Mowi (Hold, TP: NOK180.00) - Much weaker than expected
Mowi’s Q1 trading update revealed operational EBIT of EUR107m, 39% below our expectation of EUR176m and 31% below consensus of EUR155m. The deviation reflects lower margins in Norway, the UK and Canada. Overall, the EBIT/kg margin dropped by EUR0.1 versus Q4, while the spot price was up by EUR1.15. We have cut our estimates materially for Q1, and have increased our costs for Q2–Q3e. In light of Covid-19, the Q1 dividend decision will be postponed until Q2. We have cut our 2020–2022e EPS by 16.8–0.2%, and have lowered our target price to NOK180 (200). We have downgraded to HOLD (BUY). The full Q1 results are due at 06:30 CET on 13 May.Marine Harvest is a seafood company engaged in the production of farmed salmon. Co. offers fresh and processed salmon and other processed seafood to customers in 70 countries worldwide. Co. focuses on three principal types of production activities: salmon feed production in Norway, fish farming and primary processing of fish in Norway, Scotland, Canada, Chile, Ireland, and the Faroe Islands, and secondary processing of seafood in Norway, Chile, Ireland, the United States, the United Kingdom, France, Belgium, the Netherlands, Poland, the Czech Republic, Japan, Vietnam, Taiwan, and South Korea.
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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