SalMar (Buy, TP: NOK780.00) - A margin for the record books
SalMar reported Q2 Farming EBIT/kg of NOK69.5/kg in the Northern region, which we believe is an industry record-high. However, the Central region reported a lower than expected realised price, and group operational EBIT was 9–7% below expectations. Full year harvest guidance was unchanged, while the Q3 cost guidance was for slightly higher cost, in line with expectations. We reiterate our BUY and NOK780 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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