Hume Cement Industries Berhad (KLSE:HUMEIND) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Hume Cement Industries Berhad's (KLSE:HUMEIND) business as it appears the company may be on the cusp of a considerable accomplishment. Hume Cement Industries Berhad, an investment holding company, manufactures and sells cement and cement related, and concrete and concrete related products in Malaysia. The RM676m market-cap company’s loss lessened since it announced a RM46m loss in the full financial year, compared to the latest trailing-twelve-month loss of RM13m, as it approaches breakeven. As path to profitability is the topic on Hume Cement Industries Berhad'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.

Check out our latest analysis for Hume Cement Industries Berhad

Hume Cement Industries Berhad is bordering on breakeven, according to some Malaysian Basic Materials analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of RM15m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 82% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Hume Cement Industries Berhad's growth isn’t the focus of this broad overview, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Hume Cement Industries Berhad currently has a debt-to-equity ratio of 165%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Hume Cement Industries Berhad, so if you are interested in understanding the company at a deeper level, take a look at Hume Cement Industries Berhad's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Hume Cement Industries Berhad 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 Hume Cement Industries Berhad 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 Hume Cement Industries Berhad’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.

When trading Hume Cement Industries Berhad or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on 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.