Kenmare Resources Debt dropped on 70.0% in 2016
22 Mar 2017 • About Kenmare Resources (
$KMR) • By InTwits
Kenmare Resources reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kenmare Resources doesn't have a profitable business model yet: FY2016 ROIC is -2.9%
- EBITDA Margin is quite volatile: 3.7% in FY2016, -8.1% in FY2015, -31.8% in FY2014, 21.0% in FY2013, 42.1% in FY2012
- Kenmare Resources has high CAPEX intensity: 5 year average CAPEX/Revenue was 28.3%. At the same time it's a lot of higher than industry average of 14.9%.
- CAPEX is quite volatile: 6.7 in FY2016, 5.6 in FY2015, 5.2 in FY2014, 82.7 in FY2013, 164 in FY2012
- The company has unprofitable business model: ROIC is at -2.9%
- It operates with high leverage: Net Debt/EBITDA is 8.6x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kenmare Resources ($KMR) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 234.6 | 137.9 | 174.3 | 142.6 | 141.5 | -0.8% |
| Gross Profit | 100.2 | 24.1 | 1.0 | -25.6 | -2.5 | -90.1% |
| SG&A | 15.8 | 14.4 | 21.2 | 14.0 | 14.2 | 1.6% |
| EBITDA | 98.9 | 29.0 | -55.4 | -11.5 | 5.3 | -145.6% |
| Net Income | 49.5 | -44.1 | -100.8 | -60.6 | -15.2 | -74.9% |
Balance Sheet
|
|---|
| Cash | 46.1 | 67.5 | 21.8 | 14.4 | 57.8 | 302.6% |
| Short Term Debt | 147.3 | 198.2 | 76.5 | 342.4 | 2.9 | -99.2% |
| Long Term Debt | 178.9 | 158.5 | 262.4 | 0.3 | 100.0 | 37,778.8% |
Cash flow
|
|---|
| Capex | 164.3 | 82.7 | 5.2 | 5.6 | 6.7 | 20.4% |
Ratios
|
|---|
| Revenue growth | 40.1% | -41.2% | 26.4% | -18.2% | -0.8% | |
| EBITDA growth | 37.9% | -70.7% | -290.9% | -79.2% | -145.6% | |
| Gross Margin | 42.7% | 17.5% | 0.5% | -17.9% | -1.8% | 16.1% |
| EBITDA Margin | 42.1% | 21.0% | -31.8% | -8.1% | 3.7% | 11.8% |
| Net Income Margin | 21.1% | -32.0% | -57.8% | -42.5% | -10.8% | 31.8% |
| SG&A, % of revenue | 6.7% | 10.5% | 12.2% | 9.8% | 10.0% | 0.2% |
| CAPEX, % of revenue | 70.0% | 60.0% | 3.0% | 3.9% | 4.7% | 0.8% |
| ROIC | 9.2% | 0.5% | -10.0% | -5.4% | -2.9% | 2.5% |
| ROE | 9.0% | -6.9% | -16.4% | -11.3% | -2.4% | 9.0% |
| Net Debt/EBITDA | 2.8x | 10.0x | | | 8.6x | 8.6x |
Revenue and profitability
Kenmare Resources's Revenue decreased slightly on 0.77% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 11.8 pp from -8.1% to 3.7% in FY2016.
Gross Margin surged on 16.1 pp from -17.9% to -1.8% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign jumped on 31.8 pp from -42.5% to -10.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Kenmare Resources's CAPEX/Revenue was 4.7% in FY2016. Kenmare Resources's CAPEX/Revenue dropped on 55.2 pp from 60.0% in FY2013 to 4.7% in FY2016. It's average level of CAPEX/Revenue for the last three years was 3.9%.Kenmare Resources has spent a lot to CAPEX (127% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-2.95%) and ROE (-2.38%). ROIC increased on 2.5 pp from -5.4% to -2.9% in FY2016. ROE increased on 9.0 pp from -11.3% to -2.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.6x and Debt / EBITDA is 19.6x. Net Debt / EBITDA jumped8.6x from to 8.6x in FY2016. Debt dropped on 70.0% in FY2016 while cash jumped on 303% in FY2016.
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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coalfield Resources ($CRES) | | 19,087.5% | -5.0% | 803.4% | 155.8% |
| Serabi Gold ($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 ($KGI) | 54.7% | -5.1% | 14.2% | 26.9% | |
| |
|---|
| Median (30 companies) | -3.4% | -2.6% | -5.0% | -7.4% | 12.3% |
|---|
| Kenmare Resources ($KMR) | | -41.2% | 26.4% | -18.2% | -0.8% |
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% | 38.0% |
| 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 ($KAZ) | 39.7% | 41.1% | 46.1% | 35.5% | 46.1% |
| |
|---|
| Median (29 companies) | 38.5% | 19.8% | 22.7% | 22.8% | 28.9% |
|---|
| Kenmare Resources ($KMR) | 42.7% | 17.5% | 0.5% | -17.9% | -1.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Coalfield Resources ($CRES) | 1,693,625.0% | 28.4% | 0.1% | 259.6% | 134.0% |
| Polyus Gold Intl Ltd ($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 ($TSG) | 24.7% | 8.0% | 32.7% | 38.1% | |
| |
|---|
| Median (31 companies) | 25.0% | 16.8% | 18.9% | 18.6% | 24.6% |
|---|
| Kenmare Resources ($KMR) | 42.1% | 21.0% | -31.8% | -8.1% | 3.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaz Minerals ($KAZ) | 36.6% | 136.5% | 168.8% | 168.7% | 41.9% |
| Weatherly International ($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 ($CMCL) | 10.5% | 18.0% | 11.5% | 33.8% | |
| |
|---|
| Median (30 companies) | 19.8% | 17.2% | 11.0% | 14.5% | 15.1% |
|---|
| Kenmare Resources ($KMR) | 70.0% | 60.0% | 3.0% | 3.9% | 4.7% |
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 ($CRES) | 0.1% | 0.8% | 0.0% | 15.8% | 11.6% |
| Kirkland Lake Gold Inc ($KGI) | 19.7% | 1.5% | -0.7% | 9.2% | |
| Trans-Siberian Gold ($TSG) | -1.1% | -6.8% | 5.0% | 9.2% | |
| |
|---|
| Median (31 companies) | 4.4% | 2.8% | 2.3% | 1.4% | 5.0% |
|---|
| Kenmare Resources ($KMR) | 9.2% | 0.5% | -10.0% | -5.4% | -2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaz Minerals ($KAZ) | 2.4x | 2.9x | 5.5x | 18.7x | 8.8x |
| Goldbridges Global Resources ($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 | |
| |
|---|
| Median (23 companies) | 0.4x | 1.4x | 0.6x | 1.1x | 2.1x |
|---|
