In this commentary, I will examine Sidma SA. Steel Products’s (ATSE:SIDMA) latest earnings update (30 June 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the metals and mining industry performed. As an investor, I find it beneficial to assess SIDMA’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Sidma Steel Products

How Did SIDMA’s Recent Performance Stack Up Against Its Past?

For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to examine different companies on a more comparable basis, using new information. For Sidma Steel Products, its most recent bottom-line (trailing twelve month) is -€3.87M, which, in comparison to the previous year’s level, has become less negative. Given that these values may be fairly short-term thinking, I have calculated an annualized five-year figure for Sidma Steel Products’s earnings, which stands at -€9.26M. This shows that, though net income is negative, it has become less negative over the years.

We can further assess Sidma Steel Products’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Sidma Steel Products’s revenue growth has been relatively unexciting, with an annual growth rate of -1.61%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the GR metals and mining industry has been amplifying average earnings growth of 71.18% in the past year, and a strong 17.64% over the past five. This means that whatever tailwind the industry is benefiting from, Sidma Steel Products has not been able to leverage it as much as its industry peers.

What does this mean?

Though Sidma Steel Products’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Sidma Steel Products may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Sidma Steel Products to get a more holistic view of the stock by looking at: