Yahoo Movies Loss-Making Burgundy Diamond Mines Limited (ASX:BDM) Set To Breakeven
Burgundy Diamond Mines Limited (ASX:BDM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Burgundy Diamond Mines Limited, a diamond exploration company, focuses on developing diamond projects. The AU$256m market-cap company announced a latest loss of AU$28m on 30 June 2023 for its most recent financial year result. Many investors are wondering about the rate at which Burgundy Diamond Mines will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Burgundy Diamond Mines
Expectations from some of the Australian Metals and Mining analysts is that Burgundy Diamond Mines is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$222m in 2024. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 31% is expected, which is extremely buoyant. 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 Burgundy Diamond Mines' upcoming projects, though, bear in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% 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 key fundamentals of Burgundy Diamond Mines which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Burgundy Diamond Mines, take a look at Burgundy Diamond Mines' company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Burgundy Diamond Mines 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 Burgundy Diamond Mines 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 Burgundy Diamond Mines’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.
