When Can We Expect A Profit From Cinis Fertilizer AB (publ) (STO:CINIS)?

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 environmentally friendly mineral fertilizers by recycling industrial waste products. With the latest financial year loss of kr33m and a trailing-twelve-month loss of kr82m, the kr965m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Cinis Fertilizer's path to profitability – when will it 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 Cinis Fertilizer

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 2024, before generating positive profits of kr49m in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Cinis Fertilizer's growth isn’t the focus of this broad overview, but, take into account that by and large 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 Cinis Fertilizer is its debt-to-equity ratio of 137%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Cinis Fertilizer to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cinis Fertilizer's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.