Grieg Seafood (Buy, TP: NOK90.00) - Soft report on most metrics
Grieg Seafood stumbled in Q4 with lower than expected harvest volumes (due to PD and pushing fish into 2018) and a lower EBIT/kg margin. The harvest volume was 18.7kt (15% lower than expected) and EBIT reported was NOK151m (c38% lower than expected). The EBIT/kg was NOK8.1 (28% below consensus of NOK11.3, 27% below our forecast of NOK11.1). Corporate costs were unusually high due to a failure to deliver ASC-certified fish according to a contract. We expect consensus EPS to come down c3–5% and the shares to be down by a similar amount.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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