Investors Can Find Comfort In United Mining Industries' (TADAWUL:9583) Earnings Quality

Shareholders appeared unconcerned with United Mining Industries Company's (TADAWUL:9583) lackluster earnings report last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.

See our latest analysis for United Mining Industries

The Impact Of Unusual Items On Profit

To properly understand United Mining Industries' profit results, we need to consider the ر.س14m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. If United Mining Industries doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of United Mining Industries.

Our Take On United Mining Industries' Profit Performance

Unusual items (expenses) detracted from United Mining Industries' earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that United Mining Industries' statutory profit actually understates its earnings potential! On the other hand, its EPS actually shrunk in the last twelve months. 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 want to do dive deeper into United Mining Industries, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 4 warning signs for United Mining Industries and you'll want to know about these.

This note has only looked at a single factor that sheds light on the nature of United Mining Industries' 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 with high insider ownership.

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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.