SalMar (Buy, TP: NOK780.00) - Expecting record-high margins
We forecast Q2 operating EBIT of NOK1,148m, c10% above consensus. We expect a record-high Farming EBIT/kg margin in Norway of NOK66, but Sales and Processing to report a record loss of NOK829m as contracts fixed at prices below the latest spot are accounted for in this division. We have raised our 2022e EPS by 1.2% based on our expectations for a strong Q2. We reiterate our BUY and NOK780 target price. The Q2 report is due at 06:30 CET on 25 August.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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