Magontec's Q3 2024 Earnings: A Closer Look at the Loss per Share Increase

Magontec Limited (ASX:MGL), a leading manufacturer of generic and specialist magnesium alloys, reported its third-quarter 2024 earnings, revealing a loss per share of AU$0.028, a significant increase from the AU$0.012 loss in the same period last year. This article delves into the factors contributing to this deterioration and the implications for Magontec's financial outlook.


The 22% fall in consensus revenue estimates (Oct 29) and the 33% decrease in the price target (Sep 25) have negatively impacted Magontec's financial performance. The company's first-half 2024 earnings showed a substantial loss of AU$0.066, compared to a profit of AU$0.031 in the same period last year. This decline in earnings is a continuation of the trend seen in the full-year 2023 results, where EPS dropped from AU$0.21 in 2022 to AU$0.006 in 2023.


Magontec's profitability ratios have been fluctuating, with net margin reaching -5.39% in 2023. The company's return on equity (ROE) has also been volatile, ranging from 0.83% to 4.7% over the past four years. Magontec's capital intensity, measured by CAPEX as a percentage of current assets and EBITDA, has been high and volatile, suggesting potential inefficiencies in capital allocation.

The increased loss per share in Q3 2024 can be attributed to a combination of factors, including the fall in revenue estimates, the decrease in the price target, and the decline in Magontec's financial performance. The company's revenue growth trajectory has significantly declined, with a 35.46% decrease in 2023 compared to the previous year. Earnings in 2023 were AU$466,000, a decrease of -97.18% compared to 2022.


Magontec's financial performance has been declining, with a significant loss in H1 2024 and a substantial drop in EPS from FY 2022 to FY 2023. The company's profitability ratios have been fluctuating, and its capital intensity has been high and volatile. Magontec's financial health is not readily available, and its cash flow per share, dividend per share, and book value per share have been fluctuating. Magontec's EPS has been volatile, and its share price has been declining. The company's revenue and earnings have been decreasing, suggesting a deterioration in its financial performance.

In conclusion, Magontec's increased loss per share in Q3 2024 is a result of a combination of factors, including a fall in revenue estimates, a decrease in the price target, and a decline in the company's financial performance. Investors should closely monitor Magontec's future earnings releases and assess the company's ability to manage risks and adapt to changing market conditions.