Icelandic Salmon (Buy, TP: NOK170.00) - Low volume and high costs in Q2e
We expect Q2 operating EBIT of NOK-5m, NOK30m below consensus of NOK26m. Based on a 1.3kt harvest, the corresponding EBIT/kg margin is NOK-3.5, versus consensus of NOK18.9 (based on 1.4kt). The deviation reflects a lower realised price and higher costs, while harvest volumes are broadly in line. We reiterate our BUY and NOK170 target price, and believe the current share price offers an attractive entry point for investors with medium- and long-term time horizons.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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