Podravka H1 profit flat at €41.1mn as pharma offsets food squeeze
A sharp slowdown in earnings growth at Croatian group Podravka highlights the diverging fortunes of its booming pharmaceutical unit and a food business squeezed by weak consumer demand and falling commodity prices.
Podravka posted normalised net profit of €41.1mn for the first half of 2026, effectively flat compared to the same period a year earlier. The stagnation marks a dramatic deceleration for the Croatian group, which saw net profit surge more than 80% over the full year of 2025.
Operating revenue edged up €8.7mn to €520.7mn, while normalised EBITDA came in at €89.6mn. The underlying performance reveals a growing structural split within the company, as macroeconomic pressures weigh unevenly across its three divisions.
The core food business generated €298.9mn in sales, a modest 1.1% increase driven by own-brand development in Croatia and broader European markets. This marginal gain reflects the strain of weaker consumer purchasing power across the region, limiting the pricing power of a traditional consumer staples producer.
Agricultural unit Podravka Agri also felt the pressure, managing only a slight revenue increase to €131.8mn. Falling farmgate prices for pork and milk created significant headwinds, though the division offset these market pressures through efficiency improvements and operational adjustments.
The group's growth is now entirely dependent on its smallest division by revenue. Pharmaceutical unit Belupo posted a 7.1% jump in revenue to €94mn, an increase of €6.3mn, with growth recorded across all product categories.
For investors, this reliance on Belupo alters the risk profile of a stock historically viewed as a defensive food play. Shifting earnings drivers from food to pharmaceuticals exposes the company to entirely different regulatory and competitive market dynamics.
Management remains focused on long-term expansion despite rising energy costs and broader macroeconomic uncertainty. "Despite increased uncertainty in the environment and rising energy prices, we continue to grow revenue and invest in long-term competitiveness," said Martina Dalić, president of Podravka's management board.
The Koprivnica-based company is backing this stance with capital, targeting production modernisation and international expansion. Specific initiatives include pushing the Lino Lada spread brand into German retail chains and expanding its agricultural production capacity.
