IRC Ltd reports 47.9% CAPEX decline and 33.1% Revenue decline
31/03/2016 • About IRC Ltd (
$1029) • By InTwits
IRC Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- IRC Ltd doesn't have a profitable business model yet: 2015 ROIC is -80.6%
- The company operates at negative EBITDA Margin: -614.7%
- IRC Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -136.5%0
- IRC Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 89.8%. At the same time it's a lot of higher than industry average of 64.8%.
- CAPEX is quite volatile: 52.6 in 2015, 101 in 2014, 114 in 2013, 143 in 2012, 159 in 2011
- The company has unprofitable business model: ROIC is at -80.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
IRC Ltd ($1029) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 122.2 | 139.7 | 160.9 | 122.4 | 81.9 | -33.1% |
| Gross Profit | 17.5 | -2.2 | 4.7 | -25.5 | -14.0 | -45.3% |
| SG&A | 26.2 | 25.8 | 18.9 | 16.6 | 10.1 | -39.2% |
| EBITDA | 2.2 | -35.7 | -22.1 | -296.7 | -503.5 | 69.7% |
| Net Income | 1.0 | -57.6 | -41.6 | -317.6 | -509.0 | 60.2% |
Balance Sheet
|
|---|
| Cash | 33.2 | 15.5 | 89.6 | 45.0 | 49.2 | 9.2% |
| Short Term Debt | 15.0 | 25.3 | 41.3 | 63.5 | 53.1 | -16.5% |
| Long Term Debt | 6.3 | 108.5 | 158.7 | 205.1 | 215.2 | 5.0% |
Cash flow
|
|---|
| Capex | 158.6 | 142.6 | 113.6 | 101.0 | 52.6 | -47.9% |
Ratios
|
|---|
| Revenue growth | 373.8% | 14.3% | 15.2% | -23.9% | -33.1% | |
| EBITDA growth | -103.3% | -1,709.3% | -38.2% | 1,244.5% | 69.7% | |
| Gross Margin | 14.3% | -1.6% | 2.9% | -20.9% | -17.1% | 3.8% |
| EBITDA Margin | 1.8% | -25.6% | -13.7% | -242.3% | -614.7% | -372.4% |
| Net Income Margin | 0.8% | -41.2% | -25.9% | -259.5% | -621.4% | -361.9% |
| SG&A, % of revenue | 21.5% | 18.5% | 11.7% | 13.5% | 12.3% | -1.2% |
| CAPEX, % of revenue | 129.7% | 102.1% | 70.6% | 82.5% | 64.2% | -18.3% |
| ROIC | -1.1% | -6.3% | -4.4% | -31.6% | -80.6% | -49.0% |
| ROE | 0.1% | -7.3% | -5.1% | -44.3% | -146.1% | -101.8% |
| Net Debt/EBITDA | -5.3x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 33.1% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 372 pp from -242% to -615% in 2015.
Gross Margin increased on 3.8 pp from -20.9% to -17.1% in 2015. SG&A as a % of Revenue decreased slightly on 1.2 pp from 13.5% to 12.3% in 2015.
Net Income marign dropped on 362 pp from -259% to -621% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 64.2% in 2015. The company's CAPEX/Revenue dropped on 37.9 pp from 102% in 2012 to 64.2% in 2015. Average CAPEX/Revenue for the last three years was 72.4%.
Return on investment
The company operates at negative ROIC (-80.57%) and ROE (-146.10%). ROIC dropped on 49.0 pp from -31.6% to -80.6% in 2015. ROE dropped on 102 pp from -44.3% to -146% in 2015.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt showed almost no change in 2015 while cash increased on 9.2% in 2015.
Appendix 1: Peers in Mining
Below we provide IRC Ltd benchmarking against other companies in Mining 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mongolia Energy Corp Ltd ($276) | | | 89.7% | -95.8% | 2,361.6% |
| Real Gold Mining Ltd ($246) | | -44.0% | -68.0% | -26.2% | 106.2% |
| REX Global Entertainment Holdings Ltd ($164) | | -12.3% | 81.6% | -15.5% | 96.4% |
| Hengxing Gold Holding Co Ltd ($2303) | | | | 3,467.3% | 78.0% |
| Zijin Mining Group Co Ltd ($2899) | | 21.6% | 2.5% | 18.1% | 26.9% |
| |
|---|
| Median (48 companies) | 54.5% | 5.0% | 0.6% | -5.1% | -13.0% |
|---|
| IRC Ltd ($1029) | | 14.3% | 15.2% | -23.9% | -33.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | -6.5% | 2.5% | 5.1% | 39.6% | 93.0% |
| REX Global Entertainment Holdings Ltd ($164) | 15.4% | -15.8% | -7.8% | -0.8% | 88.6% |
| China Billion Resources Ltd ($274) | 20.3% | 71.4% | 47.2% | 73.4% | 79.7% |
| Sun International Resources Ltd ($8029) | 77.6% | 83.2% | 73.1% | 64.8% | 69.4% |
| Timeless Software Ltd ($8028) | 19.2% | 17.7% | 48.5% | 29.4% | 42.1% |
| |
|---|
| Median (49 companies) | 19.2% | 14.4% | 13.8% | 15.4% | 14.3% |
|---|
| IRC Ltd ($1029) | 14.3% | -1.6% | 2.9% | -20.9% | -17.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| G-Resources Group Ltd ($1051) | | | 54.5% | 53.4% | 58.3% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 73.1% | 70.0% | 64.6% | 59.6% | 51.3% |
| Timeless Software Ltd ($8028) | -70.8% | -113.1% | 24.7% | -13.7% | 46.1% |
| Hengxing Gold Holding Co Ltd ($2303) | | | -766.2% | 24.5% | 43.9% |
| Sino Prosper Group Holdings Ltd ($766) | -127.2% | -138.6% | -138.2% | -378.4% | 42.9% |
| |
|---|
| Median (49 companies) | 6.3% | 4.9% | 7.9% | 5.2% | 5.1% |
|---|
| IRC Ltd ($1029) | 1.8% | -25.6% | -13.7% | -242.3% | -614.7% |
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% |
| Kaz Minerals ($847) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| Chinalco Mining Corp International ($3668) | | | | | 115.6% |
| China Dynamics Holdings Ltd ($476) | 1.6% | 1.8% | 0.0% | 1.0% | 113.8% |
| MMG Ltd ($1208) | 17.1% | 25.7% | 22.6% | 41.9% | 100.4% |
| |
|---|
| Median (49 companies) | 13.1% | 16.7% | 15.7% | 13.4% | 11.0% |
|---|
| IRC Ltd ($1029) | 129.7% | 102.1% | 70.6% | 82.5% | 64.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CGN Mining Co Ltd ($1164) | -6.4% | 2.6% | 3.3% | 7.9% | 16.7% |
| United Co RUSAL PLC ($486) | 7.5% | 0.3% | -9.0% | 6.3% | 12.3% |
| Xingfa Aluminium Holdings Ltd ($98) | 3.8% | 7.6% | 8.8% | 11.7% | 11.8% |
| Timeless Software Ltd ($8028) | -18.0% | -29.1% | 7.3% | -4.6% | 11.6% |
| China Hongqiao Group Ltd ($1378) | 44.6% | 24.8% | 17.0% | 14.1% | 10.6% |
| |
|---|
| Median (50 companies) | 3.3% | 1.9% | 3.0% | 1.5% | -0.6% |
|---|
| IRC Ltd ($1029) | -1.1% | -6.3% | -4.4% | -31.6% | -80.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 5.8x | 9.2x | 9.7x | 9.2x | 31.5x |
| Chinalco Mining Corp International ($3668) | | | | | 25.0x |
| MMG Ltd ($1208) | -0.0x | 2.1x | 2.0x | 10.2x | 20.2x |
| Kaz Minerals ($847) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
| Aluminum Corp of China Ltd ($2600) | 7.7x | 139.2x | 8.5x | | 18.0x |
| |
|---|
| Median (31 companies) | 1.4x | 2.0x | 1.9x | 4.4x | 3.4x |
|---|
