Yoma Strategic Holdings Ltd. (SGX:Z59) just reported some strong earnings, and the market reacted accordingly with a healthy uplift in the share price.  However, our analysis suggests that shareholders may be missing some factors that indicate the earnings result was not as good as it looked.    

SGX:Z59 Earnings and Revenue History June 4th 2024

How Do Unusual Items Influence Profit?

To properly understand Yoma Strategic Holdings' profit results, we need to consider the US$40m gain attributed to 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.  Which is hardly surprising, given the name.   Yoma Strategic Holdings had a rather significant contribution from unusual items relative to its profit to March 2024.  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 Yoma Strategic Holdings.

Our Take On Yoma Strategic Holdings' Profit Performance

As previously mentioned, Yoma Strategic Holdings' 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 Yoma Strategic Holdings' 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.     Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors.     If you'd like to know more about Yoma Strategic Holdings as a business, it's important to be aware of any risks it's facing.    For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Yoma Strategic Holdings.  

This note has only looked at a single factor that sheds light on the nature of Yoma Strategic Holdings' 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.