SalMar (Buy, TP: NOK480.00) - Year-end stumble
Q4 operational EBIT of NOK658m was 26% below our estimate and 23% below consensus, mainly driven by lower realised prices due to harvest timing. Underlying operations, however, appear to be on track, and management remains upbeat about the cost reduction potential. The proposed 2019 DPS of NOK21 was in line with expectations. We have trimmed our EPS by 1.3% for 2020e and 0.5% for 2021e, but reiterate our BUY and NOK480 target price.SalMar is a producer of Atlantic salmon and is integrated from roe and smolt to products and sales. Co. has farming operations in Central and Northern Norway, as well as in Scotland. Co. has operating licences for marinephase fish farms and hatcheries in central Norway and Troms County. Co. has 66 licences for production of farmed Atlantic salmon in Norway: 53 in central Norway (More & Romsdal, South and North Trondelag) and 13 in northern Norway (Troms)
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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