Festi profit falls as costs and fewer tourists weigh
Wednesday 28th October 2026 on 21:45 in
Iceland
Festi’s third-quarter profit fell 12.9% year on year to ISK 2.3 billion as higher commodity prices and fewer tourists weighed on its businesses, CEO Ásta S. Fjeldsted said, according to mbl.is. Results were below plan, although the outlook for the fourth quarter is good.
Fjeldsted said conflict in the Middle East had created significant uncertainty, pushing up commodity prices, including oil, and increasing volatility amid concerns about supply-chain disruptions. Fuel sales margins remained under pressure because the company could not fully pass higher costs on to customers.
Gross margin from fuel and electricity sales fell by ISK 622 million year on year. N1 sold 2.8% fewer litres of fuel, mainly because of lower sales to large users. By contrast, N1’s car services and energy divisions improved significantly, with EBITDA at both more than doubling year on year during the first nine months.
Fewer tourists also reduced sales across Festi’s business segments. Lower demand in the electronics market contributed to a 3.5% fall in gross margin from electronics sales.
Grocery retailer Krónan continued to gain ground: store transactions rose 4.4% year on year and the number of products sold increased 5.6%. Its EBITDA rose 15.1% to nearly ISK 2.1 billion. The company froze prices on 647 products from September 24 until at least the end of the year and is preparing to open its 27th store, in Höfn in Hornafjörður, later in the fourth quarter.
The electronics market contracted by 3% year on year, according to Meniga figures, while ELKO continued to increase its market share. ELKO’s online sales grew 15%, and its gross margin also increased. At pharmacy chain Lyfja, transactions rose 1.2%, products sold increased 2.3% and sales through digital channels grew 14%.
Fjeldsted said inflation of about 6% was affecting product prices and operating costs across the group, but that cost control had been effective. Wages and other operating expenses rose by 3.2% year on year. Festi expects all business segments except Lyfja to improve their results in the fourth quarter. Lyfja is facing higher costs while the government-set markup on medicines has been unchanged since October 1, 2023.
Festi’s full-year EBITDA forecast remains unchanged at ISK 16 billion to ISK 16.5 billion. The company will continue to focus on cost control while investing in infrastructure, technology development and new service solutions.