Hagar hf: Financial results for Q2 2025/26

Strong performance and a new retail center in the Faroe Islands

The interim financial statements of Hagar hf. for the second quarter of the 2025/26 financial year were approved by the company’s Board of Directors and CEO at a board meeting held on 16 October 2025. The statements cover the period from 1 March to 31 August 2025. 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 been reviewed by the company’s auditors, PricewaterhouseCoopers ehf.

Key figures*

• Sales in Q2 amounted to 51,817 m.ISK (11.2% increase from Q2 2024/25). Sales in 6M amounted to 99,932 m.ISK (10.2% growth from 6M 2024/25). [Q2 2024/25: 46,579 m.ISK, 6M 2024/25: 90,646 m.ISK]
• Gross profit Q2 amounted to 12,874 m.ISK (24.8%) and 24,493 m.ISK (24.5%) for 6M. [Q2 2024/25: 10,174 m.ISK (21.8%), 6M 2024/25: 19,711 m.ISK (21.7%)]
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) Q2 amounted to 5,485 m.ISK or 10.6% of sales. EBITDA 6M amounted to 9,531 m.ISK or 9.5% of sales. [2F 2024/25: 4,014 m.ISK (8.6%), 6M 2024/25: 7,228 m.ISK (8.0%)]
• Profit for Q2 amounted to 2,556 m.ISK or 4.9% of sales. Profit for 6M amounted to 3,721 m.ISK or 3.7% of sales. [Q2 2024/25: 1,723 m.ISK (3.7%), 6M 2024/25: 2,573 m.ISK (2.8%)]
• Comprehensive income for Q2 amounted to 2,452 m.ISK and 3,641 m.ISK for 6M. [Q2 2024/25: 1,723 m.ISK, 6M 2024/25: 2,573]
• Basic earnings per share in Q2 was 2.33 ISK and 3.39 ISK for 6M. [Q2 2024/25: 1.59 ISK, 6M 2024/25: 2.37 ISK]. Diluted earnings per share in Q2 was 1.93 ISK and 2.99 ISK for 6M. [Q2 2024/25: 1.56 ISK, 6M 2024/25: 2.33 ISK]
• Equity amounted to 39,302 m.ISK at the end of the period and equity ratio was 36.3%. [Year end 2024/25: 38,489 m.ISK and 36.6%]
• Management’s guidance for financial year 2025/26 assumes that EBITDA will be 17,000-17,500 m.ISK. The guidance was raised by 1,000 m.ISK on 22 September 2025.
  

*SMS became part of Hagar Group in Q4 2024/25 and therefore the impact is not reflected in the previous year‘s comparative figures.

Operational highlights

• Operations in Q2 were strong and exceeded management’s expectations – the strong results are primarily driven by solid performance of Olís, sound outcome of SMS in the Faroe Islands and sustained robust demand in the grocery sector.
• Customer visits to grocery stores in Iceland increased by nearly 5% during the quarter. The number of units sold also grew, by just under 2% over the same period.
• Fuel sales volume decreased by 2.0% in the quarter – with an increase in retail sales but a decline to industries.
• The gross margin reached 24.8%, an increase of 3.0 percentage points in the quarter – excluding SMS, the gross margin was 23.9%.
• Hagar’s new loyaltyprogram is set to be launched shortly – offering improved service, convenience, and value for customers.
• Olís opened two new ÓB self-service stations during the quarter, in Búðardalur and Akureyri, as well as new Glans car wash facilities in Selfoss and Grafarvogur.
• Construction activities continued at SMS in connection with the development of a new 3,000 m² retail center in Runavík in the Faroe Islands – new Bónus and Rumbul stores, along with a Sunset Boulevard restaurant and third-party retail units, are scheduled to open in November.
• Hagar’s share buyback amounted to ISK 395 million during the quarter – a total of 3.7 million shares at nominal value.

Finnur Oddsson, CEO:

Hagar’s operations are performing well across all business areas. Revenue and operating results during the summer months, the second quarter of the 2025/26 financial year, exceeded expectations. Accordingly, our management guidance has been revised upward, and EBITDA for the full year is now expected to be in the range of ISK 17,000 – 17,500 million.

Product sales in the second quarter increased by 11.2% year-over-year to ISK 51,817 million. Gross profit amounted to ISK 12,874 million, EBITDA to ISK 5,485 million, and profit to ISK 2,556 million – a robust increase across all key metrics compared to last year. Operations were strong during the quarter, but when comparing to the prior year, it is important to note that SMS in the Faroe Islands is now part of Hagar and that global oil prices declined year-over-year.

Revenue from Stores and Warehouses - Iceland amounted to ISK 34.4 billion, up 6.8% from the same period last year. EBITDA was ISK 3.1 billion, an increase of 5.1%. The number of customers visiting Hagar’s grocery stores continued to rise, as did the number of units sold. Bónus continues to grow year-over-year, while maintaining its unwavering focus on low prices and strong customer value across the country. Through efficient operations and purchasing, Bónus has managed to reduce prices on around 900 products year-over-year, while at the same time expanding its product assortment, particularly in fresh produce, healthy options, and ready meals that save families money, time, and effort. Bónus’ enhanced services for families with children have been well received, with more than 3,500 “Barnabox” (care packages) delivered to new parents and over 20 tons of LazyTown ‘‘sports candy‘‘ finding their way into homes and children’s lunchboxes so far this year. At Hagkaup, both revenue and customer visits increased, reflecting customers’ appreciation for a broad product range and continuous improvements and innovations in the area of customer service. A wide range of popular events and promotional days have been well attended, and all Hagkaup online stores, from cosmetics to catering, showed strong growth. The operations of Aðföng and Bananar remained solid and in line with increased volumes at our grocery stores, while other business units, including Eldum rétt, Stórkaup, and Zara, also performed well.

Olís delivered strong performance over the summer months, with a significant year-over-year improvement in profit. Revenue amounted to ISK 14.1 billion, down nearly 5%, mainly due to lower global oil prices compared to last year and a slight decline in sales to industries. The solid results at Olís can be attributed to ongoing operational improvements at service stations, and within other areas, reflected in lower operating costs and increased retail sales in fuel, general goods, quick-service restaurants, and new offerings such as car washes and parcel delivery. Summer traffic from both domestic and foreign travelers was also strong. Two new ÓB self-service fuel stations were opened during the quarter, one in Akureyri and another in Búðardalur, and new Glans car-wash facilities opened in Selfoss and Grafarvogur.

SMS in the Faroe Islands continues to experience strong growth, both in grocery retail and foodservice operations. Revenue reached ISK 4.0 billion, a substantial year-over-year increase, with profitability above management budget. The company continues to pursue growth opportunities, including the construction of a new 3,000 m² retail center in Runavík, which has progressed well during the summer months. The new center, which will host SMS-owned stores and restaurants along with third-party stores, is scheduled to open in mid-November.

Hagar’s IT infrastructure, internal processes, and digital capabilities have evolved substantially in recent years. This progress is reflected in the number of online stores and digital services now available to customers, including e-commerce platforms for consumers (toys, cosmetics, etc.), B2B customers (fresh produce, catering supplies for HoReCa, etc.), as well as scan-and-go systems, mobile apps, and more. Building on these foundations, Hagar will soon launch a new customer loyalty program designed to enhance convenience, service, and value for customers. Over time, this program will serve as a platform to deliver broader and improved customer services across Hagar’s operations and partner network.

As always, we continue to take a firm stance against inflating cost of supplies in the grocery sector, seeking the most efficient sourcing and other ways to offer customers the lowest possible prices. While we have achieved meaningful results, reflected among other things in price reductions across a large portion of the Bónus portfolio of products, food inflation remains too high. We trust that our suppliers will exercise restraint in pricing and hope that public authorities will continue to promote stability and ideally an environment for contracting food prices in Iceland.

Overall, we are pleased with Hagar’s progress. Over the past two years, our focus has been on operational efficiency and business development, i.e. new pillars and revenue streams, within our existing operations. The strong first half of the financial year shows that we are on track, performance exceeds expectations, and we see continued opportunities to strengthen our operations further. The primary strengths of Hagar lie in solid funding, strong operating units and outstanding employees who work every day to improve the quality of life for our many loyal customers. As a result, Hagar’s position is strong, and its outlook remains positive.

Presentation meeting on Friday, 17 October 2025

A presentation meeting for investors and market participants will be held at Nauthóll, Nauthólsvegur 106, Reykjavík, on Friday, 17 October 2025, at 8:30 a.m. At the meeting, Finnur Oddsson, CEO, and Guðrún Eva Gunnarsdóttir, CFO, will present the company’s operations and financial performance and answer questions.

The meeting will also be live-streamed, and registration for the stream is available at: https://www.hagar.is/skraning.

Presentation materials will be made available in Icelandic on Hagar’s website, www.hagar.is, at the start of the meeting. Presentation materials will be available in English no later than 20 October at https://www.hagar.is/en/.

This press release is translated from the Icelandic version which was published on October 16th, 2025. Should there be discrepancies between the two versions, the Icelandic version will take priority over the translated version.

For further information, please contact Finnur Oddsson, CEO (fo@hagar.is), and Guðrún Eva Gunnarsdóttir, CFO (geg@hagar.is), by telephone 530-5500 or email.

Attachments

• Hagar Financial Statements 31.08.2025
• Press release Hagar Q2 2025-26