Are Aldar Properties PJSC's (ADX:ALDAR) Statutory Earnings A Good Guide To Its Underlying Profitability?

Many investors consider it preferable to invest in profitable companies over unprofitable ones, because profitability suggests a business is sustainable. However, sometimes companies receive a one-off boost (or reduction) to their profit, and it's not always clear whether statutory profits are a good guide, going forward. In this article, we'll look at how useful this year's statutory profit is, when analysing Aldar Properties PJSC (ADX:ALDAR).

It's good to see that over the last twelve months Aldar Properties PJSC made a profit of د.إ1.79b on revenue of د.إ7.98b. The chart below shows how it has grown revenue over the last three years, but that profit has declined.

Check out our latest analysis for Aldar Properties PJSC

Of course, when it comes to statutory profit, the devil is often in the detail, and we can get a better sense for a company by diving deeper into the financial statements. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Aldar Properties PJSC's Profit Performance

Therefore, it seems possible to us that Aldar Properties PJSC's true underlying earnings power is actually less than its statutory profit. So while earnings quality is important, it's equally important to consider the risks facing Aldar Properties PJSC at this point in time. While conducting our analysis, we found that Aldar Properties PJSC has 2 warning signs and it would be unwise to ignore these.

Our examination of Aldar Properties PJSC has focussed on certain factors that can make its earnings look better than they are. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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This article by Simply Wall St is general in nature. 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.
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