Great Panther Silver Ltd. :GPL-US: Earnings Analysis: Q3, 2017 By the Numbers : November 2, 2017

Great Panther Silver Ltd. reports financial results for the quarter ended September 30, 2017.


  • Summary numbers: Revenues of USD 18.26 million, Net Earnings of USD -0.67 million.
  • Gross margins narrowed from 29.27% to 11.49% compared to the same period last year, operating (EBITDA) margins now 5.09% from 28.21%.
  • Change in operating cash flow of -110.51% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-09-30 2017-06-30 2017-03-31 2016-12-31 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 18.26 15.73 12.37 12.52 15.63
Revenue Growth (%YOY) 16.82 -20.71 -7.91 -2.57 21.82
Earnings (mil) -0.67 0.83 3.04 -1.5 2.13
Earnings Growth (%YOY) -131.27 161.79 193.62 58.84 183.24
Net Margin (%) -3.65 5.3 24.57 -11.97 13.63
EPS -0 0 0.02 -0.01 0.01
Return on Equity (%) -0.8 1.01 3.83 -1.93 3.38
Return on Assets (%) -2.19 3.12 13.41 -6.68 11.45

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, GPL-US’s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if GPL-US’s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by 16.08% and earnings by -179.95% compared to the previous period.

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 29.27% to 11.49%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 28.21% to 5.09% in this time frame. For comparison, gross margins were 13.21% and EBITDA margins were 6.67% in the previous period.

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

GPL-US’s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 315.41 days, compared to last year’s level of 309.38 days.

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

GPL-US’s year-on-year change in operating cash flow of -110.51% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 21.17% to -2.03% and (2) one-time items that contributed to a decrease in pretax margins from 15.69% to -1.54%

EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Great Panther Silver Ltd.

Company Profile

Great Panther Silver Ltd. is a primary silver mining and exploration company. Its projects include El Horcon and Santa Rosa. The company is focused on mining of precious metals from its two wholly-owned operating mines in Mexico, Topia and Guanajuato. The Topia mine produces silver, gold, lead and zinc. It is located in the Sierra Madre Mountains in the state of Durango in northern Mexico. The Guanajuato mine produce silver and gold. Great Panther Silver was founded by Robert Alexander Archer on November 30, 1965 and is headquartered in Vancouver, Canada.

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