Nippon Beet Sugar ManufacturingLtd's (TSE:2108) Profits Appear To Have Quality Issues

Nippon Beet Sugar Manufacturing Co.,Ltd.'s (TSE:2108) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.

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How Do Unusual Items Influence Profit?

Importantly, our data indicates that Nippon Beet Sugar ManufacturingLtd's profit received a boost of JP¥2.7b in unusual items, over the last year. 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 that's as you'd expect, given these boosts are described as 'unusual'. Nippon Beet Sugar ManufacturingLtd had a rather significant contribution from unusual items relative to its profit to March 2025. 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 Nippon Beet Sugar ManufacturingLtd.

Our Take On Nippon Beet Sugar ManufacturingLtd's Profit Performance

As we discussed above, we think the significant positive unusual item makes Nippon Beet Sugar ManufacturingLtd's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Nippon Beet Sugar ManufacturingLtd's underlying earnings power is lower than its statutory profit. But at least holders can take some solace from the 52% per annum growth in EPS for the last three. 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 2 warning signs for Nippon Beet Sugar ManufacturingLtd and you'll want to know about these.

This note has only looked at a single factor that sheds light on the nature of Nippon Beet Sugar ManufacturingLtd's profit. 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 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.