When Will Auriant Mining AB (publ) (STO:AUR) Turn A Profit?
Auriant Mining AB (publ)’s (OM:AUR): Auriant Mining AB (publ), a junior mining company, explores for and produces gold in Russia. The KR147.07M market-cap company announced a latest loss of -KR19.11M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which AUR will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for AUR’s growth and when analysts expect the company to become profitable.
View our latest analysis for Auriant Mining
Expectation from analysts is AUR is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of KR91.45M in 2019. AUR is therefore projected to breakeven around a couple of months from now! What rate will AUR have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 47.49%, which is extremely buoyant. If this rate turns out to be too aggressive, AUR may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for AUR given that this is a high-level summary, though, take into account that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing I would like to bring into light with AUR is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of AUR to cover in one brief article, but the key fundamentals for the company can all be found in one place – AUR’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further examine:
Historical Track Record: What has AUR’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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Auriant Mining’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
