We Think Yinson Holdings Berhad's (KLSE:YINSON) Healthy Earnings Might Be Conservative

Yinson Holdings Berhad's (KLSE:YINSON) 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.

See our latest analysis for Yinson Holdings Berhad

How Do Unusual Items Influence Profit?

For anyone who wants to understand Yinson Holdings Berhad's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by RM219m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. 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. Assuming those unusual expenses don't come up again, we'd therefore expect Yinson Holdings Berhad to produce a higher profit next year, all else being equal.

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 Yinson Holdings Berhad's Profit Performance

Unusual items (expenses) detracted from Yinson Holdings Berhad's earnings over the last year, but we might see an improvement next year. Because of this, we think Yinson Holdings Berhad's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at 10% per year over the last three years. 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. If you'd like to know more about Yinson Holdings Berhad as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Yinson Holdings Berhad (of which 1 is a bit unpleasant!) you should know about.

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

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This article by Simply Wall St is general in nature. 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.
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