We Think That There Are More Issues For Zarneni Hrani Bulgaria AD (BUL:ZHBG) Than Just Sluggish Earnings

A lackluster earnings announcement from Zarneni Hrani Bulgaria AD (BUL:ZHBG) last week didn't sink the stock price. We think that investors are worried about some weaknesses underlying the earnings.

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The Impact Of Unusual Items On Profit

For anyone who wants to understand Zarneni Hrani Bulgaria AD's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from лв3.7m worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Zarneni Hrani Bulgaria AD had a rather significant contribution from unusual items relative to its profit to September 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 Zarneni Hrani Bulgaria AD.

Our Take On Zarneni Hrani Bulgaria AD's Profit Performance

As we discussed above, we think the significant positive unusual item makes Zarneni Hrani Bulgaria AD's earnings a poor guide to its underlying profitability. For this reason, we think that Zarneni Hrani Bulgaria AD's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Sadly, its EPS was down over the last twelve months. 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. If you want to do dive deeper into Zarneni Hrani Bulgaria AD, you'd also look into what risks it is currently facing. For example, Zarneni Hrani Bulgaria AD has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

Today we've zoomed in on a single data point to better understand the nature of Zarneni Hrani Bulgaria AD's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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 with significant insider holdings to be useful.

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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.