Mount Gibson Iron Ltd. :MTGRY-US: Earnings Analysis: For the six months ended December 31, 2016 : February 17, 2017

Mount Gibson Iron Ltd. reports financial results for the half-year ended December 31, 2016.

We analyze the earnings along side the following peers of Mount Gibson Iron Ltd. – Cliffs Natural Resources Inc. (CLF-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 70.59 million, Net Earnings of USD 15.98 million.
  • Gross margins widened from 7.10% to 18.48% compared to the same period last year, operating (EBITDA) margins now 14.28% from 0.63%.
  • Earnings growth from operating margin improvements as well as one-time items.

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

2016-12-31 2016-06-30 2015-12-31 2015-06-30 2014-12-31
Relevant Numbers (Semi-Annual)
Revenues 70.59 81.5 89.6 99.12 168.58
Revenue Growth (YOY) -21.22 -17.77 -46.85 -72.03 -64.14
Earnings 15.98 69.97 -10.94 -15.41 -773.09
Earnings Growth (YOY) 246.1 554.03 98.58 -193.33 -1171.7
Net Margin 22.64 85.86 -12.21 -15.55 -458.59
EPS 0.16 0.68 -0.1 -0.3 -7.09
Return on Equity 10.79 55.65 -9.81 -11.98 -210.22
Return on Assets 9.06 43.88 -7.27 -8.68 -160.46

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Market Share Versus Profits

Revenues History
Earnings History

MTGRY-US‘s change in revenue this period compared to the same period last year of -21.22% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that MTGRY-US is holding onto its market share. Also, for comparison purposes, revenues changed by -13.39% and earnings by -77.16% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 7.10% to 18.48% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 0.63% to 14.28% compared to the same period last year. For comparison, gross margins were 15.09% and EBITDA margins were 8.52% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -6.78% to 10.09% and (2) one-time items. The company’s pretax margins are now 21.06% compared to -12.21% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Mount Gibson Iron Ltd. engages in the business of mining, exploration, and development of hematite iron ore deposits. It operates through the Extension Hill and Koolan Island segments. The Extension hill segment includes the mining, crushing, transportation, and sale of iron ore. The Koolan Island segment involves the mining, crushing, sale of iron. The company was founded in 1996 and is headquartered in West Perth, Australia.

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