HKFoods as an investment

[sij]

@Makex

@sij

Paragraph 1: “Of the 18.9 million euro deferred tax asset, 17.7 million euros come from the group’s Finnish operations’ losses, deferred depreciation, and non-deductible interest expenses.”

Paragraph 2: “Deferred tax assets are expected to be utilized regarding losses in 2026 and regarding deferred depreciation and non-deductible interest essentially by the end of this decade.”

If I understand correctly now, 17.7 million euros in tax assets are expected to be used in 2026. Of course, one must be careful with the fact that the wording is expected to be used.

I understand it so that the 17.7m consists of three parts: losses, deferred depreciation, and interest expenses. If they are, for example, all 1/3, then it says that regarding losses, they will be used in 2026, and the other parts by 2029? Not the entire 17.7m in 2026.

Deferred tax assets are not “cash receivables” and their utilization is not straightforward. I suppose the company already had similar ones in 2025 and yet 4.5m in taxes were recorded. I’m no expert, but by distributing group contributions, you can’t always utilize them, and thus a situation remains where taxes generated in subsidiaries are still paid even if there are such assets. I believe that in 2026 the group will pay some taxes on the profit; will it be the full 20% or something less?

Apparently, there was a reading comprehension error regarding that first paragraph. I indeed interpreted it as if that 17.7 million was entirely from losses, and the rest then from deferred depreciation and non-deductible interest expenses, but of course, that’s not how it is.

Well, I had to read more of that Note 5, and the last paragraph has a breakdown of the expiration of losses: “Tax losses from Finnish operations expire as follows: 3.0 million euros in 2028, 10.0 million euros in 2029, and 1.6 million euros in 2031.”

In total, those would be 14.6 million. But those seem to be indeed deductible losses, meaning they can be used to reduce taxable income. Consequently, the tax benefit would be, for example, with a 20% tax rate: 0.2 * 14.6 million = 2.92 million.