WEBULL

Is Wielton (WSE:WLT) Using Too Much Debt?

Simply Wall St · 01/04 06:51

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We can see that Wielton S.A. (WSE:WLT) does use debt in its business. But the real question is whether this debt is making the company risky.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

When Is Debt A Problem?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Wielton Carry?

The image below, which you can click on for greater detail, shows that at September 2025 Wielton had debt of zł659.2m, up from zł585.5m in one year. However, because it has a cash reserve of zł78.8m, its net debt is less, at about zł580.4m.

debt-equity-history-analysis
WSE:WLT Debt to Equity History January 4th 2026

A Look At Wielton's Liabilities

We can see from the most recent balance sheet that Wielton had liabilities of zł1.40b falling due within a year, and liabilities of zł206.1m due beyond that. Offsetting this, it had zł78.8m in cash and zł463.8m in receivables that were due within 12 months. So its liabilities total zł1.07b more than the combination of its cash and short-term receivables.

This deficit casts a shadow over the zł453.5m company, like a colossus towering over mere mortals. So we'd watch its balance sheet closely, without a doubt. After all, Wielton would likely require a major re-capitalisation if it had to pay its creditors today. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Wielton can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Check out our latest analysis for Wielton

Over 12 months, Wielton made a loss at the EBIT level, and saw its revenue drop to zł2.1b, which is a fall of 11%. That's not what we would hope to see.

Caveat Emptor

Not only did Wielton's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost a very considerable zł140m at the EBIT level. When we look at that alongside the significant liabilities, we're not particularly confident about the company. We'd want to see some strong near-term improvements before getting too interested in the stock. Not least because it burned through zł92m in negative free cash flow over the last year. So suffice it to say we consider the stock to be risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 3 warning signs with Wielton (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.