Centamin Net Income jumped on 316% in 2016 and EBITDA Margin jumped on 23.2 pp from 30.4% to 53.5%
01 Feb 2017 • About Centamin (
$CEY) • By InTwits
Centamin reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Centamin is a fast growth stock: 2016 revenue growth was 35.2%, 5 year revenue CAGR was 15.1% at 2016 ROIC 18.1%
- Centamin has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.0%. At the same time it's a lot of higher than industry average of 19.9%.
- CAPEX is quite volatile: 107 in 2016, 70.9 in 2015, 88.5 in 2014, 281 in 2013, 238 in 2012
- The company has highly profitable business model: ROIC is at 18.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Centamin ($CEY) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 426.1 | 503.8 | 472.6 | 508.4 | 687.4 | 35.2% |
| Gross Profit | 256.3 | 226.4 | 114.3 | 92.2 | 298.1 | 223.5% |
| SG&A | 15.0 | 11.4 | 9.1 | 0.6 | 0.2 | -67.4% |
| EBITDA | 261.6 | 226.2 | 168.3 | 154.3 | 367.9 | 138.4% |
| Net Income | 232.2 | 184.0 | 81.6 | 51.6 | 214.8 | 316.4% |
Balance Sheet
|
|---|
| Cash | 147.1 | 106.0 | 125.7 | 199.6 | 399.9 | 100.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 238.1 | 281.4 | 88.5 | 70.9 | 106.7 | 50.4% |
Ratios
|
|---|
| Revenue growth | 25.2% | 18.2% | -6.2% | 7.6% | 35.2% | |
| EBITDA growth | 24.1% | -13.5% | -25.6% | -8.3% | 138.4% | |
| Gross Margin | 60.2% | 44.9% | 24.2% | 18.1% | 43.4% | 25.2% |
| EBITDA Margin | 61.4% | 44.9% | 35.6% | 30.4% | 53.5% | 23.2% |
| Net Income Margin | 54.5% | 36.5% | 17.3% | 10.1% | 31.2% | 21.1% |
| SG&A, % of revenue | 3.5% | 2.3% | 1.9% | 0.1% | 0.0% | -0.1% |
| CAPEX, % of revenue | 55.9% | 55.8% | 18.7% | 14.0% | 15.5% | 1.6% |
| ROIC | 24.6% | 15.7% | 6.6% | 4.5% | 18.1% | 13.6% |
| ROE | 25.3% | 16.5% | 6.4% | 3.8% | 14.9% | 11.1% |
| Net Debt/EBITDA | -0.6x | -0.5x | -0.7x | -1.3x | -1.1x | 0.2x |
Revenue and profitability
The company's Revenue jumped on 35.2% in 2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 23.2 pp from 30.4% to 53.5% in 2016.
Gross Margin jumped on 25.2 pp from 18.1% to 43.4% in 2016. SG&A as a % of Revenue showed almost no change in 2016.
Net Income marign jumped on 21.1 pp from 10.1% to 31.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 15.5%. CAPEX/Revenue dropped on 40.3 pp from 55.8% in 2013 to 15.5% in 2016. It's average CAPEX/Revenue for the last three years was 16.1%.
Return on investment
The company operates at good ROIC (18.09%) and ROE (14.92%). ROIC surged on 13.6 pp from 4.5% to 18.1% in 2016. ROE surged on 11.1 pp from 3.8% to 14.9% in 2016.
Leverage (Debt)
The company has no debt. Cash surged on 100% in 2016.
Management team
The company's CEO Andrew Pardey "Andy" is a founder and has spent 3 years at the company. Centamin's CFO Ross Jerrard has spent 2 years at the company.
Appendix 1: Peers in Mining
Below we provide Centamin 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 ($KGI) | 54.7% | -5.1% | 14.2% | 26.9% | |
| |
|---|
| Median (30 companies) | 1.3% | -3.2% | -4.7% | -7.7% | 0.3% |
|---|
| Centamin ($CEY) | | 18.2% | -6.2% | 7.6% | 35.2% |
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 ($ZCC) | 51.8% | 71.4% | 85.6% | 45.9% | 26.8% |
| Mwana Africa ($MWA) | 42.9% | 45.9% | 46.6% | 38.6% | 29.1% |
| Kaz Minerals ($KAZ) | 39.7% | 41.1% | 46.1% | 35.5% | |
| |
|---|
| Median (29 companies) | 38.5% | 18.6% | 22.6% | 22.8% | 23.2% |
|---|
| Centamin ($CEY) | 60.2% | 44.9% | 24.2% | 18.1% | 43.4% |
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 ($TSG) | 24.7% | 8.0% | 32.7% | 38.1% | |
| |
|---|
| Median (31 companies) | 25.0% | 16.8% | 17.3% | 18.3% | 9.3% |
|---|
| Centamin ($CEY) | 61.4% | 44.9% | 35.6% | 30.4% | 53.5% |
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% | 10.2% |
| 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 ($CMCL) | 10.5% | 18.0% | 11.5% | 33.8% | |
| |
|---|
| Median (30 companies) | 19.8% | 17.2% | 10.2% | 14.5% | 15.1% |
|---|
| Centamin ($CEY) | 55.9% | 55.8% | 18.7% | 14.0% | 15.5% |
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 ($TSG) | -1.1% | -6.8% | 5.0% | 9.2% | |
| |
|---|
| Median (31 companies) | 4.4% | 2.0% | 1.2% | 1.2% | 1.1% |
|---|
| Centamin ($CEY) | 24.6% | 15.7% | 6.6% | 4.5% | 18.1% |
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 ($BISI) | 0.9x | 1.7x | 1.3x | 4.0x | |
| |
|---|
| Median (22 companies) | 0.8x | 1.7x | 0.7x | 1.1x | 2.9x |
|---|
| Centamin ($CEY) | -0.6x | -0.5x | -0.7x | -1.3x | -1.1x |
