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:
|Relevant Numbers (Quarterly)|
|Revenue Growth (%YOY)||-1.51||16.15||40.54||85.75||23.96|
|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|
|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|
Access our Ratings and Scores for SSR Mining, Inc.
Market Share Versus Profits
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.
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 companyï¿½s 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%.
Access our Ratings and Scores for SSR Mining, Inc.
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.
CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of SSRM-US.
The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any of our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.