SalMar (Buy, TP: NOK780.00) - Lower volumes in Q2
SalMar reported operating EBIT of NOK1,262m, 7% below our estimate and 6% below consensus, driven by larger than expected losses on contracts. Q2 guidance is for flat/slightly higher costs but harvest volumes to be back-end-loaded in 2022 with 60% contract coverage in Q2. We have cut our 2022 EPS estimate by 7.1% and made minor changes to 2023–2024. We have lowered our target price to 780 (800) but reiterate our BUY.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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