The company exhibits a failure to achieve operating leverage, as evidenced by 2022Q4 operating margins of -86.2% despite reported gross margins of 77.8%.
| Sales/Revenue | 2.02M | 6.1M | 6.16M | 4.99M | 3.96M | 2.65M |
| Revenue Growth % | - | -1.04% | - | 26.12% | 49.3% | - |
| Cost of Goods Sold | 544.52K | 427.36K | 1.9M | 5.02M | 1.32M | 1.39M |
| COGS % of Revenue | - | 7.01% | 30.87% | 100.48% | 33.25% | 52.58% |
| Gross Profit | 1.47M | 5.67M | 4.26M | 3.21M | 2.64M | 1.26M |
| Gross Margin % | 73.03% | 92.98% | 69.13% | 64.28% | 66.75% | 47.42% |
| Gross Profit Growth % | - | 33.11% | - | 21.46% | 110.18% | - |
| Operating Expenses | 2.3M | 6.43M | 98.53M | 2.44M | 3.26M | 2.58M |
| OpEx % of Revenue | - | 105.38% | 1598.54% | 48.78% | 82.29% | 97.32% |
| Selling, General & Admin | 3.09M | 2.69M | 2.12M | 2.34M | 1.14M | 1.05M |
| SG&A % of Revenue | - | 44.13% | 34.46% | 46.94% | 28.7% | 39.68% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - |
| Other Operating Expenses | 291.68K | 3.74M | 96.41M | 92K | 2.12M | 1.53M |
| Operating Income | -2.37M | -776.89K | -94.39M | -2.27M | -615K | -1.32M |
| Operating Margin % | -117.64% | -12.74% | -1531.28% | -45.39% | -15.54% | -49.91% |
| Operating Income Growth % | - | 99.18% | - | -268.46% | 53.51% | - |
| EBITDA | -1.08M | 1.94M | -92.03M | 34K | 1.24M | 100K |
| EBITDA Margin % | -53.32% | 31.87% | -1493.07% | 0.68% | 31.4% | 3.77% |
| EBITDA Growth % | - | 102.11% | - | -97.26% | 1143% | - |
| D&A (Non-Cash Add-back) | 1.3M | 2.72M | 2.35M | 2.3M | 1.86M | 1.42M |
| EBIT | -1.7M | -410K | -94.46M | -2.14M | -16.78K | -1.47M |
| Net Interest Income | -142.91K | -361K | -421K | -255K | -251K | -206K |
| Interest Income | 3 | 7 | 18.31K | 4 | 0 | 0 |
| Interest Expense | 142.91K | 360.99K | 439.14K | 254.56K | 250.82K | 206.25K |
| Other Income/Expense | 803.49K | 16.3K | -459K | 75.25K | -10.62K | -349.55K |
| Pretax Income | -1.84M | -761K | -94.85M | -2.38M | -626K | -1.67M |
| Pretax Margin % | -91.19% | -12.48% | -1538.71% | -47.76% | -15.82% | -63.09% |
| Income Tax | 87.08K | -127K | 133K | 8K | 43K | -90.55K |
| Effective Tax Rate % | -4.73% | 16.69% | -0.14% | -0.34% | -6.87% | 5.41% |
| Net Income | -1.93M | -633K | -94.98M | -2.39M | -669K | -1.58M |
| Net Margin % | -95.51% | -10.38% | -1540.87% | -47.92% | -16.9% | -59.68% |
| Net Income Growth % | - | 99.33% | - | -257.55% | 57.71% | - |
| Net Income (Continuing) | -1.29M | -633K | -94.98M | -2.39M | -669K | -1.58M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | - | -0.10 | -7.49 | -0.21 | -0.06 | -0.17 |
| EPS Growth % | - | 98.69% | - | -251.76% | 64.88% | - |
| EPS (Basic) | - | -0.10 | -7.49 | -0.21 | -0.06 | -0.17 |
| Diluted Shares Outstanding | 8.02M | 6.47M | 12.68M | 9.3M | 11.2M | 9.3M |
| Basic Shares Outstanding | 8.02M | 6.47M | 12.68M | 11.2M | 11.2M | 9.3M |
| Dividend Payout Ratio | - | - | - | - | - | - |
Imminent liquidity and solvency risk
As indicated by the most recent financial disclosures, ESGL's revenue growth has stalled, with a year-over-year decline of 1.04% suggesting that the firm is struggling to scale its specialized waste regeneration services within the highly competitive and land-constrained Singaporean industrial market environment.
The lack of consistent revenue generation across multiple quarters points to a potential ceiling in the company's ability to capture additional industrial waste feedstock. Investors should monitor whether this stagnation reflects a loss of pricing power or an inability to secure new long-term contracts with key petrochemical and semiconductor clients.
While reported gross margins reached 77.8% in 2022Q4, these figures appear to exclude critical operational costs, as evidenced by the company's inability to translate this high gross profitability into positive operating margins, which remained deeply negative at -12.74% based on the provided financial data.
The disconnect between gross and operating margins suggests that the company's cost structure is heavily weighted toward fixed overheads that are not being adequately absorbed by current revenue levels. This implies that the business model may be structurally unprofitable without a significant increase in throughput and operational scale.
Based on the reported income statements, ESGL exhibits a failure to achieve operating leverage, as SG&A expenses frequently exceed gross profit, resulting in persistent operating losses that suggest the current infrastructure is not yet optimized for the high-fixed-cost nature of hazardous waste regeneration.
The company's inability to scale operating income faster than gross profit indicates that management has not yet achieved the necessary utilization rates for its treatment facilities. This lack of efficiency warrants further investigation into whether the current technical processes are truly scalable or if they require excessive ongoing maintenance.
With cash and equivalents reported at approximately $634,882, the company faces a precarious financial position, as the persistent negative operating margins suggest that the current cash burn rate may lead to an imminent need for dilutive equity financing to maintain basic operations.
Short-sellers would likely focus on the company's inability to generate positive cash flow despite its specialized niche in the circular economy. The reliance on external capital to fund ongoing losses, combined with the lack of revenue growth, suggests that the business model may be fundamentally unsustainable in its current form.
Quick answers to the most common questions about buying ESGL stock.
For fiscal year 2024, ESGL Holdings Limited (ESGL) reported total revenue of $6.1M. This represents a 130.1% increase compared to $2.7M in 2020.
ESGL Holdings Limited (ESGL) reported a net loss of $0.6M for the fiscal year ending 2024.
ESGL Holdings Limited (ESGL) reported an operating income of $-0.8M, resulting in an operating profit margin of -12.7%. This margin reflects the operational efficiency of the business before interest and taxes.
ESGL Holdings Limited (ESGL) generated $5.7M in gross profit for the year, representing a gross profit margin of 93.0%. This demonstrates the company's core pricing power and production efficiency.