Genmin Limited's (ASX:GEN) Profit Outlook

Genmin Limited (ASX:GEN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Genmin Limited (ASX: GEN), is an ASX-listed African iron ore exploration and development company with a pipeline of projects in the Republic of Gabon, central West Africa. The AU$77m market-cap company posted a loss in its most recent financial year of US$2.8m and a latest trailing-twelve-month loss of US$2.2m shrinking the gap between loss and breakeven. As path to profitability is the topic on Genmin's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Genmin

According to some industry analysts covering Genmin, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$74m in 2024. So, the company is predicted to breakeven approximately 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 91% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Genmin's upcoming projects, but, 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.

Before we wrap up, there’s one aspect worth mentioning. Genmin currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

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 relevant 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.

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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.