SalMar (Buy, TP: NOK700.00) - Q2 below expectations
Q2 operating EBIT of NOK1,393m was 5% below our forecast and 8% below consensus, driven by higher losses in Icelandic Salmon and higher costs in SalMar Aker Ocean (SAO). Farming in region North was 5–8% below expectations and Central was 3% below, driven by a lower realised price. The 2024 harvest guidance was unchanged for Norway, SAO and the UK, but cut 2kt for Iceland. Q3 costs were guided flat QOQ for Central and higher for North. We expect consensus 2024e EPS down 4%, and the stock down 0–2% 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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