Kaz Minerals Net Debt / EBITDA surged on 13.1x from 5.5x to 18.7x in 2015 while Revenue dropped on 21.4%
25 Feb 2016 • About Kaz Minerals (
$KAZ) • By InTwits
Kaz Minerals reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kaz Minerals is a company in decline: 2015 revenue growth was -21.4%, 5 years revenue CAGR was -27.1%
- EBITDA Margin is quite volatile: 21.4% in 2015, 29.1% in 2014, 51.5% in 2013, 15.4% in 2012, 38.2% in 2011
- Kaz Minerals has high CAPEX intensity: 5 year average CAPEX/Revenue was 106.1%. At the same time it's a lot of higher than industry average of 25.9%.
- CAPEX is quite volatile: 138 in FY2015, 225 in FY2014, 424 in FY2013, 343 in FY2012, 211 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.0%
- It operates with high leverage: Net Debt/EBITDA is 18.7x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kaz Minerals ($KAZ) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,563 | 3,353 | 931 | 846 | 665 | -21.4% |
| Gross Profit | 1,944 | 1,330 | 383 | 390 | 236 | -39.5% |
| SG&A | 815 | 869 | 175 | 164 | 153 | -6.7% |
| EBITDA | 1,361 | 518 | 479 | 246 | 142 | -42.3% |
| Net Income | 930 | -2,271 | -2,030 | -2,362 | -12 | -99.5% |
Balance Sheet
|
|---|
| Cash | 1,102 | 1,246 | 1,715 | 1,730 | 851 | -50.8% |
| Short Term Debt | 525 | 29 | 503 | 181 | 303 | 67.4% |
| Long Term Debt | 1,368 | 2,439 | 2,608 | 2,911 | 3,201 | 10.0% |
Cash flow
|
|---|
| Capex | 707 | 1,228 | 1,271 | 1,428 | 1,122 | -21.4% |
Ratios
|
|---|
| Revenue growth | 10.1% | -5.9% | -72.2% | -9.1% | -21.4% | |
| EBITDA growth | 1.0% | -61.9% | -7.5% | -48.6% | -42.3% | |
| Gross Margin | 54.6% | 39.7% | 41.1% | 46.1% | 35.5% | -10.6% |
| EBITDA Margin | 38.2% | 15.4% | 51.5% | 29.1% | 21.4% | -7.7% |
| Net Income Margin | 26.1% | -67.7% | -218.0% | -279.2% | -1.8% | 277.4% |
| SG&A, % of revenue | 22.9% | 25.9% | 18.8% | 19.4% | 23.0% | 3.6% |
| CAPEX, % of revenue | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% | -0.1% |
| ROIC | 10.8% | 2.5% | 2.4% | 1.5% | 2.0% | 0.5% |
| ROE | 10.9% | -30.1% | -38.8% | -74.8% | -1.0% | 73.8% |
| Net Debt/EBITDA | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x | 13.1x |
Revenue and profitability
Kaz Minerals's Revenue dropped on 21.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.7 pp from 29.1% to 21.4% in 2015.
Gross Margin dropped on 10.6 pp from 46.1% to 35.5% in 2015. SG&A as a % of Revenue increased on 3.6 pp from 19.4% to 23.0% in 2015.
Net Income marign jumped on 277 pp from -279% to -1.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Kaz Minerals had CAPEX/Revenue of 169%. Kaz Minerals showed fast CAPEX/Revenue growth of 132 pp from 36.6% in 2012 to 169% in 2015. Average CAPEX/Revenue for the last three years was 158%.Battling declining revenue Kaz Minerals made large investments to CAPEX (790% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (2.01%) and negative ROE (-0.99%). ROIC increased slightly on 0.51 pp from 1.5% to 2.0% in 2015. ROE jumped on 73.8 pp from -74.8% to -0.99% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 18.7x and Debt / EBITDA is 24.7x. Net Debt / EBITDA jumped on 13.1x from 5.5x to 18.7x in 2015. Debt jumped on 13.3% in 2015 while cash dropped on 50.8% in 2015.
Management team
Kaz Minerals's CEO is Oleg Nikolaevich Novachuk. Oleg Nikolaevich Novachuk is a founder and has 11 years tenure 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 | 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 ($MWA) | | 86.0% | 34.2% | 30.5% | 6.9% |
| |
|---|
| Median (28 companies) | 28.7% | 8.3% | -2.6% | -4.7% | -7.5% |
|---|
| Kaz Minerals ($KAZ) | | -5.9% | -72.2% | -9.1% | -21.4% |
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 ($MWA) | 32.4% | 42.9% | 45.9% | 46.6% | 38.6% |
| Polyus Gold Intl Ltd ($PGIL) | 50.5% | 51.1% | 40.2% | 46.1% | |
| Griffin Mining ($GFM) | 59.6% | 54.7% | 43.6% | 44.4% | |
| |
|---|
| Median (27 companies) | 37.5% | 38.5% | 18.6% | 22.6% | 22.8% |
|---|
| Kaz Minerals ($KAZ) | 54.6% | 39.7% | 41.1% | 46.1% | 35.5% |
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 ($NORD) | 47.9% | 33.0% | 0.8% | 40.2% | 44.9% |
| |
|---|
| Median (30 companies) | 27.7% | 27.2% | 16.8% | 17.3% | 20.5% |
|---|
| Kaz Minerals ($KAZ) | 38.2% | 15.4% | 51.5% | 29.1% | 21.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% | |
| Antofagasta ($ANTO) | | 13.0% | 22.5% | 32.0% | 30.9% |
| |
|---|
| Median (30 companies) | 16.3% | 19.8% | 17.2% | 10.2% | 19.7% |
|---|
| Kaz Minerals ($KAZ) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
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 ($SHG) | -39.2% | -14.0% | -2.4% | 15.8% | |
| |
|---|
| Median (31 companies) | 7.2% | 4.6% | 2.4% | 2.0% | 2.6% |
|---|
| Kaz Minerals ($KAZ) | 10.8% | 2.5% | 2.4% | 1.5% | 2.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Minera Irl Ltd ($MIRL) | -0.0x | 1.0x | 4.2x | 10.0x | |
| Anglo Asian Mining ($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 |
| Griffin Mining ($GFM) | -2.1x | 0.8x | 1.4x | 4.0x | |
| |
|---|
| Median (23 companies) | -0.0x | 0.4x | 1.4x | 0.6x | 0.5x |
|---|
| Kaz Minerals ($KAZ) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
