Hagar (HAGA) Q1 24/25 earnings summary

Executive summary

• Q1 2024/25 saw strong operational progress and significant profit growth year-over-year, with all major business segments contributing positively.

• Operates 40 grocery stores, 22 Olís service stations, 43 ÓB stations, and other retail and warehouse operations in Iceland.

• Sales increased by 6.2% to 44.1b ISK, EBITDA rose 27.5% to 3.2b ISK, and net profit grew to 0.85b ISK compared to Q1 2023/24.

• Margin ratio improved by 2.2 percentage points to 21.6%, reflecting operational optimization and stronger demand.

• Performance driven by improved results in Olís and strengthened retail and warehouse operations.

Financial highlights

• Gross profit increased 18.1% year-over-year to 9.5b ISK, with margin ratio rising to 21.6%.

• Operating expenses rose 12.5% year-over-year; salaries and cost ratio increased to 14.7%, mainly due to labor agreements and store expansion.

• Cash from operating activities reached 3.9b ISK, up from 3.3b ISK last year; cash position at quarter-end was 4.6b ISK.

• Equity at period end was 29.0b ISK, up from 28.2b ISK at prior year-end; equity ratio at quarter-end was 35.6%.

• Total assets at ISK 81.5b, up from ISK 77.2b at prior year-end.

Outlook and guidance

• Operational outlook remains positive, supported by improved economic conditions, stable financing, and readiness to pursue new revenue streams.

• Management expects continued strong performance in core segments and is prepared to address potential economic challenges.

• Management forecasts EBITDA for FY 2024/25 in the range of ISK 13,800–14,300 million.

• Financial position is strong, with secured medium-term financing and access to short-term credit lines.

• Continued use of market financing, including commercial paper issuance, is expected.