Stock Analysis

Robust Earnings May Not Tell The Whole Story For Malta International Airport (MTSE:MIA)

MTSE:MIA
Source: Shutterstock

Malta International Airport p.l.c.'s (MTSE:MIA) robust earnings report didn't manage to move the market for its stock. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors.

Check out our latest analysis for Malta International Airport

earnings-and-revenue-history
MTSE:MIA Earnings and Revenue History April 28th 2022

The Impact Of Unusual Items On Profit

For anyone who wants to understand Malta International Airport's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from €3.1m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Malta International Airport had a rather significant contribution from unusual items relative to its profit to December 2021. 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 Malta International Airport.

Our Take On Malta International Airport's Profit Performance

As previously mentioned, Malta International Airport'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 Malta International Airport's underlying earnings power is lower than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money 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 Malta International Airport as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Malta International Airport (including 1 which can't be ignored).

Today we've zoomed in on a single data point to better understand the nature of Malta International Airport'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 that insiders are buying to be useful.

Valuation is complex, but we're helping make it simple.

Find out whether Malta International Airport is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.