Kaz Minerals Net Income jumped on 1,575% and EBITDA Margin surged on 18.1 pp from 21.4% to 39.4%
23/02/2017 • About Kaz Minerals (
$847) • By InTwits
Kaz Minerals reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 39.4% in 2016, 21.4% in 2015, 29.1% in 2014, 51.5% in 2013, 15.4% in 2012
- Kaz Minerals has high CAPEX intensity: 5 year average CAPEX/Revenue was 110.5%. At the same time it's a lot of higher than industry average of 29.3%.
- CAPEX is quite volatile: 321 in 2016, 1,122 in 2015, 1,428 in 2014, 1,271 in 2013, 1,228 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 4.2x
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. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,353 | 931 | 846 | 665 | 766 | 15.2% |
| Gross Profit | 1,330 | 383 | 390 | 236 | 353 | 49.6% |
| SG&A | 869 | 175 | 164 | 153 | 132 | -13.7% |
| EBITDA | 518 | 479 | 246 | 142 | 302 | 112.7% |
| Net Income | -2,271 | -2,030 | -2,362 | -12 | 177 | |
Balance Sheet
|
|---|
| Cash | 1,246 | 1,715 | 1,730 | 851 | 1,108 | 30.2% |
| Short Term Debt | 29 | 503 | 181 | 303 | 331 | 9.2% |
| Long Term Debt | 2,439 | 2,608 | 2,911 | 3,201 | 3,446 | 7.7% |
Cash flow
|
|---|
| Capex | 1,228 | 1,271 | 1,428 | 1,122 | 321 | -71.4% |
Ratios
|
|---|
| Revenue growth | -5.9% | -72.2% | -9.1% | -21.4% | 15.2% | |
| EBITDA growth | -61.9% | -7.5% | -48.6% | -42.3% | 112.7% | |
| Gross Margin | 39.7% | 41.1% | 46.1% | 35.5% | 46.1% | 10.6% |
| EBITDA Margin | 15.4% | 51.5% | 29.1% | 21.4% | 39.4% | 18.1% |
| Net Income Margin | -67.7% | -218.0% | -279.2% | -1.8% | 23.1% | 24.9% |
| SG&A, % of revenue | 25.9% | 18.8% | 19.4% | 23.0% | 17.2% | -5.8% |
| CAPEX, % of revenue | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% | -126.8% |
| ROIC | 2.5% | 2.4% | 1.5% | 2.0% | 5.4% | 3.4% |
| ROE | -30.1% | -38.8% | -74.8% | -1.0% | 41.5% | 42.5% |
| Net Debt/EBITDA | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x | -9.8x |
Revenue and profitability
Kaz Minerals's Revenue surged on 15.2%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 18.1 pp from 21.4% to 39.4% in 2016.
Gross Margin jumped on 10.6 pp from 35.5% to 46.1% in 2016. SG&A as a % of Revenue decreased on 5.8 pp from 23.0% to 17.2% in 2016.
Net Income marign jumped on 24.9 pp from -1.8% to 23.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Kaz Minerals had CAPEX/Revenue of 41.9%. Kaz Minerals showed big decline in CAPEX/Revenue of 94.6 pp from 137% in 2013 to 41.9% in 2016. It's average CAPEX/Revenue for the last three years was 126%.To fuel this fast growth the company made large investments to CAPEX (106% of EBITDA).
Return on investment
The company operates at good ROE (41.55%) while ROIC is low (5.38%). ROIC increased on 3.4 pp from 2.0% to 5.4% in 2016. ROE surged on 42.5 pp from -0.99% to 41.5% in 2016.
Leverage (Debt)
Debt level is 8.8x Net Debt / EBITDA and 12.5x Debt / EBITDA. Net Debt / EBITDA dropped on 9.8x from 18.7x to 8.8x in 2016. Debt increased on 7.8% while cash surged on 30.2%.
Management team
Oleg Nikolaevich Novachuk is a the company's CEO. Oleg Nikolaevich Novachuk has spent 11 years 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | | 89.7% | -95.8% | 2,361.6% | 1,178.3% |
| Real Gold Mining Ltd ($246) | -44.0% | -68.0% | -26.2% | 106.2% | |
| REX Global Entertainment Holdings Ltd ($164) | | 81.6% | -15.5% | 96.4% | 30.4% |
| 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 (47 companies) | 6.7% | 0.6% | -5.1% | -14.0% | 3.8% |
|---|
| Kaz Minerals ($847) | | -72.2% | -9.1% | -21.4% | 15.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sino Prosper Group Holdings Ltd ($766) | 2.5% | 5.1% | 39.6% | 93.0% | 87.4% |
| REX Global Entertainment Holdings Ltd ($164) | -15.8% | -7.8% | -0.8% | 88.6% | 87.3% |
| China Billion Resources Ltd ($274) | 71.4% | 47.2% | 73.4% | 79.7% | |
| Sun International Resources Ltd ($8029) | 83.2% | 73.1% | 64.8% | 69.4% | 58.8% |
| Grand T G Gold Holdings Ltd ($8299) | | | | 57.3% | 59.0% |
| |
|---|
| Median (49 companies) | 14.4% | 13.8% | 15.4% | 14.3% | 28.2% |
|---|
| Kaz Minerals ($847) | 39.7% | 41.1% | 46.1% | 35.5% | 46.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| G-Resources Group Ltd ($1051) | | 54.5% | 53.4% | 58.3% | |
| Grand T G Gold Holdings Ltd ($8299) | | | | 53.7% | 58.9% |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 70.0% | 64.6% | 59.6% | 51.3% | |
| Timeless Software Ltd ($8028) | -113.1% | 24.7% | -13.7% | 46.1% | 28.0% |
| Hengxing Gold Holding Co Ltd ($2303) | | -766.2% | 24.5% | 43.9% | |
| |
|---|
| Median (49 companies) | 4.9% | 7.8% | 5.2% | 5.1% | -27.3% |
|---|
| Kaz Minerals ($847) | 15.4% | 51.5% | 29.1% | 21.4% | 39.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mongolia Energy Corp Ltd ($276) | 8,006.5% | 1,061.7% | 30,555.4% | 1,973.0% | 20.9% |
| Chinalco Mining Corp International ($3668) | | | | 115.6% | |
| China Dynamics Holdings Ltd ($476) | 1.8% | 0.0% | 1.0% | 113.8% | 5.7% |
| MMG Ltd ($1208) | 25.7% | 22.6% | 41.9% | 100.4% | |
| North Mining Shares Co Ltd ($433) | 21.7% | 13.0% | 58.9% | 96.7% | |
| |
|---|
| Median (48 companies) | 17.2% | 16.8% | 15.8% | 12.1% | 4.1% |
|---|
| Kaz Minerals ($847) | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CGN Mining Co Ltd ($1164) | 2.6% | 3.3% | 7.9% | 16.7% | |
| United Co RUSAL PLC ($486) | 0.3% | -9.0% | 6.3% | 12.3% | |
| Xingfa Aluminium Holdings Ltd ($98) | 7.6% | 8.8% | 11.7% | 11.8% | |
| Timeless Software Ltd ($8028) | -29.1% | 7.3% | -4.6% | 11.6% | 3.9% |
| China Hongqiao Group Ltd ($1378) | 24.8% | 17.0% | 14.1% | 10.6% | |
| |
|---|
| Median (50 companies) | 0.9% | 2.6% | -0.1% | -1.1% | -2.8% |
|---|
| Kaz Minerals ($847) | 2.5% | 2.4% | 1.5% | 2.0% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Daye Non-Ferrous Metals Mining Ltd ($661) | 9.2x | 9.7x | 9.2x | 31.5x | |
| Chinalco Mining Corp International ($3668) | | | | 25.0x | |
| MMG Ltd ($1208) | 2.1x | 2.0x | 10.2x | 20.2x | |
| China Precious Metal Resources Holdings Co Ltd ($1194) | 1.5x | 4.1x | 6.4x | 13.5x | |
| Lingbao Gold Co Ltd ($3330) | 5.3x | | 8.3x | 12.7x | |
| |
|---|
| Median (29 companies) | 1.7x | 1.8x | 4.4x | 3.4x | 1.3x |
|---|
| Kaz Minerals ($847) | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x |
