Atlantic Sapphire (Buy, TP: NOK180.00) - Upsizing phase 2
Atlantic Sapphire announced plans to upsize phase 2 of its US facility, leading to total combined output of 25kt HOG (~5kt above our estimate), which it believes will lower capex/kg and reduce construction risk. It has also increased its credit facility to USD200m and has received a ‘medium green’ rating from CICERO. The change to the ramp-up plan is a net positive in our view, but merging the two phases moves the strategy away from the original ‘copy and paste’ rollout model. We reiterate our BUY and NOK180 target price, and await further news on capex and costs for phase 2.Atlantic Sapphire AS. Atlantic Sapphire AS is a Norway-based company, which farms Atlantic salmon in land-based recirculating systems in Denmark and the United States. The Company uses the production technology Bluehouse, which comprises the entire production cycle - from an egg hatchery to harvested fish ready for truck pick-up. Also, the Bluehouse implies production free of antibiotics, hormones, pesticides, metals and synthetic pigment. The product portfolio includes whole fish, as well as a range of fillets and cuts. The customers comprise primarily restaurants and retail stores on the Unites States market. Also, the Company exports products to such markets as Canada, Chile and Europe.
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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