Translation: Original published in Finnish on 10/30/2026 at 07:10 am EET

Source: Inderes

HKFoods will report its Q3 results on November 4 at around 8.30 am EET. We expect adjusted EBIT to remain stable compared to the comparison period. Cost inflation and export headwinds caused by African swine fever are weighing on the result, overshadowing the favorable earnings performance stemming from efficiency improvements and a better sales mix. The upward earnings guidance for the full year 2026 is likely to remain unchanged thanks to a strong H1. The refinancing of the bond carried out in September will significantly reduce financing costs, and the valuation appears moderate in our view.

Moderate growth from the domestic market, partly driven by prices

We estimate Q3 revenue to have grown by 2.0% y/y to 252 MEUR. HKFoods benefits from growth-oriented investments made in recent years, particularly in poultry and ready meals, which supports growth in retail and foodservice. At the same time, for example, exports have likely suffered from the impacts of swine fever. Food sector sales growth has been fairly stable at around 1-2% this year, and inflation has also settled in the same range. The impact of weather conditions on Q3 sales is typically small compared to early summer.

Support for earnings from efficiency measures amid cost pressures

We expect adjusted EBIT to reach 11.6 MEUR (Q3'25: 11.8 MEUR), corresponding to an adjusted EBIT margin of 4.6% (Q3'25: 4.8%). This would mark the first time in fourteen consecutive quarters that adjusted EBIT weakens from the comparison period. In our estimates, the margin contraction is driven by the negative impacts of cost inflation and swine fever, which are nevertheless partly offset by the company's efficiency measures. Our net profit estimate (before deducting minority interest and interest on the hybrid loan) is slightly below the comparison period's earnings from continuing operations (Q3'26e: 6.6 MEUR, Q3'25: 7.4 MEUR). The refinancing of the bond completed in September will substantially reduce financial expenses only from Q4 onwards.

Guidance looks secure, interest savings support valuation

HKFoods guidance is that comparable EBIT will increase from 2025 (34.1 MEUR), and we expect the company to reiterate its guidance in connection with the Q3 results (our 2026 adj. EBIT estimate is 35.8 MEUR). We estimate that earnings growth expectations are positively impacted by, among other things, the growth investments completed by the company in the previous year and the stabilization of beef product margins following price increases. On an annual basis, we estimate the earnings impact of African swine fever to be -2-3 MEUR based on the information provided by the company, which will still weigh on H1'27 earnings compared to the comparison period. However, in 2027, new efficiency gains are expected, driven by the investments made in Forssa. We believe the valuation remains moderate on an EV/EBIT basis (2026e: 9x). The P/E-based valuation will also decrease significantly as financing costs decline (2026e: 11x, 2027e: 8x). The 90 MEUR bond issued in September replaced the bond maturing in 2027, reducing annual interest expenses by an estimated ~3.5 MEUR starting from Q4 (our current estimates account for the decline in interest expenses only from the turn of the year).