Atlantska Plovidba d.d's (ZGSE:ATPL) Earnings Are Of Questionable Quality

Despite posting some strong earnings, the market for Atlantska Plovidba d.d.'s (ZGSE:ATPL) stock hasn't moved much. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors.

Check out our latest analysis for Atlantska Plovidba d.d

The Impact Of Unusual Items On Profit

For anyone who wants to understand Atlantska Plovidba d.d's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from Kn291m worth of unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. 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, after all, that's exactly what the accounting terminology implies. Atlantska Plovidba d.d had a rather significant contribution from unusual items relative to its profit to June 2022. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Atlantska Plovidba d.d.

Our Take On Atlantska Plovidba d.d's Profit Performance

As previously mentioned, Atlantska Plovidba d.d's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. As a result, we think it may well be the case that Atlantska Plovidba d.d's underlying earnings power is lower than its statutory profit. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over 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. If you'd like to know more about Atlantska Plovidba d.d as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 4 warning signs for Atlantska Plovidba d.d and you'll want to know about these bad boys.

This note has only looked at a single factor that sheds light on the nature of Atlantska Plovidba 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. 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.