Groupe Airwell Société anonyme (EPA:ALAIR) Has Debt But No Earnings; Should You Worry?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We note that Groupe Airwell Société anonyme (EPA:ALAIR) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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Why Does Debt Bring Risk?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Groupe Airwell Société anonyme's Net Debt?

You can click the graphic below for the historical numbers, but it shows that Groupe Airwell Société anonyme had €7.21m of debt in June 2025, down from €7.62m, one year before. However, because it has a cash reserve of €443.0k, its net debt is less, at about €6.77m.

A Look At Groupe Airwell Société anonyme's Liabilities

The latest balance sheet data shows that Groupe Airwell Société anonyme had liabilities of €15.1m due within a year, and liabilities of €20.4m falling due after that. Offsetting this, it had €443.0k in cash and €17.3m in receivables that were due within 12 months. So it has liabilities totalling €17.8m more than its cash and near-term receivables, combined.

This deficit casts a shadow over the €10.0m company, like a colossus towering over mere mortals. So we definitely think shareholders need to watch this one closely. After all, Groupe Airwell Société anonyme would likely require a major re-capitalisation if it had to pay its creditors today. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Groupe Airwell Société anonyme can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

View our latest analysis for Groupe Airwell Société anonyme

In the last year Groupe Airwell Société anonyme had a loss before interest and tax, and actually shrunk its revenue by 19%, to €47m. That's not what we would hope to see.

Caveat Emptor

Not only did Groupe Airwell Société anonyme's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Its EBIT loss was a whopping €3.1m. Considering that alongside the liabilities mentioned above make us nervous about the company. It would need to improve its operations quickly for us to be interested in it. Not least because it had negative free cash flow of €1.7m over the last twelve months. So suffice it to say we consider the stock to be risky. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. To that end, you should learn about the 3 warning signs we've spotted with Groupe Airwell Société anonyme (including 1 which is concerning) .

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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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.