Kaz Minerals Net Income surged on 1,575% in 2016 and Revenue jumped on 15.2%
23 Feb 2017 • About Kaz Minerals (
$KAZ) • By InTwits
Kaz Minerals reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 39.4% in 2016, 21.4% in 2015, 29.1% in 2014, 51.5% in 2013, 15.4% in 2012
- Kaz Minerals has high CAPEX intensity: 5 year average CAPEX/Revenue was 110.5%. At the same time it's a lot of higher than industry average of 15.5%.
- CAPEX is quite volatile: 321 in 2016, 1,122 in 2015, 1,428 in 2014, 1,271 in 2013, 1,228 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kaz Minerals ($KAZ) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,353 | 931 | 846 | 665 | 766 | 15.2% |
| Gross Profit | 1,330 | 383 | 390 | 236 | 353 | 49.6% |
| SG&A | 869 | 175 | 164 | 153 | 132 | -13.7% |
| EBITDA | 518 | 479 | 246 | 142 | 302 | 112.7% |
| Net Income | -2,271 | -2,030 | -2,362 | -12 | 177 | -1,575.0% |
Balance Sheet
|
|---|
| Cash | 1,246 | 1,715 | 1,730 | 851 | 1,108 | 30.2% |
| Short Term Debt | 29 | 503 | 181 | 303 | 331 | 9.2% |
| Long Term Debt | 2,439 | 2,608 | 2,911 | 3,201 | 3,446 | 7.7% |
Cash flow
|
|---|
| Capex | 1,228 | 1,271 | 1,428 | 1,122 | 321 | -71.4% |
Ratios
|
|---|
| Revenue growth | -5.9% | -72.2% | -9.1% | -21.4% | 15.2% | |
| EBITDA growth | -61.9% | -7.5% | -48.6% | -42.3% | 112.7% | |
| Gross Margin | 39.7% | 41.1% | 46.1% | 35.5% | 46.1% | 10.6% |
| EBITDA Margin | 15.4% | 51.5% | 29.1% | 21.4% | 39.4% | 18.1% |
| Net Income Margin | -67.7% | -218.0% | -279.2% | -1.8% | 23.1% | 24.9% |
| SG&A, % of revenue | 25.9% | 18.8% | 19.4% | 23.0% | 17.2% | -5.8% |
| CAPEX, % of revenue | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% | -126.8% |
| ROIC | 2.5% | 2.4% | 1.5% | 2.0% | 5.4% | 3.4% |
| ROE | -30.1% | -38.8% | -74.8% | -1.0% | 41.5% | 42.5% |
| Net Debt/EBITDA | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x | -9.8x |
Revenue and profitability
Kaz Minerals's Revenue jumped on 15.2% in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 11.6 pp from 58.0% to 69.6% in FY2016.
Gross Margin surged on 10.6 pp from 35.5% to 46.1% in 2016. SG&A as a % of Revenue decreased on 5.8 pp from 23.0% to 17.2% in 2016.
Net Income marign jumped on 24.9 pp from -1.8% to 23.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
Kaz Minerals's CAPEX/Revenue was 41.9% in 2016. Kaz Minerals showed big decline in CAPEX/Revenue of 94.6 pp from 137% in 2013 to 41.9% in 2016. Average CAPEX/Revenue for the last three years was 126%.The company has spent a lot to CAPEX (106% of EBITDA) to fuel its growth.
Return on investment
The company operates at good ROE (41.55%) while ROIC is low (5.38%). ROIC increased on 3.4 pp from 2.0% to 5.4% in 2016. ROE surged on 42.5 pp from -0.99% to 41.5% in 2016.
Leverage (Debt)
Debt level is 8.8x Net Debt / EBITDA and 12.5x Debt / EBITDA. Net Debt / EBITDA dropped on 9.8x from 18.7x to 8.8x in 2016. Debt increased on 7.8% in 2016 while cash surged on 30.2% in 2016.
Management team
Kaz Minerals's CEO Oleg Nikolaevich Novachuk is a founder and has spent 11 years at the company. Kaz Minerals'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 | 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 ($KGI) | 54.7% | -5.1% | 14.2% | 26.9% | |
| |
|---|
| Median (30 companies) | -2.8% | -2.6% | -4.7% | -7.4% | 5.2% |
|---|
| Kaz Minerals ($KAZ) | | -72.2% | -9.1% | -21.4% | 15.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 51.1% | 40.2% | 46.1% | 58.8% | 62.6% |
| Coalfield Resources ($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% |
| Trans-Siberian Gold ($TSG) | 17.2% | -4.8% | 22.6% | 33.0% | |
| |
|---|
| Median (29 companies) | 38.5% | 18.6% | 22.6% | 18.1% | 27.7% |
|---|
| Kaz Minerals ($KAZ) | 39.7% | 41.1% | 46.1% | 35.5% | 46.1% |
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% | 61.4% |
| 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 ($TSG) | 24.7% | 8.0% | 32.7% | 38.1% | |
| |
|---|
| Median (31 companies) | 27.2% | 16.8% | 17.3% | 18.3% | 22.7% |
|---|
| Kaz Minerals ($KAZ) | 15.4% | 51.5% | 29.1% | 21.4% | 39.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | |
| Antofagasta ($ANTO) | 13.0% | 22.5% | 32.0% | 30.9% | 22.0% |
| |
|---|
| Median (30 companies) | 19.8% | 17.2% | 10.2% | 14.0% | 15.1% |
|---|
| Kaz Minerals ($KAZ) | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Polyus Gold Intl Ltd ($PGIL) | 27.0% | 4.3% | 19.2% | 29.7% | 30.9% |
| Nord Gold Nv ($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 ($TSG) | -1.1% | -6.8% | 5.0% | 9.2% | |
| |
|---|
| Median (31 companies) | 4.6% | 2.4% | 2.0% | 1.2% | 2.4% |
|---|
| Kaz Minerals ($KAZ) | 2.5% | 2.4% | 1.5% | 2.0% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Goldbridges Global Resources ($GBGR) | 2.2x | | 1.3x | 10.9x | |
| Glencore ($GLEN) | 7.3x | 6.2x | 4.6x | 5.5x | 4.0x |
| Griffin Mining ($GFM) | 0.8x | 1.4x | 4.0x | 4.4x | |
| Bisichi Mining ($BISI) | 0.9x | 1.7x | 1.3x | 4.0x | |
| Anglo Asian Mining ($AAZ) | 0.7x | 2.6x | 5.2x | 2.6x | |
| |
|---|
| Median (22 companies) | 0.4x | 1.4x | 0.6x | 0.8x | 2.1x |
|---|
| Kaz Minerals ($KAZ) | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x |
