Almonty Industries Inc.'s (TSE:AII) Profit Outlook

Almonty Industries Inc. (TSE:AII) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Almonty Industries Inc. engages in the mining, processing, and shipping of tungsten concentrate. With the latest financial year loss of CA$12m and a trailing-twelve-month loss of CA$20m, the CA$234m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Almonty Industries' 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 Almonty Industries

According to the 2 industry analysts covering Almonty Industries, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of CA$23m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Almonty Industries' upcoming projects, though, take into account that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Almonty Industries is its debt-to-equity ratio of 190%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Almonty Industries, so if you are interested in understanding the company at a deeper level, take a look at Almonty Industries' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Valuation: What is Almonty Industries 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 Almonty Industries 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 Almonty Industries’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.

If you’re looking to trade Almonty Industries, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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