HKFoods Q3'25 flash comment: Big picture in line with expectations

Translation: Original published in Finnish on 11/05/2025 at 09:20 am EET

Source: Inderes

HKFoods published its Q3 interim report today, which was largely in line with our estimates in terms of operational earnings. Revenue was lower than expected as the lower-margin segments were shrinking. Net income was surprisingly strong, impacted by lower-than-estimated net financial expenses and taxes. As a whole, we consider the report quite neutral relative to expectations, unless other key considerations emerge at the company's press conference at 10 am EET.

Sales structure improved, total revenue decreased

HKFoods’ revenue decreased by 2% y/y in Q3 and remained 5% below our forecast (we expected 3% growth). However, sales grew in channels with a better margin profile, namely retail and foodservice. According to the company, industrial sales and export revenues decreased as planned. Retail sales were particularly supported by the growth in sales of meat products, but poultry and pork sales also increased. The company reports that it has succeeded in commercial measures in the foodservice market, where it says the demand picture has generally been challenging.

Operational bottom lines are mostly at the expected level

Comparable EBIT  grew marginally year-on-year (Q3’25: 11.8 MEUR vs. Q3’24: 11.6 MEUR), and exceeded our forecast by 4%. Comparable profitability was supported by, e.g., a better sales mix, as well as savings achieved in the company's efficiency program and increased production efficiency. The sharp increase in the purchase price of beef due to the scarcity of beef weakened the comparable EBIT. EBITDA and reported EBIT, on the other hand, were slightly below our forecasts. The reported bottom line was burdened by 0.8 MEUR in non-recurring costs related to, e.g. the assessment of the future of the Polish unit and other write-downs. Adjusted net income clearly exceeded our estimate, which was impacted by significantly lower net financial expenses and taxes than estimated.

Outlook unchanged

HKFoods reiterated its guidance that expects comparable EBIT to increase from 2024 (27.7 MEUR). The company has successfully improved its comparable EBIT for 11 consecutive quarters, although earnings growth has recently slowed compared to, e.g., the very strong performance in 2024. Recently completed investments in the Vantaa meal production and the Eura ready-to-eat products line moderately support the company's growth outlook and enable a higher-margin sales distribution.