Bakkafrost (Hold, TP: NOK410.00) - Q1 operational EBIT 10% shy of expectations due to higher farming costs.
The Q1 results were lower than we expected due higher costs in farming and larger losses in the VAP division. Reported EBIT adj. was DKK268m, 9% lower than consensus (Bloomberg) of DKK293m and 10% lower than our estimate of DKK297m. The reported EBIT/kg of DKK21.9 was 9% below consensus of DKK24 and 10% below our estimate of DKK24.3. The high costs in farming were driven by high volumes from the Western region, where margins were NOK11/kg lower than in the Northern region. As the volumes shift more towards the Northern region going forward, the costs should improve.
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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