Atlantic Sapphire ASA (OB:ASA): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Atlantic Sapphire ASA's (OB:ASA) future prospects. Atlantic Sapphire ASA, together with its subsidiaries, engages in the production and sale of land-based salmon in Denmark and the United States. The kr1.4b market-cap company announced a latest loss of US$134m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Atlantic Sapphire will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Atlantic Sapphire

Atlantic Sapphire is bordering on breakeven, according to the 3 Norwegian Food analysts. They expect the company to post a final loss in 2024, before turning a profit of US$832k in 2025. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 111% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Atlantic Sapphire's upcoming projects, however, take into account that generally 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 15% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Atlantic Sapphire 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 Atlantic Sapphire, take a look at Atlantic Sapphire's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Valuation: What is Atlantic Sapphire 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 Atlantic Sapphire 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 Atlantic Sapphire’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.