We Like The Quality Of Toplofikatsia-Burgas AD's (BUL:TPLB) Earnings

Toplofikatsia-Burgas AD's (BUL:TPLB) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.

View our latest analysis for Toplofikatsia-Burgas AD

How Do Unusual Items Influence Profit?

For anyone who wants to understand Toplofikatsia-Burgas AD's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by лв4.2m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If Toplofikatsia-Burgas AD doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Toplofikatsia-Burgas AD.

Our Take On Toplofikatsia-Burgas AD's Profit Performance

Unusual items (expenses) detracted from Toplofikatsia-Burgas AD's earnings over the last year, but we might see an improvement next year. Because of this, we think Toplofikatsia-Burgas AD's earnings potential is at least as good as it seems, and maybe even better! And it's also positive that the company showed enough improvement to book a profit this year, after losing money last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've found that Toplofikatsia-Burgas AD has 3 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

This note has only looked at a single factor that sheds light on the nature of Toplofikatsia-Burgas 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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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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.