Hagar hf.: Financial Results for Q1 2026/27

Strong start to the year with solid performance across all business units

The interim financial statements of Hagar hf. for the first quarter of the 2026/27 financial year were approved by the company’s Board of Directors and CEO at a board meeting held on 30 June 2026. The statements cover the period from 1 March to 31 May 2026. The interim financial statements include the consolidated accounts of the company and its subsidiaries and have been prepared in accordance with International Financial Reporting Standards (IFRS). The statements have neither been reviewed nor audited by the company’s auditors, PricewaterhouseCoopers ehf.

Key figures

• Sales in Q1 amounted to 50,785 m.ISK (5.5% increase from Q1 2025/26). [Q1 2025/26: 48,115 m.ISK]
• Gross profit Q1 amounted to 13,281 m.ISK (26.2%). [Q1 2025/26: 11,619 m.ISK (24.1%)]
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) Q1 amounted to 5,136 m.ISK or 10.1% of sales. [Q1 2025/26: 4,046 m.ISK (8.4%)]
• Profit for Q1 amounted to 1,917 m.ISK or 3.8% of sales. [Q1 2025/26: 1,165 m.ISK (2.4%)]
• Comprehensive income for Q1 amounted to 2,011 m.ISK [Q1 2025/26: 1,189 m.ISK]
• Basic earnings per share in Q1 were 1.77 ISK [Q1 2025/26: 1.06 ISK]. Diluted earnings per share in Q1 were 1.76 ISK. [Q1 2025/26: 1.05 ISK]
• Equity amounted to 44,741 m.ISK at the end of the period and equity ratio was 37.7%. [Year end 2025/26: 42,779 m.ISK and 37.1%]
• Management’s guidance for the financial year 2026/27 assumes that EBITDA will be 18,800-19,300 m.ISK.
  

Operational highlights

• Strong start to the financial year, with the improved performance at Olís largely reflecting temporary margin effects on sales to industries following the increase in global oil prices - profitability in stores and warehouses in Iceland also improved YoY.
• Customer visits to grocery stores in Iceland increased by 1.3%, while the number of units sold rose by 2.0%. Growth in May was modest compared with the prior year, while June delivered significantly stronger growth than the first-quarter average.
• Fuel volumes sold declined by 3.7% in Q1, reflecting lower volumes both in retail and sales to industries - Icelandic Road and Coastal Administration traffic data for Q1 showed a decline in kilometers driven.
• SMS in the Faroe Islands delivered solid operational performance, with customer visits increasing by 1.0% - profitability declined slightly between years, primarily due to one-off effects related to disruptions in inbound shipping.
• The new purchasing partnership with Salling Group has resulted in more than 350 new products being introduced in Bónus and Hagkaup stores during the first quarter, offering customers lower prices and a broader product range.
• Despite Q1 results exceeding expectations, management has not raised its EBITDA guidance at this stage - uncertainty surrounding the development of global oil prices remains high, and the temporary improvement in Olís' profitability is expected to reverse to some extent as global oil prices decline.  

Finnur Oddsson, CEO:

Operations got off to a strong start in the first months of the 2026/27 financial year, although the quarter was marked by the impact of the conflict in the Middle East. Sales amounted to ISK 50.8 billion, an increase of 5.5% year-on-year. EBITDA amounted to ISK 5.1 billion and profit for the period totaled ISK 1.9 billion, representing a significant improvement from the previous year. Operations performed well across all business segments, while the results for the quarter were affected by unusual conditions in the global oil markets.

The operations of Stores and Warehouses - Iceland performed well during the quarter. Revenue increased by 6.4% to ISK 35.7 billion. Customer visits and units sold increased overall, and it is particularly encouraging to see how the new products from Salling Group are already delivering greater product choice, improved quality and lower prices for our customers. By the end of the quarter, around 350 new Salling products had been introduced to the shelves of Bónus and Hagkaup stores, increasing to almost 500 at the beginning of the second quarter. These products generally enter the market at lower prices than comparable products currently available in Iceland. The partnership with Salling Group therefore supports Bónus' objective of offering the most affordable grocery basket nationwide. About half of the product range in Bónus stores has either declined in price or remained unchanged compared with the same time last year. During the quarter, the Bónus store in Selfoss was expanded and refurbished with a strong focus on improving the customer experience, and we also announced plans to open a new Bónus store in Þorlákshöfn.

Hagkaup continued to perform well, with its broad product selection, continuous product innovation, engaging customer events and enhanced digital services continuing to resonate with customers. The performance of Aðföng and Bananar continued to reflect the strengthening operations of the Group's grocery retail business. Zara, Eldum rétt and Stórkaup all performed slightly ahead of both plan and the previous year, with revenue at Stórkaup continuing to grow rapidly, increasing by more than 20% year-on-year.

Olís delivered a very strong performance during the quarter, despite a slight decline in fuel volumes sold compared with the previous year. Revenue increased by 2.1% to ISK 11.6 billion. The improved profitability was largely attributable to highly unusual conditions in the oil market since early March, when the rapid increase in global fuel prices significantly improved margins on sales to industries, due to the nature of the underlying contracts. These effects are, however, temporary and are expected to reverse to some extent as global oil prices decline, which has already begun to materialize during the second quarter. Profitability from retail fuel sales declined slightly year-on-year due to lower fuel margins during the quarter and fewer kilometers driven. At the end of the period, the cost of part of Olís' fuel inventories exceeded their estimated net realizable value, resulting in an inventory write-down recognized in the first quarter. Otherwise, Olís' operations developed in line with expectations, with continued growth in the sale of non-fuel products and services, including convenience goods, food services and car wash services under the Glans brand.

SMS in the Faroe Islands performed well overall during the quarter, with customer visits increasing year-on-year. Profitability was, however, slightly lower than in the corresponding period last year, primarily due to a one-off loss of revenue following disruptions to freight transportation, together with higher inventory write-downs.

Overall, Hagar's performance in the first quarter exceeded management's expectations, primarily due to the strong results of Olís. Considerable uncertainty remains regarding developments in global oil markets, but oil prices have started to decline in the second quarter. It is therefore reasonable to expect that part of the positive impact on Olís' first-quarter earnings from sales to industries will reverse, although the extent and timing remain uncertain. For this reason, management is not raising its earnings guidance for the 2026/27 financial year at this stage.

As before, Hagar will continue to play an important role in mitigating the impact of higher input costs and food price inflation, with our strongest tools being efficient procurement and continued operational improvements. Our purchasing partnership with Salling Group strongly supports these priorities, as does the outstanding commitment of our employees, who work every day to make shopping both more affordable and more enjoyable. The Group's core businesses continue to perform well, our financial position remains strong, and the outlook for the business is positive.

Online investor meeting on Wednesday, 1 July 2026

An online presentation meeting for investors and market participants will be held on Wednesday, 1 July 2026, at 8:30, where Finnur Oddsson, CEO, and Guðrún Eva Gunnarsdóttir, CFO, will present the company’s operations and financial performance and answer questions.

Questions related to the financial results may be submitted during the live webcast by email to [email protected] and will be addressed, as far as possible, at the end of the meeting.

The meeting will be webcast, and registration is available here: https://www.hagar.is/skraning.

Presentation materials will be available in Icelandic on Hagar’s website, www.hagar.is, at the start of the meeting. Presentation materials will be made available in English no later than 3 July at https://www.hagar.is/en/.

For further information, please contact Finnur Oddsson, CEO ([email protected]), and Guðrún Eva Gunnarsdóttir, CFO ([email protected]), by telephone 530-5500 or email.