We Might See A Profit From Fugro N.V. (AMS:FUR) Soon

Fugro N.V. (AMS:FUR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Fugro N.V. provides geo-data information through integrated data acquisition, analysis, and advice for oil and gas, infrastructure, renewables, nautical, and other industries in Europe, Africa, the Americas, the Asia Pacific, the Middle East, and India. The company’s loss has recently broadened since it announced a €23m loss in the full financial year, compared to the latest trailing-twelve-month loss of €95m, moving it further away from breakeven. Many investors are wondering about the rate at which Fugro will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Fugro

Fugro is bordering on breakeven, according to the 4 Dutch Energy Services analysts. They expect the company to post a final loss in 2020, before turning a profit of €8.0m in 2021. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 90% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Fugro given that this is a high-level summary, however, keep in mind that typically energy companies, depending on the stage of operation and resource produced, 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 Fugro is its debt-to-equity ratio of 147%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Fugro which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Fugro, take a look at Fugro's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Fugro 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 Fugro 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 Fugro’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. 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.
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