SalMar (Buy, TP: NOK520.00) - Showing the others how it’s done
Q2 operating EBIT of NOK882m beat our estimate by 33% and consensus by 12%. With costs at NOK34/kg in Norway in Q2 (on our estimates), SalMar confirmed its position as the cost leader, but also restored confidence in cost-cutting potential for peers. Following the solid Q2, the low cost guidance for Q3, and the acquisition of another 9% of MAB capacity, we have lifted our 2020–2022e EPS by 6.9–0.4%. We reiterate our BUY and have raised our target price to NOK520 (500).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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