AD Plastik d.d's (ZGSE:ADPL) Solid Profits Have Weak Fundamentals

AD Plastik d.d. (ZGSE:ADPL) just reported some strong earnings, and the market reacted accordingly with a healthy uplift in the share price. We did some analysis and think that investors are missing some details hidden beneath the profit numbers.

Our free stock report includes 3 warning signs investors should be aware of before investing in AD Plastik d.d. Read for free now.

The Impact Of Unusual Items On Profit

For anyone who wants to understand AD Plastik d.d's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from €840k 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. 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'. We can see that AD Plastik d.d's positive unusual items were quite significant relative to its profit in the year 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.

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 AD Plastik d.d's Profit Performance

As we discussed above, we think the significant positive unusual item makes AD Plastik d.d's earnings a poor guide to its underlying profitability. For this reason, we think that AD Plastik d.d's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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. 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 instance, we've identified 3 warning signs for AD Plastik d.d (1 can't be ignored) you should be familiar with.

Today we've zoomed in on a single data point to better understand the nature of AD Plastik d.d's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.