Ghitha Holding P.J.S.C's (ADX:GHITHA) Problems Go Beyond Weak Profit

Ghitha Holding P.J.S.C's (ADX:GHITHA) recent weak earnings report didn't cause a big stock movement. However, we believe that investors should be aware of some underlying factors which may be of concern.

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How Do Unusual Items Influence Profit?

Importantly, our data indicates that Ghitha Holding P.J.S.C's profit received a boost of د.إ60m in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. Ghitha Holding P.J.S.C had a rather significant contribution from unusual items relative to its profit to March 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Ghitha Holding P.J.S.C.

Our Take On Ghitha Holding P.J.S.C's Profit Performance

As we discussed above, we think the significant positive unusual item makes Ghitha Holding P.J.S.C's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Ghitha Holding P.J.S.C's underlying earnings power is lower than its statutory profit. In further bad news, its earnings per share decreased in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 3 warning signs for Ghitha Holding P.J.S.C (1 is potentially serious) you should be familiar with.

This note has only looked at a single factor that sheds light on the nature of Ghitha Holding P.J.S.C's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.