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Petro Matad Limited (FRA:HA3) Is About To Turn The Corner

Simply Wall St · 05/14 06:26

Petro Matad Limited (FRA:HA3) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Petro Matad Limited, together with its subsidiaries, engages in the exploration, development, and production of oil in Mongolia. With the latest financial year loss of US$5.9m and a trailing-twelve-month loss of US$6.6m, the €24m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Petro Matad 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.

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According to the 2 industry analysts covering Petro Matad, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$900k in 2025. Therefore, the company is expected to breakeven roughly a year 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 114%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
DB:HA3 Earnings Per Share Growth May 14th 2025

We're not going to go through company-specific developments for Petro Matad given that this is a high-level summary, however, take into account that typically energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Petro Matad

Before we wrap up, there’s one aspect worth mentioning. Petro Matad currently has no debt on its balance sheet, which is quite unusual for a cash-burning oil and gas company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Petro Matad to cover in one brief article, but the key fundamentals for the company can all be found in one place – Petro Matad's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

  1. Valuation: What is Petro Matad 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 Petro Matad is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Petro Matad’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.