Loss-Making Ora Banda Mining Limited (ASX:OBM) Set To Breakeven
Ora Banda Mining Limited (ASX:OBM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ora Banda Mining Limited engages in the exploration, operation, and development of mineral properties in Australia. The AU$489m market-cap company announced a latest loss of AU$44m on 30 June 2023 for its most recent financial year result. Many investors are wondering about the rate at which Ora Banda Mining 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.
See our latest analysis for Ora Banda Mining
Ora Banda Mining is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2023, before turning a profit of AU$9.1m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 82%, which is rather optimistic! 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 Ora Banda Mining's upcoming projects, however, bear in mind that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 35% 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 too many aspects of Ora Banda Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ora Banda Mining's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Valuation: What is Ora Banda Mining 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 Ora Banda Mining is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ora Banda Mining’s board and the CEO’s background.
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.
