Loss-Making Cinis Fertilizer AB (publ) (STO:CINIS) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Cinis Fertilizer AB (publ)'s (STO:CINIS) future prospects. Cinis Fertilizer AB (publ), a green tech company, produces and sells mineral fertilizers by recycling industrial waste products in Sweden. With the latest financial year loss of kr167m and a trailing-twelve-month loss of kr197m, the kr160m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Cinis Fertilizer 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.

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Consensus from 2 of the Swedish Chemicals analysts is that Cinis Fertilizer is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr16m in 2026. The company is therefore projected to breakeven just over a year from now. 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 80% is expected, which is rather optimistic! 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 Cinis Fertilizer's upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for Cinis Fertilizer

One thing we would like to bring into light with Cinis Fertilizer is its debt-to-equity ratio of 192%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Cinis Fertilizer, so if you are interested in understanding the company at a deeper level, take a look at Cinis Fertilizer's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Historical Track Record: What has Cinis Fertilizer's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cinis Fertilizer'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.