Kenmare Resources revenue dropped on 18.2% in 2015 while EBITDA Margin surged on 23.7 pp from -31.8% to -8.1%
29 Apr 2016 • About Kenmare Resources (
$KMR) • By InTwits
Kenmare Resources reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kenmare Resources doesn't have a profitable business model yet: 2015 ROIC is -5.4%
- The company operates at negative EBITDA Margin: -8.1%
- EBITDA Margin is quite volatile: -8.1% in 2015, -31.8% in 2014, 21.0% in 2013, 42.1% in 2012, 42.8% in 2011
- Kenmare Resources has high CAPEX intensity: 5 year average CAPEX/Revenue was 47.6%. At the same time it's a lot of higher than industry average of 24.5%.
- CAPEX is quite volatile: 5.6 in 2015, 5.2 in 2014, 82.7 in 2013, 164 in 2012, 170 in 2011
- The company has unprofitable business model: ROIC is at -5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kenmare Resources ($KMR) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 167.5 | 234.6 | 137.9 | 174.3 | 142.6 | -18.2% |
| Gross Profit | 70.0 | 100.2 | 24.1 | 1.0 | -25.6 | -2,787.2% |
| SG&A | 11.1 | 15.8 | 14.4 | 21.2 | 14.0 | -34.2% |
| EBITDA | 71.7 | 98.9 | 29.0 | -55.4 | -11.5 | -79.2% |
| Net Income | 23.7 | 49.5 | -44.1 | -100.8 | -60.6 | -39.9% |
Balance Sheet
|
|---|
| Cash | 77.3 | 46.1 | 67.5 | 21.8 | 14.4 | -34.2% |
| Short Term Debt | 113.8 | 147.3 | 198.2 | 76.5 | 342.4 | 347.9% |
| Long Term Debt | 215.3 | 178.9 | 158.5 | 262.4 | 0.3 | -99.9% |
Cash flow
|
|---|
| Capex | 169.8 | 164.3 | 82.7 | 5.2 | 5.6 | 7.3% |
Ratios
|
|---|
| Revenue growth | 82.9% | 40.1% | -41.2% | 26.4% | -18.2% | |
| EBITDA growth | 311.4% | 37.9% | -70.7% | -290.9% | -79.2% | |
| Gross Margin | 41.8% | 42.7% | 17.5% | 0.5% | -17.9% | -18.5% |
| EBITDA Margin | 42.8% | 42.1% | 21.0% | -31.8% | -8.1% | 23.7% |
| Net Income Margin | 14.2% | 21.1% | -32.0% | -57.8% | -42.5% | 15.3% |
| SG&A, % of revenue | 6.6% | 6.7% | 10.5% | 12.2% | 9.8% | -2.4% |
| CAPEX, % of revenue | 101.4% | 70.0% | 60.0% | 3.0% | 3.9% | 0.9% |
| ROIC | 6.5% | 9.2% | 0.5% | -10.0% | -5.4% | 4.6% |
| ROE | 4.9% | 9.0% | -6.9% | -16.4% | -11.3% | 5.1% |
| Net Debt/EBITDA | 3.5x | 2.8x | 10.0x | | | 0.0x |
Revenue and profitability
Kenmare Resources's Revenue dropped on 18.2% in 2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 23.7 pp from -31.8% to -8.1% in 2015.
Gross Margin dropped on 18.5 pp from 0.55% to -17.9% in 2015. SG&A as a % of Revenue decreased on 2.4 pp from 12.2% to 9.8% in 2015.
Net Income marign jumped on 15.3 pp from -57.8% to -42.5% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.9% in 2015. Kenmare Resources showed big decline in CAPEX/Revenue of 66.1 pp from 70.0% in 2012 to 3.9% in 2015. It's average level of CAPEX/Revenue for the last three years was 22.3%.
Return on investment
The company operates at negative ROIC (-5.41%) and ROE (-11.35%). ROIC increased on 4.6 pp from -10.0% to -5.4% in 2015. ROE increased on 5.1 pp from -16.4% to -11.3% in 2015.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt increased slightly on 1.1% in 2015 while cash dropped on 34.2% in 2015.
Appendix 1: Peers in Mining
Below we provide Kenmare Resources 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 |
|---|
| Coalfield Resources ($CRES) | | | 19,087.5% | -5.0% | 803.4% |
| Serabi Gold ($SRB) | | | | | 177.8% |
| Anglo Pacific Group ($APF) | | -56.3% | -2.8% | -76.4% | 149.4% |
| Griffin Mining ($GFM) | | -2.8% | -7.5% | -35.9% | 31.2% |
| Kirkland Lake Gold Inc ($KGI) | | 54.7% | -5.1% | 14.2% | 26.9% |
| |
|---|
| Median (26 companies) | 22.7% | 3.2% | -2.6% | -5.0% | -7.5% |
|---|
| Kenmare Resources ($KMR) | | 40.1% | -41.2% | 26.4% | -18.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 50.5% | 51.1% | 40.2% | 46.1% | 58.8% |
| Coalfield Resources ($CRES) | | | | | 54.4% |
| Zccm Investments Hldgs ($ZCC) | 68.4% | 51.8% | 71.4% | 85.6% | 45.9% |
| Mwana Africa ($MWA) | 32.4% | 42.9% | 45.9% | 46.6% | 38.6% |
| Kaz Minerals ($KAZ) | 54.6% | 39.7% | 41.1% | 46.1% | 35.5% |
| |
|---|
| Median (25 companies) | 37.5% | 38.5% | 19.8% | 22.7% | 22.8% |
|---|
| Kenmare Resources ($KMR) | 41.8% | 42.7% | 17.5% | 0.5% | -17.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Coalfield Resources ($CRES) | | 1,693,625.0% | 28.4% | 0.1% | 259.6% |
| Polyus Gold Intl Ltd ($PGIL) | 43.6% | 51.1% | 18.7% | 45.9% | 58.0% |
| Anglo Pacific Group ($APF) | 90.3% | 76.2% | 77.9% | -58.0% | 53.7% |
| Nord Gold Nv ($NORD) | 47.9% | 33.0% | 0.8% | 40.2% | 44.9% |
| Randgold Resources ($RRS) | 51.6% | 52.7% | 42.7% | 39.4% | 33.8% |
| |
|---|
| Median (27 companies) | 27.7% | 25.0% | 16.8% | 18.9% | 18.3% |
|---|
| Kenmare Resources ($KMR) | 42.8% | 42.1% | 21.0% | -31.8% | -8.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kaz Minerals ($KAZ) | 19.8% | 36.6% | 136.5% | 168.8% | 168.7% |
| Weatherly International ($WTI) | 58,087.5% | 8.6% | | | 161.8% |
| Hwange Colliery Co ($HWA) | 10.2% | 3.5% | | 0.5% | 45.6% |
| Goldbridges Global Resources ($GBGR) | 40.3% | 26.9% | 17.6% | 73.9% | 40.1% |
| Caledonia Mining Corp ($CMCL) | 15.3% | 10.5% | 18.0% | 11.5% | 33.8% |
| |
|---|
| Median (26 companies) | 16.3% | 19.8% | 17.2% | 11.0% | 14.5% |
|---|
| Kenmare Resources ($KMR) | 101.4% | 70.0% | 60.0% | 3.0% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 23.0% | 27.0% | 4.3% | 19.2% | 29.7% |
| Nord Gold Nv ($NORD) | 16.9% | 6.6% | -9.0% | 13.8% | 16.1% |
| Coalfield Resources ($CRES) | -0.6% | 0.1% | 0.8% | 0.0% | 15.8% |
| Kirkland Lake Gold Inc ($KGI) | 11.3% | 19.7% | 1.5% | -0.7% | 9.2% |
| Caledonia Mining Corp ($CMCL) | 61.7% | 37.6% | 34.9% | 18.1% | 8.4% |
| |
|---|
| Median (27 companies) | 8.9% | 4.4% | 2.8% | 2.3% | 1.7% |
|---|
| Kenmare Resources ($KMR) | 6.5% | 9.2% | 0.5% | -10.0% | -5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kaz Minerals ($KAZ) | 0.6x | 2.4x | 2.9x | 5.5x | 18.7x |
| Goldbridges Global Resources ($GBGR) | | 2.2x | | 1.3x | 10.9x |
| Glencore ($GLEN) | 6.0x | 7.3x | 6.2x | 4.6x | 5.5x |
| Griffin Mining ($GFM) | -2.1x | 0.8x | 1.4x | 4.0x | 4.4x |
| Bisichi Mining ($BISI) | 1.9x | 0.9x | 1.7x | 1.3x | 4.0x |
| |
|---|
| Median (20 companies) | -0.0x | 0.4x | 1.4x | 0.6x | 0.8x |
|---|
