Randgold Resources reports 20.9% EBITDA decline and 7.9% Revenue decline
08 Feb 2016 • About Randgold Resources (
$RRS) • By InTwits
Randgold Resources reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 33.8% in 2015 vs. 39.4% in 2014 vs. 51.6% in 2011
- Randgold Resources has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.7%. At the same time it's in pair with industry average of 25.7%.
- CAPEX is quite volatile: 216 in 2015, 179 in 2014, 303 in 2013, 272 in 2012, 461 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.5%
- It operates with high leverage: Net Debt/EBITDA is -0.6x while industry average is -63.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Randgold Resources ($RRS) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,127 | 1,183 | 1,138 | 1,087 | 1,001 | -7.9% |
| Gross Profit | 607 | 595 | 457 | 374 | 275 | -26.6% |
| EBITDA | 582 | 624 | 485 | 428 | 339 | -20.9% |
| Net Income | 384 | 432 | 278 | 235 | 189 | -19.7% |
Balance Sheet
|
|---|
| Cash | 488 | 374 | 38 | 83 | 213 | 157.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 3 | 3 | 3 | 3 | 3 | -0.0% |
Cash flow
|
|---|
| Capex | 461 | 272 | 303 | 179 | 216 | 20.5% |
Ratios
|
|---|
| Revenue growth | 132.6% | 5.0% | -3.8% | -4.5% | -7.9% | |
| EBITDA growth | 254.2% | 7.2% | -22.2% | -11.8% | -20.9% | |
| Gross Margin | 53.8% | 50.3% | 40.1% | 34.4% | 27.4% | -7.0% |
| EBITDA Margin | 51.6% | 52.7% | 42.7% | 39.4% | 33.8% | -5.6% |
| Net Income Margin | 34.1% | 36.5% | 24.5% | 21.6% | 18.8% | -2.8% |
| CAPEX, % of revenue | 40.9% | 23.0% | 26.6% | 16.5% | 21.6% | 5.1% |
| ROIC | 23.9% | 19.7% | 12.0% | 8.8% | 5.5% | -3.3% |
| ROE | 19.3% | 18.0% | 10.1% | 7.9% | 5.9% | -1.9% |
| Net Debt/EBITDA | -0.8x | -0.6x | -0.1x | -0.2x | -0.6x | -0.4x |
Revenue and profitability
Randgold Resources's Revenue decreased on 7.9% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.7 pp from 40.2% to 44.9% in 2015.
Gross Margin decreased on 7.0 pp from 34.4% to 27.4% in 2015.
Net Income marign decreased on 2.8 pp from 21.6% to 18.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 21.6% in 2015. Randgold Resources's CAPEX/Revenue decreased slightly on 1.4 pp from 23.0% in 2012 to 21.6% in 2015. It's average CAPEX/Revenue for the last three years was 21.6%.Randgold Resources invested a big chunk of EBITDA (63.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.47%) and ROE (5.92%). ROIC decreased on 3.3 pp from 8.8% to 5.5% in 2015. ROE decreased slightly on 1.9 pp from 7.9% to 5.9% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.0x. Net Debt / EBITDA dropped on 0.4x from -0.2x to -0.6x in 2015. Debt showed almost no change in 2015 while cash jumped on 158% in 2015.
Appendix 1: Peers in Mining
Below you can find Randgold Resources 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 |
|---|
| Patagonia Gold ($PGD) | | | | 234.6% | |
| Zccm Investments Hldgs ($ZCC) | | -30.1% | 102.1% | 92.4% | |
| Rambler Metals & Mining ($RMM) | | -65.4% | 2,744.1% | 79.2% | -34.2% |
| Shanta Gold ($SHG) | | | | 74.1% | |
| Mwana Africa ($MWA) | | 86.0% | 34.2% | 30.5% | 6.9% |
| |
|---|
| Median (28 companies) | 28.4% | 6.4% | -2.6% | -5.0% | -13.8% |
|---|
| Randgold Resources ($RRS) | | 5.0% | -3.8% | -4.5% | -7.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zccm Investments Hldgs ($ZCC) | 68.4% | 51.8% | 71.4% | 85.6% | |
| Rambler Metals & Mining ($RMM) | 50.2% | 44.7% | 39.6% | 52.2% | 30.6% |
| Mwana Africa ($MWA) | 32.4% | 42.9% | 45.9% | 46.6% | 38.6% |
| Kaz Minerals ($KAZ) | 54.6% | 39.7% | 41.1% | 46.1% | |
| Polyus Gold Intl Ltd ($PGIL) | 50.5% | 51.1% | 40.2% | 46.1% | |
| |
|---|
| Median (27 companies) | 37.5% | 38.5% | 18.6% | 22.6% | 13.6% |
|---|
| Randgold Resources ($RRS) | 53.8% | 50.3% | 40.1% | 34.4% | 27.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zccm Investments Hldgs ($ZCC) | 138.5% | 146.8% | 75.2% | 88.7% | |
| Polyus Gold Intl Ltd ($PGIL) | 43.6% | 51.1% | 18.7% | 45.9% | |
| Rambler Metals & Mining ($RMM) | -26.1% | -194.4% | 29.6% | 45.1% | 20.5% |
| Antofagasta ($ANTO) | | 50.0% | 45.0% | 42.6% | 25.9% |
| Nord Gold Nv ($NORD) | 47.9% | 33.0% | 0.8% | 40.2% | |
| |
|---|
| Median (30 companies) | 27.7% | 25.0% | 16.8% | 17.3% | 12.7% |
|---|
| Randgold Resources ($RRS) | 51.6% | 52.7% | 42.7% | 39.4% | 33.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kaz Minerals ($KAZ) | 19.8% | 36.6% | 136.5% | 168.8% | |
| Goldbridges Global Resources ($GBGR) | 40.3% | 26.9% | 17.6% | 73.9% | |
| Griffin Mining ($GFM) | 12.2% | 10.8% | 10.4% | 51.2% | |
| Kirkland Lake Gold Inc ($KGI) | 54.9% | 44.6% | 72.9% | 47.7% | 21.6% |
| Serabi Gold ($SRB) | 3,151.4% | | | 44.5% | |
| |
|---|
| Median (30 companies) | 16.3% | 19.8% | 17.2% | 10.2% | 19.7% |
|---|
| Randgold Resources ($RRS) | 40.9% | 23.0% | 26.6% | 16.5% | 21.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 23.0% | 27.0% | 4.3% | 19.2% | |
| Mwana Africa ($MWA) | -39.7% | 0.1% | 12.6% | 18.3% | 7.5% |
| Caledonia Mining Corp ($CMCL) | 61.7% | 37.6% | 34.9% | 18.1% | |
| Rambler Metals & Mining ($RMM) | -1.5% | -2.6% | 3.3% | 16.7% | 0.5% |
| Shanta Gold ($SHG) | -39.2% | -14.0% | -2.4% | 15.8% | |
| |
|---|
| Median (31 companies) | 7.2% | 4.4% | 2.0% | 1.2% | 0.5% |
|---|
| Randgold Resources ($RRS) | 23.9% | 19.7% | 12.0% | 8.8% | 5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Minera Irl Ltd ($MIRL) | -0.0x | 1.0x | 4.2x | 10.0x | |
| Kaz Minerals ($KAZ) | 0.6x | 2.4x | 2.9x | 5.5x | |
| Anglo Asian Mining ($AAZ) | 0.1x | 0.7x | 2.6x | 5.2x | |
| Glencore ($GLEN) | 6.0x | 7.3x | 6.2x | 4.6x | |
| Kirkland Lake Gold Inc ($KGI) | -1.0x | -0.3x | 3.2x | 4.1x | 0.6x |
| |
|---|
| Median (23 companies) | 0.1x | 0.8x | 1.7x | 0.7x | 0.5x |
|---|
| Randgold Resources ($RRS) | -0.8x | -0.6x | -0.1x | -0.2x | -0.6x |
