Genmin Limited (ASX:GEN): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Genmin Limited's (ASX:GEN) future prospects. Genmin Limited, an exploration and development company, produces iron ores in Africa. The AU$43m market-cap company announced a latest loss of US$13m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Genmin's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Genmin

According to the 2 industry analysts covering Genmin, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$36m in 2026. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 98% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Genmin's growth isn’t the focus of this broad overview, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Genmin is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Genmin's case is 71%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Genmin to cover in one brief article, but the key fundamentals for the company can all be found in one place – Genmin's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Valuation: What is Genmin worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Genmin is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Genmin’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.