As we approach the final month of 2022, many market watchers are likely setting their sights on the new year and glancing back at all that's been happening on the S&P/ASX 200 Index (ASX: XJO) this year. And not many ASX 200 shares have been battered as much as former tech favourite Novonix Ltd (ASX: NVX).
The battery technology and materials stock peaked at $12.47 in late 2021 before plummeting in 2022. The Novonix share price closed Monday's session at $2.34 – 78% lower year to date and 81% off its all-time high.
Much of its suffering can be put down to the shift in market sentiment towards unprofitable shares. Particularly, those in the technology space.
Many found themselves caught in the middle as central banks attempted to battle inflation by hiking interest rates. Higher rates mean more costly debt. And plenty of companies without positive cash flow rely on debt for growth.
But could all that be about to change for the ASX 200's Novonix? Let's take a look at when the company might post a profit.
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How is Novonix looking in 2023?
To analyse if ASX 200 tech share Novonix might turn a profit in 2023, one much first look at its business.
Novonix operates in three segments: battery technology solutions, anode materials, and cathode activities.
Much of its receipts from customers – coming in at $2.8 million in the September quarter – come from its battery tech segment.
Though, that's not nearly enough for the company to break even. It posted a $13.8 million outflow from operating activities in that period. Looking slightly further back, it revealed a $71 million loss for financial year 2022 in August.
Novonix ended the quarter just been with $181.8 million in cash – enough to fund an estimated 13.3 quarters.
Looking to the future, its profitability seemingly relies on its anode materials division. It's working to produce artificial graphite anode material for use in lithium-ion batteries.
The company expects to be producing 10,000 tonnes of the material annually next year. It plans to expand that to 40,000 tonnes annually in 2025 and 150,000 tonnes annually in 2030.
However, the division's expansion project is expected to cost around US$1 billion between 2023 and 2025. Of that, US$150 million might be granted from the United States' Department of Energy, and the company is working to secure the rest.
So, with all that in mind, could the ASX 200 tech share turn a profit in 2023? Well, the future is always uncertain.
However, considering its major ramp-up in anode material production is still a few years away and its $71 million financial year 2022 loss, market watchers might not want to hold their breath.
