Cahya Mata Sarawak Berhad (KLSE:CMSB) Strong Profits May Be Masking Some Underlying Issues

Following the solid earnings report from Cahya Mata Sarawak Berhad (KLSE:CMSB), the market responded by bidding up the stock price. While the profit numbers were good, our analysis has found some concerning factors that shareholders should be aware of.

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How Do Unusual Items Influence Profit?

Importantly, our data indicates that Cahya Mata Sarawak Berhad's profit received a boost of RM13m in unusual items, over the last year. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. We can see that Cahya Mata Sarawak Berhad's positive unusual items were quite significant relative to its profit in the year to September 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

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 Cahya Mata Sarawak Berhad's Profit Performance

As previously mentioned, Cahya Mata Sarawak Berhad's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. For this reason, we think that Cahya Mata Sarawak Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But at least holders can take some solace from the 14% EPS growth in 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. If you'd like to know more about Cahya Mata Sarawak Berhad as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Cahya Mata Sarawak Berhad you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Cahya Mata Sarawak Berhad'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. 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.