 5.2% | -3.9% | -6.8% | -8.2% | -16.1% |
|---|
| SouthGobi Resources Ltd ($1878) | | | -24.9% | -58.2% | -34.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Coal Ltd ($835) | 32.4% | 56.7% | 62.6% | 76.7% | 5.8% |
| Shougang Fushan Resources Group Ltd ($639) | 70.4% | 63.5% | 50.9% | 40.1% | 24.5% |
| Agritrade Resources Ltd ($1131) | 7.6% | 22.9% | 29.4% | 31.8% | 30.0% |
| Kinetic Mines and Energy Ltd ($1277) | | 20.6% | 28.8% | 30.3% | 10.9% |
| China Shenhua Energy Co Ltd ($1088) | 39.9% | 31.4% | 28.7% | 29.6% | 35.5% |
| |
|---|
| Median (22 companies) | 30.6% | 20.3% | 17.6% | 10.5% | 6.9% |
|---|
| SouthGobi Resources Ltd ($1878) | | -63.2% | -92.1% | -235.3% | -297.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 41.2% | 35.6% | 31.6% | 34.2% | 33.9% |
| Agritrade Resources Ltd ($1131) | 1.4% | 41.6% | 37.3% | 33.4% | 31.1% |
| Kinetic Mines and Energy Ltd ($1277) | | -277.0% | -51.9% | 29.3% | 15.8% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 40.9% | 33.1% | 30.7% | 22.8% | |
| Feishang Anthracite Resources Ltd ($1738) | -9.2% | -13.1% | -32.9% | 19.0% | 15.9% |
| |
|---|
| Median (23 companies) | 13.9% | 7.2% | 0.2% | -6.5% | 11.9% |
|---|
| SouthGobi Resources Ltd ($1878) | | -99.6% | -258.5% | -180.5% | -853.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Up Energy Development Group Ltd ($307) | | | | 279.5% | 75.2% |
| Siberian Mining Group Co Ltd ($1142) | 129.1% | 4.6% | 78.8% | 217.3% | 279.7% |
| King Stone Energy Group Ltd ($663) | 82.7% | 58.5% | 135.3% | 205.7% | |
| Asia Coal Ltd ($835) | 121.4% | 12.5% | 25.8% | 111.0% | 0.3% |
| Hidili Industry International Development Ltd ($1393) | 74.1% | 82.3% | 144.6% | 92.3% | |
| |
|---|
| Median (23 companies) | 22.0% | 13.7% | 26.0% | 20.5% | 18.4% |
|---|
| SouthGobi Resources Ltd ($1878) | | 124.8% | 20.2% | 11.5% | 52.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Shenhua Energy Co Ltd ($1088) | 21.0% | 19.5% | 17.4% | 14.6% | 7.7% |
| Loudong General Nice Resources China Holdings Ltd ($988) | 11.5% | 4.1% | 8.2% | 9.6% | |
| Kinetic Mines and Energy Ltd ($1277) | -2.6% | -6.6% | -5.7% | 8.5% | 3.2% |
| Inner Mongolia Yitai Coal Co Ltd ($3948) | 37.6% | 28.5% | 15.2% | 8.5% | |
| Agritrade Resources Ltd ($1131) | -2.3% | 2.7% | 5.8% | 6.4% | 6.9% |
| |
|---|
| Median (23 companies) | 2.7% | -1.3% | -0.4% | -1.8% | -0.9% |
|---|
| SouthGobi Resources Ltd ($1878) | | -16.2% | -34.0% | -19.4% | -55.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Feishang Anthracite Resources Ltd ($1738) | | | | 24.3x | 32.6x |
| China Coal Energy Co Ltd ($1898) | 0.5x | 1.9x | 4.9x | 9.7x | 14.4x |
| Yanzhou Coal Mining Co Ltd ($1171) | 1.1x | 2.9x | 6.2x | 4.9x | 9.0x |
| Kinetic Mines and Energy Ltd ($1277) | | | | 4.5x | 5.9x |
| Capital Finance Holdings Ltd ($8239) | | | | | 3.6x |
| |
|---|
| Median (8 companies) | 1.1x | 2.4x | 4.4x | 4.5x | 4.8x |
|---|
