Grieg Seafood (Buy, TP: NOK145.00) - Poor start for ‘new’ Grieg Seafood
Q1 was set to mark the start of the ‘new’ Grieg Seafood, with all regions starting to enjoy solid operations. However, the Q1 trading update on 17 April revealed significant margin shortfalls versus our estimates for all regions, with a group EBIT/kg of NOK12.3 in a quarter with a near record-high salmon price. We have cut our 2020e EPS by 18.1% but made only minor revisions to 2021–2022e. We reiterate our BUY, but have trimmed our target price to NOK145 (150). The Q1 results are due at 06:00 CET on 7 May.Greig Seafood is a fish farming group, based in Norway, that specialized in salmon and trout. Co. is the parent company of the Greig Seafood Group. Co. is engaged in the production and sale of seafood, and naturally related activities to the sale of seafood. Co. is predominately engaged in the production of farmed salmon and trout, with a production capacity of around 95,00 tons gutted weight annually. Co. has 100 licences for salmon production and five licences for smolt production. Co. has operations in Finnmark and Rogaland in Norway, British Columbia in Canada, and Shetland (the U.K.).
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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