Additional Considerations Required While Assessing eDreams ODIGEO’s (BME:EDR) Strong Earnings

Last week’s profit announcement from eDreams ODIGEO S.A. (BME:EDR) was underwhelming for investors, despite headline numbers being robust. Our analysis uncovered some concerning factors that we believe the market might be paying attention to.

See our latest analysis for eDreams ODIGEO

An Unusual Tax Situation

We can see that eDreams ODIGEO received a tax benefit of €18m. It’s always a bit noteworthy when a company is paid by the tax man, rather than paying the tax man. We’re sure the company was pleased with its tax benefit. And given that it lost money last year, it seems possible that the benefit is evidence that it now expects to find value in its past tax losses. However, the devil in the detail is that these kind of benefits only impact in the year they are booked, and are often one-off in nature. In the likely event the tax benefit is not repeated, we’d expect to see its statutory profit levels drop, at…