We Think Saudi Arabian Mining Company (Ma'aden)'s (TADAWUL:1211) Profit Is Only A Baseline For What They Can Achieve

Saudi Arabian Mining Company (Ma'aden) (TADAWUL:1211) recently posted some strong earnings, and the market responded positively. We did some digging and found some further encouraging factors that investors will like.

How Do Unusual Items Influence Profit?

For anyone who wants to understand Saudi Arabian Mining Company (Ma'aden)'s profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ر.س1.1b due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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. If Saudi Arabian Mining Company (Ma'aden) doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

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 Saudi Arabian Mining Company (Ma'aden)'s Profit Performance

Because unusual items detracted from Saudi Arabian Mining Company (Ma'aden)'s earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that Saudi Arabian Mining Company (Ma'aden)'s statutory profit actually understates its earnings potential! Furthermore, it has done a great job growing EPS over the 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. Ultimately, this article has formed an opinion based on historical data. However, it can also be great to think about what analysts are forecasting for the future. Luckily, you can check out what analysts are forecasting by clicking here.

This note has only looked at a single factor that sheds light on the nature of Saudi Arabian Mining Company (Ma'aden)'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.