Norway Royal Salmon (Buy, TP: NOK225.00) - Strong Q3, but soft 2022 volume guidance
Norway Royal Salmon reported operating EBIT of NOK89m, c29% above our expectation, but 6% below consensus. The culling of smolt from a supplier means the 2022 harvest guidance of 38.5kt was below our expectation of 44kt. We have increased our 2021e EPS by 4.9% due to a strong Q3, but reduced our 2022e EPS by 15.8% due to lower guided volumes. We reiterate our BUY and NOK225 target price.Norway Royal Salmon has developed from a sales and marketing company for farmed salmon into an integrated seafood company. Co. is a fish farming company with activities in two main segments: fish farming and sales. The fish farming business includes salmon farming and harvesting activities. The fish farming business is divided into two regions: Region North, which consists of the fish farming business in Senja and West Finnmark; and Region South, which consists of the fish farming business in the area around Haugesund. The sales segment includes the purchase and sale of salmon, as well as Co.'s chain management activities.
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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