When Can We Expect A Profit From Havila Kystruten AS (OB:HKY)?

Havila Kystruten AS (OB:HKY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Havila Kystruten AS operates as a shipping company in Norway. The company’s loss has recently broadened since it announced a kr675m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr767m, moving it further away from breakeven. Many investors are wondering about the rate at which Havila Kystruten will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Havila Kystruten

According to some industry analysts covering Havila Kystruten, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr149m in 2025. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 93%, 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 Havila Kystruten's upcoming projects, however, bear in mind that typically 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 Havila Kystruten is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Havila Kystruten 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 Havila Kystruten 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 Havila Kystruten’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.