AFT Pharmaceuticals' (NZSE:AFT) Profits Appear To Have Quality Issues

Simply Wall St.05-30

Following the solid earnings report from AFT Pharmaceuticals Limited (NZSE:AFT), the market responded by bidding up the stock price. However, we think that shareholders should be cautious as we found...

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However, we think that shareholders should be cautious as we found...</p>\n\n<a href=\"https://simplywall.st/stocks/nz/pharmaceuticals-biotech/nzx-aft/aft-pharmaceuticals-shares/news/aft-pharmaceuticals-nzseaft-profits-appear-to-have-quality-i\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AFT Pharmaceuticals' (NZSE:AFT) Profits Appear To Have Quality Issues</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAFT Pharmaceuticals' (NZSE:AFT) Profits Appear To Have Quality Issues\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-05-30 02:27 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/nz/pharmaceuticals-biotech/nzx-aft/aft-pharmaceuticals-shares/news/aft-pharmaceuticals-nzseaft-profits-appear-to-have-quality-i><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Following the solid earnings report from AFT Pharmaceuticals Limited (NZSE:AFT), the market responded by bidding up the stock price.  However, we think that shareholders should be cautious as we found...</p>\n\n<a href=\"https://simplywall.st/stocks/nz/pharmaceuticals-biotech/nzx-aft/aft-pharmaceuticals-shares/news/aft-pharmaceuticals-nzseaft-profits-appear-to-have-quality-i\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4211","symbol_name":"区域性银行","start_time":0,"source_url":"https://simplywall.st/stocks/nz/pharmaceuticals-biotech/nzx-aft/aft-pharmaceuticals-shares/news/aft-pharmaceuticals-nzseaft-profits-appear-to-have-quality-i","article_id":"2639674601","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/6121000-choice2-main-header/1585186699299"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/nz/pharmaceuticals-biotech/nzx-aft/aft-pharmaceuticals-shares/news/aft-pharmaceuticals-nzseaft-profits-appear-to-have-quality-i","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2639674601","pubTimestamp":1780079259,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Following the solid earnings report from AFT Pharmaceuticals Limited ( NZSE:AFT ), the market responded by bidding up...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4211":"区域性银行","BK8042":"制药","AFT.NZ":"AFT Pharmaceuticals Ltd Ordinary Shares","AFT":"Apollo Senior Floating Rate Fund","FCF":"第一联邦金融"},"translate_title":"AFT Pharmaceuticals（NZSE：AFT）的利润似乎存在质量问题","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AFT":1.5,"FCF":1,"AFT.NZ":1.5},"content_text":"Following the solid earnings report from AFT Pharmaceuticals Limited (NZSE:AFT), the market responded by bidding up the stock price.  However, we think that shareholders should be cautious as we found some worrying factors underlying the profit.    We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.NZSE:AFT Earnings and Revenue History May 29th 2026 Advertisement Examining Cashflow Against AFT Pharmaceuticals' Earnings  As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit.  To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period.  You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.  Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive.  That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high.  Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.  Over the twelve months to March 2026, AFT Pharmaceuticals recorded an accrual ratio of 0.26.   Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing.    In the last twelve months it actually had negative free cash flow, with an outflow of NZ$19m despite its profit of NZ$14.7m, mentioned above.    We saw that FCF was NZ$6.2m a year ago though, so AFT Pharmaceuticals has at least been able to generate positive FCF in the past.   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 AFT Pharmaceuticals' Profit Performance AFT Pharmaceuticals didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal.      Therefore, it seems possible to us that AFT Pharmaceuticals' true underlying earnings power is actually less than its statutory profit.    Nonetheless, it's still worth noting that its earnings per share have grown at 38% over the last three years.     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.    In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved.    Case in point: We've spotted 1 warning sign for AFT Pharmaceuticals you should be aware of.   Today we've zoomed in on a single data point to better understand the nature of AFT Pharmaceuticals' 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. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"dataReport","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.43.1","shortVersion":"4.43.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2639674601","isCrawlerRequest":true}