When Will Aqualis ASA (OB:AQUA) Turn A Profit?

Aqualis ASA’s (OB:AQUA): Aqualis ASA provides marine and engineering consultancy services to the offshore oil and gas and renewables sectors worldwide. The company’s loss has recently broadened since it announced a -US$6.48M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$6.82M, moving it further away from breakeven. Many investors are wondering the rate at which AQUA will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for AQUA.

View our latest analysis for Aqualis

Expectation from analysts is AQUA is on the verge of breakeven. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$2.88M in 2018. AQUA is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which AQUA must grow year-on-year. It turns out an average annual growth rate of 79.48% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

OB:AQUA Past Future Earnings May 7th 18
OB:AQUA Past Future Earnings May 7th 18

I’m not going to go through company-specific developments for AQUA given that this is a high-level summary, but, take into account that by and large oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one aspect worth mentioning. AQUA currently has no debt on its balance sheet, which is quite unusual for a cash-burning oil and gas company, which typically has high debt relative to its equity. AQUA currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of AQUA which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at AQUA, take a look at AQUA’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further examine:

  1. Valuation: What is AQUA 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 AQUA 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 Aqualis’s board and the CEO’s back ground.
  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.