The operating profitability levels of Finnish meat processors Atria and HKFoods have been on a favorable trajectory this year, and both raised their earnings guidance during the third quarter.

The increase in the 2024 EBIT guidance shows that the efficiency investments made by the company are bearing fruit.

We expect HKFoods’ business performance to continue improving in the near future, although the Q2 result was softer than we expected. The risk associated with the financial position has decreased, but high interest costs still make reducing the debt burden difficult and weaken shareholder’s expected return.

HKFoods announced on Monday that it had issued notes in the amount of 90 MEUR. The notes carry a floating interest rate based on 3-month Euribor plus a margin of 7.5%.

The final result of the tender offer was slightly higher than the preliminary results, but overall the need for a forecast revision remains limited.

Based on the preliminary results, the company will be able to convert the majority (74 MEUR) of its current 90 MEUR bond into a new one, which would significantly strengthen the maturity structure of its debt financing.

Focusing on Finnish business operations will enable HKFoods to reduce the debt burden in its balance sheet and support the company’s investment capacity.