Mwana Africa EBITDA dropped on 58.1% in 2016 and Revenue dropped on 20.4%
19 Jul 2016 • About Mwana Africa (
$MWA) • By InTwits
Mwana Africa reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mwana Africa doesn't have a profitable business model yet: FY2016 ROIC is 0.8%
- EBITDA Margin is quite volatile: 6.7% in FY2016, 12.7% in FY2015, 19.3% in FY2014, 15.8% in FY2013, 4.8% in FY2012
- Mwana Africa has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.2%. At the same time it's a lot of higher than industry average of 2.1%.
- CAPEX is quite volatile: 25.0 in FY2016, 21.5 in FY2015, 12.8 in FY2014, 18.4 in FY2013, 8.6 in FY2012
- The company has potentially unprofitable business model: ROIC is at 0.8%
- It operates with high leverage: Net Debt/EBITDA is 3.7x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mwana Africa ($MWA) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 81.3 | 109.2 | 142.5 | 152.3 | 121.3 | -20.4% |
| Gross Profit | 34.9 | 50.1 | 66.3 | 58.8 | 35.4 | -39.9% |
| SG&A | | | 21.1 | 23.7 | 17.9 | -24.5% |
| EBITDA | 3.9 | 17.2 | 27.6 | 19.4 | 8.1 | -58.1% |
| Net Income | -0.7 | -28.6 | 36.6 | 3.6 | -9.4 | -362.9% |
Balance Sheet
|
|---|
| Cash | 6.7 | 15.2 | 9.1 | 14.0 | 7.4 | -47.5% |
| Short Term Debt | 0.0 | 0.0 | 1.8 | 4.8 | 13.9 | 186.6% |
| Long Term Debt | 5.9 | 4.3 | 2.4 | 18.3 | 23.1 | 26.2% |
Cash flow
|
|---|
| Capex | 8.6 | 18.4 | 12.8 | 21.5 | 25.0 | 16.1% |
Ratios
|
|---|
| Revenue growth | 86.0% | 34.2% | 30.5% | 6.9% | -20.4% | |
| EBITDA growth | -112.0% | 338.9% | 60.0% | -29.7% | -58.1% | |
| Gross Margin | 42.9% | 45.9% | 46.6% | 38.6% | 29.1% | -9.5% |
| EBITDA Margin | 4.8% | 15.8% | 19.3% | 12.7% | 6.7% | -6.0% |
| Net Income Margin | -0.9% | -26.2% | 25.7% | 2.3% | -7.7% | -10.0% |
| SG&A, % of revenue | | | 14.8% | 15.6% | 14.7% | -0.8% |
| CAPEX, % of revenue | 10.5% | 16.8% | 9.0% | 14.1% | 20.6% | 6.5% |
| ROIC | 0.1% | 12.6% | 18.3% | 7.5% | 0.8% | -6.8% |
| ROE | -0.9% | -34.9% | 36.1% | 2.9% | -7.6% | -10.5% |
| Net Debt/EBITDA | -0.2x | -0.6x | -0.2x | 0.5x | 3.7x | 3.2x |
Revenue and profitability
The company's Revenue dropped on 20.4% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.93 pp from 9.5% to 10.4% in FY2016.
Gross Margin decreased on 9.5 pp from 38.6% to 29.1% in FY2016. SG&A as a % of Revenue decreased slightly on 0.82 pp from 15.6% to 14.7% in FY2016.
Net Income marign dropped on 10.0 pp from 2.3% to -7.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Mwana Africa's CAPEX/Revenue was 20.6% in FY2016. Mwana Africa's CAPEX/Revenue increased on 3.8 pp from 16.8% in FY2013 to 20.6% in FY2016. For the last three years the average CAPEX/Revenue was 14.6%.Battling declining revenue the company made large investments to CAPEX (308% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at low but positive ROIC (0.79%) and negative ROE (-7.56%). ROIC decreased on 6.8 pp from 7.5% to 0.79% in FY2016. ROE dropped on 10.5 pp from 2.9% to -7.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.7x and Debt / EBITDA is 4.6x. Net Debt / EBITDA jumped on 3.2x from 0.5x to 3.7x in FY2016. Debt jumped on 59.8% in FY2016 while cash dropped on 47.5% in FY2016.
Appendix 1: Peers in Mining
Below we provide Mwana Africa 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 ($KGI) | 54.7% | -5.1% | 14.2% | 26.9% | |
| |
|---|
| Median (30 companies) | 3.2% | -3.2% | -5.0% | -7.7% | 6.7% |
|---|
| Mwana Africa ($MWA) | | 34.2% | 30.5% | 6.9% | -20.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 51.1% | 40.2% | 46.1% | 58.8% | |
| Coalfield Resources ($CRES) | | | | 54.4% | |
| Zccm Investments Hldgs ($ZCC) | 51.8% | 71.4% | 85.6% | 45.9% | |
| Kaz Minerals ($KAZ) | 39.7% | 41.1% | 46.1% | 35.5% | |
| Trans-Siberian Gold ($TSG) | 17.2% | -4.8% | 22.6% | 33.0% | |
| |
|---|
| Median (29 companies) | 38.5% | 18.6% | 22.6% | 18.1% | 42.4% |
|---|
| Mwana Africa ($MWA) | 42.9% | 45.9% | 46.6% | 38.6% | 29.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coalfield Resources ($CRES) | 1,693,625.0% | 28.4% | 0.1% | 259.6% | |
| Polyus Gold Intl Ltd ($PGIL) | 51.1% | 18.7% | 45.9% | 58.0% | |
| Anglo Pacific Group ($APF) | 76.2% | 77.9% | -58.0% | 53.7% | |
| Nord Gold Nv ($NORD) | 33.0% | 0.8% | 40.2% | 44.9% | |
| Trans-Siberian Gold ($TSG) | 24.7% | 8.0% | 32.7% | 38.1% | |
| |
|---|
| Median (31 companies) | 27.2% | 18.0% | 17.3% | 18.6% | 22.7% |
|---|
| Mwana Africa ($MWA) | 4.8% | 15.8% | 19.3% | 12.7% | 6.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaz Minerals ($KAZ) | 36.6% | 136.5% | 168.8% | 168.7% | |
| Weatherly International ($WTI) | 8.6% | | | 161.8% | |
| Hwange Colliery Co ($HWA) | 3.5% | | 0.5% | 45.6% | |
| Goldbridges Global Resources ($GBGR) | 26.9% | 17.6% | 73.9% | 40.1% | |
| Caledonia Mining Corp ($CMCL) | 10.5% | 18.0% | 11.5% | 33.8% | |
| |
|---|
| Median (30 companies) | 21.5% | 17.8% | 11.0% | 14.4% | 22.0% |
|---|
| Mwana Africa ($MWA) | 10.5% | 16.8% | 9.0% | 14.1% | 20.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 27.0% | 4.3% | 19.2% | 29.7% | |
| Nord Gold Nv ($NORD) | 6.6% | -9.0% | 13.8% | 16.1% | |
| Coalfield Resources ($CRES) | 0.1% | 0.8% | 0.0% | 15.8% | |
| Kirkland Lake Gold Inc ($KGI) | 19.7% | 1.5% | -0.7% | 9.2% | |
| Trans-Siberian Gold ($TSG) | -1.1% | -6.8% | 5.0% | 9.2% | |
| |
|---|
| Median (31 companies) | 4.6% | 2.0% | 1.2% | 1.2% | 2.0% |
|---|
| Mwana Africa ($MWA) | 0.1% | 12.6% | 18.3% | 7.5% | 0.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaz Minerals ($KAZ) | 2.4x | 2.9x | 5.5x | 18.7x | |
| Goldbridges Global Resources ($GBGR) | 2.2x | | 1.3x | 10.9x | |
| Glencore ($GLEN) | 7.3x | 6.2x | 4.6x | 5.5x | |
| Griffin Mining ($GFM) | 0.8x | 1.4x | 4.0x | 4.4x | |
| Bisichi Mining ($BISI) | 0.9x | 1.7x | 1.3x | 4.0x | |
| |
|---|
| Median (22 companies) | 0.8x | 1.7x | 0.7x | 1.1x | 2.9x |
|---|
| Mwana Africa ($MWA) | -0.2x | -0.6x | -0.2x | 0.5x | 3.7x |
