SSR Mining, Inc. :SSRM-US: Earnings Analysis: Q2, 2017 By the Numbers : October 10, 2017

SSR Mining, Inc. reports financial results for the quarter ended June 30, 2017.


  • Summary numbers: Revenues of USD 116.98 million, Net Earnings of USD 37.32 million.
  • Gross margins narrowed from 33.23% to 21.52% compared to the same period last year, operating (EBITDA) margins now 39.89% from 34.36%.
  • Change in operating cash flow of 19.11% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth due to contribution of one-time items.

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

2017-06-30 2017-03-31 2016-12-31 2016-09-30 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 116.98 117.91 127.32 143.38 118.78
Revenue Growth (%YOY) -1.51 16.15 40.54 85.75 23.96
Earnings (mil) 37.32 15.05 12.13 38.04 12.48
Earnings Growth (%YOY) 198.98 554.22 118.18 164.03 270.36
Net Margin (%) 31.9 12.76 9.53 26.53 10.51
EPS 0.31 0.12 0.1 0.31 0.13
Return on Equity (%) 4.12 1.75 1.44 4.54 2.06
Return on Assets (%) 9.96 4.12 3.35 10.54 4.32

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, SSRM-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 SSRM-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 -0.78% and earnings by 148.02% compared to the previous period.

Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from 34.36% to 39.89%. For comparison, gross margins were 28.00% and EBITDA margins were 41.75% in the last 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

SSRM-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 531.32 days, compared to last year’s level of 339.10 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.

SSRM-US’s year-on-year change in operating cash flow of 19.11% 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 operating (EBIT) margins contracted from 22.95% to 18.78%. In spite of this, the company’s earnings rose. This was influenced primarily by one-time items, which improved pretax margins from 13.07% to 34.20%.

EBIT Margin History
PreTax Margin History

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Company Profile

SSR Mining, Inc. engages in the operation, development, exploration, and acquisition of precious metal projects. It focuses on the production in Pirquitas and Marigold Mines and Seabee Gold Operation. It primarily explores for silver, zinc, gold, and lead deposits. The company was founded on December 11, 1946 is headquartered in Vancouver, Canada.

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