HKFoods’ result has improved clearly due to efficiency investments and focusing on Finland. We expect earnings growth to moderate in the coming years. The timing of the redemption of the hybrid bond remained unclear, with the Board proposing a substantial return of capital to shareholders. We do not find the risk/reward ratio particularly attractive compared to other companies in the sector, although earnings growth continuing stronger than we estimate could change the situation.

HKFoods released its Q4 financial statements bulletin today. The strong comparable result was already known as the company released preliminary data in January. Net profit fell short of our expectations due to higher taxes and non-recurring items.

In mid-January, the company provided preliminary information showing that profitability developed very strongly toward the end of the year.

The improved profitability accelerates the strengthening of the balance sheet and supports the efforts to repay the hybrid loan and return to dividend payments. The valuation is still not attractive, considering the risk level of the stock. Analyst Pauli Lohi summarizes.