Norway Royal Salmon (Hold, TP: NOK190.00) - Another Q1 bites the dust
Norway Royal Salmon issued a profit warning on 24 April, stating it expected Q1 operating EBIT of NOK74m, ~50% below our forecast and consensus. As for several other seafood companies, realised prices have fallen due to a high share of downgraded fish and a poor harvest timing, while costs have increased due to ISA. We have lowered our 2020–2021e EPS by 26.1–4.7%, cut our target price to NOK190 (200), and downgraded to HOLD (BUY).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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