MPC Container Ships ASA (OB:MPCC): Is Breakeven Near?

MPC Container Ships ASA’s (OB:MPCC): MPC Container Ships ASA engages in the shipping business in Norway. On 31 December 2017, the ØRE3.89B market-cap posted a loss of -US$2.64M for its most recent financial year. The most pressing concern for investors is MPCC’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for MPCC’s growth and when analysts expect the company to become profitable.

According to the industry analysts covering MPCC, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$18.43M in 2018. Therefore, MPCC is expected to breakeven roughly a couple of months from now! How fast will MPCC have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 51.76% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for MPCC given that this is a high-level summary, 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.

One thing I’d like to point out is that MPCC has managed its capital judiciously, with debt making up 30.03% of equity. This means that MPCC 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:

This article is not intended to be a comprehensive analysis on MPCC, so if you are interested in understanding the company at a deeper level, take a look at MPCC’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should look at:

1. Valuation: What is MPCC 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 MPCC 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 MPC Container Ships’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.