Kaisa and Pauli have prepared a pre-earnings report on HKFoods :), as the company will publish its Q1 report on Wednesday, May 6.
We expect revenue to have turned to growth and adjusted operating profit to have improved from the comparison period, supported by operational efficiency and a better sales mix. However, we have slightly lowered our earnings forecasts for the current year due to cost pressures and typical delays in pricing. Based on our forecasts assuming moderate earnings growth, the stockâs valuation (2026e adj. EV/EBIT: 9x) is neutral, and the expected return on a one-year horizon remains sluggish in our view. Consequently, we are lowering our recommendation to Reduce (prev. Accumulate) and our target price to EUR 1.70 (prev. EUR 2.00), reflecting the forecast changes.
Here are Kaisaâs quick comments on this morningâs result.
HKFoods published its Q1 results this morning, which slightly exceeded our expectations regarding both revenue and earnings. Good momentum in the retail and food service channels supported revenue, and the companyâs efficiency measures successfully offset increased costs. As expected, the company reiterated its guidance pointing towards an earnings improvement for the current year. Overall, we consider the report relatively neutral, especially considering the rising costs. HKFoodsâ briefing, held at 10:00 AM, can be followed here.
Kaisa interviewed HKFoodsâ CEO Juha Ruohola regarding Q1
Topics:
00:00 Introduction
00:13 Return to growth path
00:59 Efficiency measures are working
02:24 Development of the sales mix
03:12 Changes in demand
04:16 Beef prices and availability
05:54 Cost pressures and pricing cycles
08:00 Drivers for achieving guidance
Kaisa and Pauli have published a new company report on HKFoods following the Q1 results
HKFoodsâ streak of earnings improvements continued in Q1. Operationally, the result was largely in line with our expectations, as strong momentum in retail and food service supported revenue growth, and efficiency measures compensated for increased costs. As expected, the company reiterated its guidance for the current year, and we kept our forecasts practically unchanged. Based on our forecasts assuming moderate earnings growth, the stockâs valuation (2026e: adj. EV/EBIT 9x) is neutral, and the expected return on a one-year horizon remains dull in our books. Consequently, we reiterate our reduce recommendation and target price of EUR 1.70.
Here are Pauliâs preliminary comments ahead of HKâs earnings report next Wednesday
We expect the result to strengthen compared to the comparison period, partly due to the barbecue season, which started early thanks to the weather. The cost pressure caused by the conflict in the Middle East has likely not had a very significant impact yet.
Here are Pauliâs comments regarding the African swine fever.
The African swine fever found in Finnish wild boars has a negative impact on the export opportunities of the domestic meat industry. An interruption in pork exports to Asia could reduce the companiesâ operating profits by an estimated 3-5%.
In my opinion, a 3-5% drop in earnings seems very small. The parts of the pig that were sold to Asia do not sell elsewhere, which almost completely erodes operating profit. Secondly, the portion of the meat that cannot be sold to Asia and for which there is consumer demand will be sold in Finland, as there is no other quick alternative. This means a price reduction in pork prices for consumers. This, in turn, lowers the demand for beef and poultry, which means their prices must also be lowered. I suspect that the earnings drop will be greater than the estimated 3-5%.
For HKFoods, this is even more severe as the debt-heavy balance sheet and financial covenants might be at risk. We have now sold off Sweden and the Baltics, and there is nothing easily left to sell, so a share issue remains the only option if financial covenants were to be in jeopardy. This would have to be done at a very low price, which would further dilute the value of the share.
A strange comment? âI suspect, I think, ifâŠâ no figures or facts to support your opinions? Ruohola from HK said that the company could lose 10m in sales. Analysts are predicting a 3-5% decline in earnings. And in Kimmonevâs opinion, this will lead to covenants being breached and a share issue?? Good griefâŠ
A 10m sales drop can be really bad on its own if it involves cuts that cannot be sold in Finland. Sales to Asia have had very good margins because it has been possible to sell trotters and other parts there that fetch almost nothing in Finland. The 2025 net profit was 14.2m euros, so if, for example, 80% of the sales drop went straight to the bottom line, the net profit would weaken significantly. Indirect effects will come on top of that if there are declines in beef and broiler meat prices. These are difficult to estimate in advance and will emerge slowly over the course of the following year.
Your pork exports to China already started to decline last year when they imposed import tariffs on Europe (thereâs been a bit of a back-and-forth between the automotive industry and food production). There have been mentions of this in the Q3 reports since last year.
Pauli had HKFoods CEO Juha Ruohola on the hot seat regarding Q2
Topics:
00:00 Introduction
00:13 Factors behind the favorable development
01:42 Impact of African swine fever
02:33 Opening of the Chinese and Japanese markets
03:10 Export of products
04:06 Investments in the Forssa production facility
05:29 Efficiency program and growth
06:26 Passing cost pressures on to sales prices
07:15 Guidance and outlook for the rest of the year
Here is the company report from Pauli following the companyâs Q2
The realization of the 2026 guidance, which anticipates rising earnings, seems quite secure based on a stronger-than-expected H1. However, we forecast that earnings growth will stall in H2, partly due to the export effects caused by swine fever and a potential intensification of cost inflation. In the big picture, the company still seems to be finding ways to strengthen profitability, against which the current valuation level appears attractive. We are upgrading our recommendation to âaddâ (prev. âreduceâ) and raising our target price to 1.80 euros (prev. 1.70 âŹ).
Growth across the board, earnings slightly stronger than expected
