SalMar (Buy, TP: NOK500.00) - Strong performance in Q1
Q1 operating EBIT was NOK1,884m, 7–12% above our forecast and consensus, driven by strong achieved prices in Central Norway, as cost/kg was in line, while lower losses in Sales and Processing mean the beat was lower quality. Region North performed below expectations, due to a lower realised price and higher costs (56% NRS volume) than expected. 63% of guided synergies were realised by end-Q1 versus 48% at end-Q4. The Q2 cost guidance was neutral versus consensus. The 2023 harvest guidance of 259kt was unchanged. We expect consensus 2023 EPS to come up 3–5% and a similar share price reaction today.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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