Afarak Group reports 48.8% EBITDA growth and 2.5 pp EBITDA Margin growth from 6.8% to 9.3%
16 Feb 2016 • About Afarak Group (
$AFRK) • By InTwits
Afarak Group reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.3% in 2015, 6.8% in 2014, 12.1% in 2013, 10.9% in 2012, 0.7% in 2011
- Afarak Group has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.3%. At the same time it's in pair with industry average of 20.7%.
- CAPEX is quite volatile: 7.3 in 2015, 14.3 in 2014, 10.9 in 2013, 4.6 in 2012, 4.1 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Afarak Group ($AFRK) key annual financial indicators
| mln. € | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 159.1 | 128.6 | 135.5 | 172.7 | 187.7 | 8.7% |
| EBITDA | 1.1 | 14.0 | 16.4 | 11.8 | 17.5 | 48.8% |
| Net Income | 23.7 | -15.5 | -4.3 | 2.9 | 8.9 | 209.8% |
Balance Sheet
|
|---|
| Cash | 65.9 | 14.2 | 13.8 | 13.3 | 19.6 | 47.3% |
| Short Term Debt | 1.1 | 2.7 | 1.4 | 5.9 | 12.1 | 106.8% |
| Long Term Debt | 84.3 | 0.1 | 0.1 | 6.3 | 3.0 | -52.5% |
Cash flow
|
|---|
| Capex | 4.1 | 4.6 | 10.9 | 14.3 | 7.3 | -49.0% |
Ratios
|
|---|
| Revenue growth | 29.0% | -19.2% | 5.4% | 27.4% | 8.7% | |
| EBITDA growth | -96.7% | 1,133.4% | 17.3% | -28.2% | 48.8% | |
| EBITDA Margin | 0.7% | 10.9% | 12.1% | 6.8% | 9.3% | 2.5% |
| Net Income Margin | 14.9% | -12.0% | -3.1% | 1.7% | 4.7% | 3.1% |
| CAPEX, % of revenue | 2.6% | 3.6% | 8.0% | 8.3% | 3.9% | -4.4% |
| ROIC | -7.1% | -4.2% | -2.7% | 2.6% | 5.3% | 2.7% |
| ROE | 10.8% | -7.2% | -2.2% | 1.6% | 5.1% | 3.6% |
| Net Debt/EBITDA | 17.3x | -0.8x | -0.7x | -0.1x | -0.3x | -0.2x |
Revenue and profitability
Afarak Group's Revenue increased on 8.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.2 pp from 16.1% to 23.3% in 2015.
Net Income marign increased on 3.1 pp from 1.7% to 4.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
Afarak Group's CAPEX/Revenue was 3.9% in 2015. Afarak Group showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue was 6.7%.
Return on investment
The company operates at low ROIC (5.26%) and ROE (5.14%). ROIC increased on 2.7 pp from 2.6% to 5.3% in 2015. ROE increased on 3.6 pp from 1.6% to 5.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.3x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 0.2x from -0.1x to -0.3x in 2015. Debt surged on 24.6% in 2015 while cash jumped on 47.3% in 2015.
Appendix 1: Peers in Industrial Metals & Mining
Below we provide Afarak Group benchmarking against other companies in Industrial Metals & 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 |
|---|
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 8.2% | 2.4% | -0.1% | 26.4% | |
| Norsk Hydro Asa ($NHY) | -5.6% | -10.2% | 1.1% | 20.1% | |
| Aluminium Bahrain Bsc ($ALBH) | 17.6% | -15.8% | 0.8% | 9.7% | |
| Ambrian ($AMBR) | 28,056.2% | -26.8% | 44.6% | 6.8% | |
| Posco ($PIDD) | | -7.7% | -2.7% | 5.2% | -10.6% |
| |
|---|
| Median (14 companies) | 14.8% | -4.4% | -1.4% | 0.7% | -10.6% |
|---|
| Afarak Group ($AFRK) | | -19.2% | 5.4% | 27.4% | 8.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 59.0% | 49.1% | 43.4% | 52.2% | |
| Severstal PJSC ($SVST) | 31.0% | 23.5% | 29.9% | 34.4% | 40.4% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 22.5% | 17.7% | 15.1% | 28.6% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 28.6% | 23.8% | 19.4% | 28.3% | |
| First Quantum Minerals ($FQM) | 50.6% | 37.3% | 31.9% | 28.2% | |
| |
|---|
| Median (14 companies) | 21.4% | 15.5% | 15.0% | 18.7% | 21.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mmc Norilsk Nickel ($MNOD) | 49.5% | 38.6% | 29.2% | 46.8% | |
| First Quantum Minerals ($FQM) | 47.7% | 80.0% | 38.1% | 39.9% | |
| Severstal PJSC ($SVST) | 22.5% | 14.9% | 19.3% | 26.4% | 32.4% |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 17.1% | 12.7% | 5.7% | 25.3% | |
| Novolipetsk Iron And Steel Corp ($NLMK) | 19.2% | 15.6% | 13.8% | 21.8% | |
| |
|---|
| Median (15 companies) | 16.3% | 13.3% | 13.8% | 13.0% | 28.3% |
|---|
| Afarak Group ($AFRK) | 0.7% | 10.9% | 12.1% | 6.8% | 9.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Base Resources Ltd ($BSE) | | | | 401.9% | 6.3% |
| First Quantum Minerals ($FQM) | 40.6% | 46.5% | 73.2% | 81.7% | |
| Mmc Norilsk Nickel ($MNOD) | 15.6% | 22.3% | 17.1% | 10.8% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 9.0% | 7.0% | 7.9% | 9.9% | |
| Vimetco Nv ($VICO) | | | | 8.8% | |
| |
|---|
| Median (15 companies) | 7.7% | 7.0% | 7.6% | 6.3% | 6.0% |
|---|
| Afarak Group ($AFRK) | 2.6% | 3.6% | 8.0% | 8.3% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zibao Metals Recycling Hldgs Ltd ($ZBO) | | 41.7% | 56.6% | 55.8% | 26.6% |
| Mmc Norilsk Nickel ($MNOD) | 32.4% | 21.8% | 14.2% | 34.1% | |
| Cheliabinsk Elektrolit Zink Plant ($CHZN) | 13.6% | 6.2% | -2.7% | 25.6% | |
| Severstal PJSC ($SVST) | 21.3% | 10.3% | 9.6% | 17.7% | 30.3% |
| Novolipetsk Iron And Steel Corp ($NLMK) | 11.8% | 7.2% | 4.1% | 12.0% | |
| |
|---|
| Median (15 companies) | 11.9% | 6.2% | 4.9% | 9.1% | 18.1% |
|---|
| Afarak Group ($AFRK) | -7.1% | -4.2% | -2.7% | 2.6% | 5.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ambrian ($AMBR) | 3,395.4x | | 42.6x | 176.1x | |
| Ezz Steel ($AEZD) | 3.4x | 4.8x | 3.6x | 19.4x | |
| Vimetco Nv ($VICO) | 5.4x | 7.7x | | 10.9x | |
| First Quantum Minerals ($FQM) | -0.3x | 0.0x | 2.5x | 4.0x | |
| OAO TMK ($TMKS) | 3.5x | 3.6x | 3.9x | 3.8x | |
| |
|---|
| Median (14 companies) | 2.2x | 2.0x | 2.1x | 1.2x | 0.9x |
|---|
| Afarak Group ($AFRK) | 17.3x | -0.8x | -0.7x | -0.1x | -0.3x |
